The draft LCD recommends coverage and reimbursement of the Oncotype DX prostate cancer test for applicable Medicare patients across the U.S. This should encourage the identification of those patients with early-stage, needle biopsy proven prostate cancer, who can be managed conservatively rather than being treated with definitive surgery or radiation therapy.
As one of the leading molecular diagnostic providers with special focus on cancer treatment, this news marks a crucial step toward strengthening Genomic’s presence in the multi-billion dollar global oncology market.
Palmetto has already posted the draft LCD on the Medicare Coverage Database of the Centers for Medicare and Medicaid Services (CMS) website. The draft will hereafter be reviewed by Medicare. Processes include a public comment period, finalization and notification.
Genomic’s Oncotype DX prostate cancer test is a validated biopsy-based genomic assay that effectively predicts disease aggressiveness and allows doctors to customize the course of treatment for their patients as per individual requirement. This, in turn, helps avoid invasive and costly medical treatment options.
Management at Genomic is enthusiastic about the release of this news. Per management, this news assures that all Medicare prostate cancer patients – which represent 50% of the total prostate cancer patient population – will soon have access to this test. This will ensure disease-stage evaluation and the appropriate treatment.
Notably, Palmetto’s recommendation in favor of the Oncotype DX prostate cancer test comes close on the heels of Genomic presenting multiple data underscoring the clinical and cost-effectiveness of this assay at the American Urological Association Annual Meeting of 2015.
In the presentation, data from 3 separate studies validated the real-world positive impact of the Oncotype DX Genomic Prostate Score (GPS) and the test’s value in managing healthcare costs associated with treatment decisions in low-risk patients. More specifically, a cost reduction of $2000 per patient was observed in the first 3 years of diagnosis, when GPS was incorporated into the prostate cancer treatment procedure.
To date, 1800 physicians have resorted to this test to treat their patients. Following this news, we expect the numbers to escalate further in the days ahead.
As per Ace Business & Market Research Group, the global oncology market will grow at a substantial CAGR of 7% to $109 billion by 2020. Given the recent advancements observed in Genomic’s prostate cancer test, we believe the company is well positioned to capture a larger share of this market, going forward.
Currently, Genomic holds a Zacks Rank #3 (Hold). Some better-ranked med-biomed/generic stocks are Actelion Ltd. (ALIOF – Snapshot Report), Gilead Sciences Inc. (GILD – Analyst Report) and Illumina Inc. (ILMN – Analyst Report). All the three stocks carry a Zacks Rank #1 (Strong Buy).