This article has been updated to clarify that Genomic Health has submitted research data on Oncotype DX testing in the DCIS population to the San Antonio Breast Cancer Symposium. The abstract has not yet been accepted for presentation. Originally published Aug. 5.
By Turna Ray
During the second quarter of 2011, a period in which Genomic Health's revenues grew 17 percent over the previous year, the company netted several milestones that may help bolster sales of the company's Oncotype DX colon cancer test and facilitate the launch of a new ductal carcinoma in situ test.
According to company officials, the Journal of Clinical Oncology has accepted for publication the QUASAR (Quick and Simple and Reliable) study, the main clinical validation trial for Genomic Health's colon cancer recurrence test, which it launched commercially in early 2010.
Additionally, the company announced positive preliminary results from a large, prospective, multi-institutional Eastern Cooperative Oncology Group validation study involving the Oncotype DX test in patients with DCIS. This study met its primary endpoint by showing that a pre-specified Oncotype DX DCIS score can predict whether a patient will develop new invasive breast cancer or their DCIS will return in the same breast.
According to Brad Cole, Genomic Health's chief operating officer, the colorectal cancer and DCIS Oncotype DX tests, as well as an uptick in international reimbursement, stand to be the company's main growth drivers in the coming years. "Looking forward, we expect the QUASAR publication acceptance, planned DCIS launch, and continued success with international reimbursement to be key factors in driving revenue growth in 2012 and beyond," Cole said during a call to discuss Genomic Health's financial results for the three months ended June 30.
Genomic Health's colon cancer test gauges the risk of disease recurrence in stage II patients. Although it has been on the market for a year and a half, the fact that the QUASAR trial had not yet been published has hampered uptake of the test. Officials couldn't provide the exact publication date for the QUASAR study, but said that once the data are in print, the company should be able to improve reimbursement for the colon cancer test.
Additionally, at the American Society of Clinical Oncology's annual meeting in June, a study led by Alan Venook of the University of California, San Francisco, reported results from CALGB 9581, a study that used the RT-PCR-based test to study tumor samples from 690 patients with low-risk stage II colon cancer. In a pre-specified multivariate analysis considering patients' mismatch repair status, T-stage, nodes examined, grade, and lymphovascular invasion, the Oncotype DX colon cancer recurrence score "was the only significant predictor of recurrence," Venook et al. reported in the abstract.
"Recurrence risk at five years increased as the recurrence score increased and among subgroups defined by T-stage and MMR," according to the abstract. Several researchers involved with the CALGB 9581 study are Genomic Health employees.
Genomic Health officials said with QUASAR and CALGB 9581, the company now has two studies it can use to bolster the test's reimbursement position.
With the Oncotype DX DCIS test, meantime, Genomic Health is hoping to further penetrate the breast cancer market. Given that around 45,000 women in the US and 1.15 million worldwide are diagnosed with DCIS annually, this test stands to grow Genomic Health's breast cancer franchise substantially.
"Local recurrence of DCIS or a new invasive breast cancer occur in between 20 percent to 25 percent of patients at 10 years on average with surgery alone," Genomic Health CEO Kim Popovits said during the earnings call. Although clinical trials have suggested that treating patients with radiation therapy reduces local recurrence risk, there are no studies proving that radiation treatment will improve survival, she noted.
However, a preliminary analysis from the ECOG study shows "for the first time that a multi-gene assay can identify lower-risk DCIS, which may be treated with surgery alone, and higher-risk DCIS for which radiation therapy should be considered in addition to surgery," Popovits said.
Genomic Health has submitted results from this trial to the San Antonio Breast Cancer Symposium for possible presentation in December.
"Genomic Health was encouraged by breast cancer advocates and physicians to study DCIS," Popovits said. "We plan to make the Oncotype DCIS score available to patients and physicians worldwide by year end."
Reimbursement
The cost effectiveness of Genomic Health's Oncotype DX breast cancer recurrence test was reported in multiple studies during the second quarter.
At the ASCO annual meeting, Sonia Hassan and Nicole Mittman from the Hope Research Center in Toronto looked at the savings the Ontario healthcare system incurred with the incorporation of Oncotype DX in the management of breast cancer patients. The study concluded that the incorporation of the breast cancer recurrence test resulted in more than C$11 million ($11.2 million) per year in savings. Furthermore, they noted that the savings would likely have been greater if they had considered the adverse reactions that were avoided in forgoing chemotherapy.
