Genomic Health is planning to launch its Oncotype DX test for ductal carcinoma in situ in December, following the San Antonio Breast Cancer Symposium, where it will present the results of its validation study for the test, company officials said this week.
The company also plans to launch before the end of the year an immunohistochemistry test for mismatch repair protein status that will complement its Oncotype DX colon cancer test.
Genomic Health officials discussed the upcoming products this week during a call to discuss financial results for the third quarter, in which the company saw revenues increase 12 percent to $52.1 million from $46.3 million in the comparable period of 2010.
The company also said that it has secured a reimbursement contract with the Irish HSE National Cancer Control Programme, the country's public insurer, for the Oncotype DX test for lymph-node-negative, estrogen receptor-positive breast cancer patients.
The contract makes Ireland the first European country to provide full public reimbursement for Oncotype DX, the company said.
"Establishing reimbursement outside the United States continues to be an important driver for international growth for our business," said chief operating officer Brad Cole during the call. "During the third quarter we secured multiple breast cancer test reimbursement decisions that bring the number of covered lives outside the United States to more than 43 million, led by Canada, the UK, Israel, Greece, and Ireland," he said.
The new agreement also follows Medicare contractor Palmetto GBA's decision earlier this fall to cover the company's Oncotype DX colon cancer test in the US (PGx Reporter 10/5/2011).
Cole said that Medicare-covered colon cancer tests only represented about 1 percent of the company's total test volume during the quarter, but the company expects that approximately one-third of its US Oncotype DX colon cancer tests will be delivered to Medicare patients going forward.
He added that the Palmetto decision enables the company to retroactively collect payment for colon cancer tests delivered to Medicare patients over the last 18 months, but declined to discuss how much revenue that might generate for the company in future quarters.
Medicare is reimbursing the test at $3,000 — a "small discount" from the list price.
CEO Kim Popovits said that the company expects the Medicare nod will "help us in discussions with other payors going forward," though she noted that the final publication of the QUASAR (Quick and Simple and Reliable) validation study for the test, which has been accepted in the Journal of Clinical Oncology, is another key factor in securing additional reimbursement for the colon cancer test.
Genomic Health said it delivered more than 16,890 Oncotype DX test results during the quarter, a 15 percent increase over 14,730 test results delivered in the same period of 2010. Corresponding product revenue rose 13 percent to $51.7 million from $45.8 million in the third quarter of 2010.
DCIS and MMR
Popovits said during the call that the firm will give an oral presentation of the results of its validation study for the DCIS test at the San Antonio Breast Cancer Symposium in December.
The company announced preliminary results from the study, which it is conducting with the Eastern Cooperative Oncology Group, earlier this year (PGx Reporter 8/10/2011). This study met its primary endpoint and showed that a pre-specified Oncotype DX DCIS score can predict whether a patient will develop new invasive breast cancer or whether DCIS will return in the same breast.
Popovits said in this week's call that DCIS is "being diagnosed at an increasing rate" with an incidence of more than 45,000 patients per year in the US. Lumpectomy is the most common surgical procedure for the disease, and while the addition of radiation reduces local recurrence risk, it has "not been shown to prolong survival for DCIS patients, resulting in aggressive and costly treatment for a small overall clinical benefit," she said.
The DCIS validation study "showed that the multi-gene assay can identify lower-risk DCIS, which may be treated with surgery alone, and higher-risk DCIS, for which radiation should be considered in addition to surgery," Popovits said.
Based on these results, the company has decided to make the Oncotype DX DCIS score available before the end of the year.
Popvits added that the company is already in discussions with payors regarding reimbursement for the DCIS test. In response to an analyst question she said it's likely that many payors who already cover the Oncotype DX breast cancer recurrence test would consider DCIS coverage as an extension of their existing policies, but she stressed that those discussions are still underway.
As for adoption of the DCIS test, she said that it will "follow reimbursement," but noted that the company might expect a relatively "smooth transition" given that many physicians would already be familiar with the Oncotype DX breast cancer recurrence test.
