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Wall Street May Have 'Written Off' Genomic Health's Colon Cancer Dx, But Survey Shows Some Docs Haven't

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By Turna Ray

Investors have "written off" Genomic Health's Oncotype DX test for colorectal cancer recurrence after clinical trial results showed that the test was not predictive for chemotherapy benefit, according to analysis by Thomas Wiesel Partners.

In April, Genomic Health announced that the multi-gene expression platform it was testing in the QUASAR validation study met its primary endpoint in determining the likelihood of post-operative disease recurrence in patients with stage II colon cancer. However, the study did not meet its secondary endpoint when using the test to predict which patients are likely to benefit with post-operative 5-fluorouracil/leucovorin treatment [see PGx Reporter 04-15-2009].

These results "disappointed investors," according to Thomas Wiesel, and as a result, Genomic Health's stock declined 12 percent the day following the announcement.

Final results from the QUASAR trial are expected later this year or early next year.

Nevertheless, even if the test is not ultimately validated as a predictive test, Thomas Wiesel is optimistic that the strength of the Oncotype DX brand and the lack of diagnostic tests in the colorectal cancer setting will drive adoption from doctors.

In an effort to prove Wall Street's expectations wrong, Thomas Wiesel conducted a survey of oncologists and pathologists. Based on the survey results, the investment group believes "there is a disconnect between the Street's expectation of Genomic Health's test and the potential clinical acceptance of the test."

Thomas Weisel's survey polled 47 oncologists and pathologists that saw approximately 30 colorectal cancer patients per month, and "widely used or believed molecular tests should be widely adopted." The investment bank did not address whether this small group of physicians and researchers is representative of the awareness and intent among healthcare providers in the colorectal cancer setting nationally or internationally.

The poll revealed that while a majority of those surveyed perhaps would not require the colorectal cancer test to be predictive in order to use it in clinical practice, the chemotherapy benefit claim still ranks as an important characteristic driving adoption for the test.

In the survey, the top requirement for driving adoption was a positive prospective study (54 percent). Just over three-fourths of those surveyed cited the second-most important driver for the test to be the chemotherapy benefit claim. Other factors cited by respondents include conducting retrospective studies (15 percent), payor coverage (26 percent), and economic benefit analysis (33 percent).

Based on the number of patients the physicians treated, the survey indicates that without the chemotherapy benefit claim the penetration rate for Oncotype DX in the colorectal cancer population would be 21 percent. With the chemo benefit claim, the test could potentially penetrate as much as 47 percent of the colorectal cancer patient population.

“We were positively surprised by the implied penetration that the current test could reach, but we’re negatively surprised by the approximate 50 percent penetration rate for chemotherapy benefit,” Thomas Wiesel said.

More than 33 percent of respondents said they were impressed with the initial data from the QUASAR trial, and 15 percent expressed they were not impressed with the data. More than 30 percent had a "neutral" impression of the test from the study data, and more than 20 percent offered no opinion.

Approximately 28 percent of those polled expressed a desire to use the test when it came on the market, but 4 percent said they would not use the test. The response of remainder of respondents were not specified in the note.

"From the survey results, we are incrementally more positive on Genomic Health's OncoType test in the CRC setting, a test that the market appears to have written off," Thomas Wiesel said in a note to investors.

Since in the survey "only 34 percent" found it important that the test have a predictive claim, Thomas Wiesel has reason to believe that the healthcare community would accept and use the Oncotype DX in the colorectal cancer setting just as a recurrence test.

However, "the bear-case is that for clinical acceptance, Oncotype has to have both recurrence and chemotherapy claim — mirroring Oncotype DX in the breast cancer setting," Thomas Wiesel acknowledge in its note.

In the breast cancer setting, the fact that Genomic Health's Oncotype DX has been shown in multiple clinical trials to be both predictive for chemotherapy benefit and prognostic for breast cancer recurrence has certainly helped the company drive adoption among oncologists and garner widespread payor coverage.

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