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Genomic Health (GHDX - Analyst Report) declared that the Journal of Clinical Oncology (JCO) has published positive results for a study of the company’s Oncotype DX colon cancer test. The study was conducted on patients from the National Surgical Adjuvant Breast and Bowel Project (NSABP) C-07 clinical trial.

The study also holds that recurrence risk can be determined through Oncotype DX Recurrence Score (RS) results. RS can also provide information apart from conventional risk factors, helping better discrimination of absolute benefit of chemotherapy as a function of risk.

As per this large, independent validation study, patients with a high RS result should derive larger absolute chemotherapy treatment benefit than patients with a low RS one, in both stage II and stage III colon cancer. Besides determining risk of recurrence, the RS results provide disease-free survival and overall survival in stage II and stage III colon cancer patients receiving adjuvant chemotherapy (all p<0.001).

This study marks the third successful prospectively designed study of the Oncotype DX colon cancer test in patients with stage II disease and the first validation study in patients with stage III disease.

The Oncotype DX colon cancer test is yet to make any significant contribution to the top line (less than 5% of total test volume). The path to manage reimbursement for the test has, to date, been a little difficult.

Yet, we are encouraged by Medicare’s decision in the sequentially last quarter to cover stage II colon cancer patients with a new policy. Moreover, market opportunity continues to grow, with colon cancer being the fifth-most common cancer and the third-most common cause of cancer mortality in the world.

In the coming months, Genomic Health plans to conduct a colon oxaliplatin treatment validation study for prediction and will begin a large clinical study using next-generation sequencing and fixed paraffin-embedded tissue.

The stock presently carries a Zacks Rank #3 (Hold). On the other hand, medical sector stocks that warrant a look are Align Technologies Inc., (ALGN - Analyst Report), Cardinal Health, Inc. (CAH - Analyst Report) and Mindray Medical International Limited (MR - Analyst Report). All these stocks carry a Zacks Rank #1 (Strong Buy).         

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