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Genomic Health Publishes Second Study on Prostate Test, Expects Medicare Reimbursement by Q4

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This story has been updated to correct the name of Myriad Genetics' prostate cancer test, Prolaris.

NEW YORK (GenomeWeb) – Genomic Health expects Medicare to begin reimbursing for its Oncotype DX prostate cancer test before the end of this year on the heels of a positive local draft coverage determination from Medicare Administrative Contractor Palmetto GBA earlier this year.

After posting flat Q2 revenues earlier this week, company officials reiterated that this milestone would be a critical step, essential to Genomic Health's goal of delivering a profit in the fourth quarter of 2015.

During a call discussing the firm's Q2 earnings, Brad Cole, the company's COO and CFO, said that Genomic Health expects Medicare "reimbursement will turn quickly into revenue."

Medicare-covered patients represent 50 percent of the overall population eligible for Genomic Health's prostate test, and according to Cole, the prostate market opportunity in the US is greater than the invasive breast cancer market, in which Genomic Health has built a "profitable and market-leading franchise." 

"We have a long history with Medicare, and we’ve turned node-negative, node-positive, colon, and DCIS [testing] into revenue within weeks. So, following the final determination, we expect a significant piece of our total volume to turn into revenue. It represents a multi-million dollar impact in the fourth quarter if it can happen early," he explained.

Cole said that the company is "pleased with the progress we are making," toward reimbursement, namely the favorable draft local coverage determination by Palmetto this May recommending coverage of Oncotype DX prostate for qualified Medicare patients throughout the US.

"Importantly, the public comment period for Medicare’s review process has been completed and we anticipate a final reimbursement determination by the fourth quarter," Cole said during the call. "Additionally, we continue to have ongoing coverage discussions with leading private payors."

As it anticipates finalization of the Palmetto draft LCD, Genomic Health has also continued to build published evidence for the utility of its test.

Speaking during the earnings call, Genomic Health CSO Steve Shak highlighted a study published last month in the journal Urology Practice, the second by the company demonstrating the impact of its test on physician decision-making.

According to Shak, the study results demonstrate that the addition of Oncotype DX testing resulted in more physicians recommending or accepting active surveillance as the initial management of choice for their low and low-intermediate risk prostate cancer patients.

The study, a retrospective review of 211 patient charts from 10 sites across the US, showed a relative increase of 56 percent in the use of active surveillance for patients who received the Oncotype DX prostate tests compared to those who did not.

"For clinicians as well as payors, these results add important perspective on the impact and value of our test and reinforce findings from the first prospective decision impact study published earlier this year. Together, the two published studies demonstrate that the use of Oncotype DX changes both treatment recommendations and the actual treatment received, resulting in greater adoption of active surveillance for the right patients," Shak said.

In addition to this published study, Genomic Health researchers also shared data at ASCO earlier this year from a study of 3,500 prostate cancer patient tumor samples analyzed in Genomic Health’s commercial laboratory, highlighting the value of the prostate test in referencing multiple biologic pathways to predict risk, Shak said.

In this study, each of the four gene groups incorporated in the Oncotype DX GPS showed large variations and expression and meaningfully affected the test results, he explained.

Genomic Health officials said this week that about 2,000 physicians have ordered the prostate test to date and more than 60 percent of those have been repeat orders. Prostate testing now represents about 10 percent of the company's overall test volume.

"Though it’s early days in [terms of] market penetration, and though we have one competitor who doesn’t talk in the same granularity we do, we believe our market share is at least equal to theirs. So we are feeling really good about the uptake and the progress we are making," Cole said. He did not specify which competitor he was referring to, but Oncotype DX is joined in the prostate cancer risk testing market by Myriad Genetics' Prolaris.

Other tests

Beyond prostate reimbursement and the impact the company expects it will have on its stated goal of delivering a profit by the end of the year, there was also news this week on several of its more-established tests.

The company maintained momentum in its growth in the DCIS breast cancer market with 80 percent year-over-year growth and 12 percent more testing in Q2 compared to Q1.

"We believe we are well positioned to expand reimbursement beyond Medicare and the limited coverage by private payors with the recent publications of our second clinical validation study and our first decision impact study," Cole said during the call. Genomic Health's penetration of the DCIS market is currently less than 10 percent, he estimated.

Shak also highlighted a decision impact study published in the Journal of Surgical Oncology in June. This prospective study showed that Oncotype DX results reduced the number of patients receiving a radiotherapy recommendation by approximately one-third.

"Importantly, of the patients initially recommended not to receive radiotherapy, 32 percent were identified as having a high risk of recurrence and recommended to have radiotherapy," Shak said.

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