The cost of adding Oncotype DX testing to the provincial healthcare system in the first year was C$15.8 million, which was projected to increase to C$16.5 million annually after three years of test adoption. Savings from unnecessary chemotherapy treatments, however, were C$27 million, which was projected to increase to C$28.2 million annually by the third year.
"Total system savings would represent [C]$34.5 million over three years," the researchers reported, noting that the three-year cost savings to the system ranged from $15 million for low-risk patients to $100 million from reductions in granulocyte-colony stimulating factor use.
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Separately, researchers from insurer Humana analyzed 952 women with early-stage breast cancer who were tested with Oncotype DX between June 2006 and June 2010. Of the 255 patients who received adjuvant chemotherapy, 10 percent were defined as having a low risk of recurrence by the test, 36 percent were found to be at intermediate risk, and 72 percent were deemed to be at high risk of recurrence. "On the basis of a meta-analysis in the reduction of chemotherapy after [incorporation of the recurrence score], the model estimated an average test savings of $1,160 per patient," reported researchers led by Humana's John Hornberger in the July issue of the Journal of Oncology Practice.
Humana also incurred savings by avoiding unnecessary chemotherapy drugs, supportive care, and management of adverse events in the order of $1,885, $2,578, and $472 per patient, respectively. Furthermore, by preventing recurrence by giving high-risk patients the right treatment, Humana saved $199 per patient.
Cost-effectiveness studies like these are positive for Genomic Health, since they provide insurers the evidence to continue reimbursing for the Oncotype DX recurrence test. Although Oncotype DX is covered by the majority of insurers in the US, impending changes to the system of codes that diagnostic providers use to bill for payors for tests could impact reimbursement levels across the industry.
Since launching the breast cancer recurrence test in 2004, Genomic Health has been successful at garnering reimbursement for the diagnostic with a miscellaneous current procedural terminology, or CPT, code. However, the American Medical Association is currently in the process of figuring out how multi-analyte, algorithm based tests, such as Oncotype DX, should be coded under the new coding system it is developing for molecular diagnostic tests.
Although the AMA has proposed a two-tier coding system for single analyte tests, no code structure has yet been established for so-called in vitro diagnostic multivariate index assays. "What we already do as a practice is actually where the AMA and the payors are trying to move the industry" by advancing the use of "unique codes for assays as opposed to a somewhat imprecise use of code stacking and payment," Kathy Hibbs, Genomic Health's senior VP and general counsel, said during the earnings call.
At a meeting to discuss coding for IVDMIAs last month, stakeholders discussed a proposal to develop Category IV codes that sponsors would use for IVDMIAs instead of Category I unlisted codes (PGx Reporter 07/13/2011).
Financial Results
Genomic Health's second-quarter revenues climbed 17 percent to $50.8 million from $43.4 million in the year-ago period. Product revenues increased 19 percent, to $50.5 million from $42.5 million, although contract revenues saw a downturn to $353,000 from $925,000. Genomic Health delivered 16,390 Oncotype Dx test results during the quarter, which represents a 17 percent year over year increase.
Additionally, the company continued to expand reimbursement coverage for Oncotype DX in the US. For example, Medicare contractor Palmetto GBA said that as of July 15, it would provide coverage for the Oncotype DX breast cancer recurrence test when a woman's lymph node status is unknown due to a prior surgical procedure, as well as to guide a neoadjuvant treatment decision.
Approximately 10 percent of the revenues in the second quarter came from international markets. In an effort to grow its international business, Genomic Health has been "overinvesting" in markets outside the US, Cole said. Currently, the company has offices in Switzerland and Germany, but is selling its tests in more than 30 countries.
During the second quarter, Genomic Health signed a contract for payment with a UK hospital; enrolled patients in studies that will help with payment decisions in the UK and Germany and initiated a study in Mexico; and launched a patient education website on Oncotype DX in Germany.
Genomic Health's R&D costs increased 24 percent to $9.9 million from $8 million in the previous year, while its SG&A expenses rose 16 percent year over year to $30.4 million from $26.3 million.
Genomic Health finished the second quarter with $61 million in cash, cash equivalents, and short-term investments.
For the full year, Genomic Health said it is on track to meet its total revenue guidance of between $200 million and $210 million, and expects to deliver between 63,000 and 66,000 Oncotype DX results.
By comparison, the company delivered 57,270 Oncotype DX test results in 2010 and posted revenues of $178.1 million.
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