Another upcoming launch is an IHC test to measure the status of the mismatch repair, or MMR, protein in stage II colon cancer patients. Popovits said that results of the QUASAR study and CALGB 9581, another study looking at the RT-PCR-based gene signature test, "support our plans to expand our service to colon cancer patients beyond the recurrence score to include immunohistochemistry testing for MMR status by the end of this year."
Popovits noted that around 15 percent of patients with stage II colon cancer have tumors that are MMR deficient. The QUASAR and CALGB studies "indicated that patients with MMR-deficient tumors had low recurrence risk, suggesting that these patients may be appropriately considered for observation following surgery," she said.
"Similar to ER, PR, and HER2 testing in breast cancer, we believe that every stage II colon cancer patient should have access to MMR testing for recurrence risk," Popovits said. "We believe that this will generate not only standalone MMR testing, but also increase patient access to Oncotype DX colon cancer recurrence score testing."
The company plans to offer the test to all colon cancer patients, not just those who qualify for Oncotype DX recurrence score testing. Cole said that the test will run in the neighborhood of $300 and will be "additive" to Oncotype DX.
He added that the company plans to increase its sales force in 2012 to accommodate its growing product portfolio, but did not elaborate.
Popovits said that the company has completed the laboratory analysis for a gene-identification study to predict the benefit of oxaliplatin chemotherapy in stage II and III colon cancer patients.
The aim of the study was to identify additional genes that could predict which patients would benefit from the chemotherapy. Earlier this year, the company said it was targeting 2013 for this test.
Popvits said this week that Genomic Health has completed its analysis using samples from the National Surgical Adjuvant Breast and Bowel Project's C-07 study. The company plans to report the results of the study next year.
The company is also on track toward conducting a clinical validation study for its prostate cancer test and has so far secured samples with the aim of conducting the study next year and launching a test in 2013.
Genomic Health will also present data at the San Antonio Breast Cancer Symposium from a clinical biomarker discovery study using next-generation sequencing, "which we believe to be the first clinical outcomes study using fixed paraffin-embedded tissue with this new technology," Popovits said.
She said that the company has so far completed two "early clinical research studies" using paraffin-embedded tissue in more than 200 patients. "We've developed the capability to do both mutation analysis and whole-transcriptome profiling, and we're now applying these capabilities in full clinical development," she said, though she did not disclose further details about the studies.
"We believe that in the future, physicians and patients will require a comprehensive genomic analysis — including specific mutations as well as gene expression — to better inform treatment decisions," she said, adding that Genomic Health aims "to be the first company to provide a platform that combines whole-transcriptome profiling and mutation analysis for large clinical studies using fixed paraffin-embedded tissue to translate genomic data into actionable clinical tests."
The company plans to provide further detail on these activities "early in 2012," she said.
Genomic Health's third quarter revenues of $52.1 million were in line with the analyst consensus estimate of $52.3 million.
R&D expenses increased 17 percent to $9.6 million from $8.9 million in the year-ago period; selling and marketing expenses rose 16 percent to $20.2 million from $17.3 million; and general and administrative costs increased 13 percent to $9.7 million from $8.6 million.
Net income decreased 16 percent to $3.2 million, or $.10 per share, from $3.7 million, or $.12 per share, in the third quarter of 2010.
The company raised its full-year net income guidance to $8 million from a previous range of $3 million to $5 million.
A key factor in the improved guidance is an "amendment" to the company's PCR licensing agreement with Roche that will reduce its net license fee by approximately 2 percent. CFO Dean Schorno said during the call that the amended agreement should reduce the company's net license fee by about $2 million in the fourth quarter.
The company maintained its previous full-year revenue guidance of between $200 million and $210 million.
As of Sept. 30, Genomic Health held cash and cash equivalents of $38.3 million. Cash, cash equivalents, and investments in marketable securities totaled $87.4 million.
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