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Recently, Genomic Health (GHDX - Analyst Report) announced the results of 2 studies, which were conducted to determine RNA-Sequencing and Mutation Identification, in the 14th Annual Advances in Genome Biology and Technology (AGBT) meeting in Florida.

According to the results, DNA strand-of-origin information can help refine the process of identification of prognostic biomarkers, while gene mutations related to tumors can be tested with archival fixed paraffin embedded tumor (FPET) tissue, thus allowing an advanced tumor analysis process.

The company strongly believes that these findings will further strengthen its advanced next generation sequencing (NGS) platform and accelerate the development of future tests that combines both whole transcriptome profiling and mutation analysis.

Genomic Health is a global cancer company with focus on advanced molecular diagnostics. The company is focused on the development and commercialization of genomic-based clinical tests for cancer diagnosis that enables physicians to make individualized treatment decisions.

The company's lead product, the Oncotype DX breast cancer test is used to predict the likelihood of cancer recurrence in ductal carcinoma in situ (DCIS), patient survival within 10 years of diagnosis and chemotherapy benefit for early stage breast cancer patients. In addition, the company provides Oncotype DX colon cancer test, the first multi-gene expression test for the assessment of risk of recurrence in patients with stage II and stage III disease. 

Although the Oncotype DX colon cancer test is yet to make any significant contribution to the top line, the company is optimistic about Oncotype growth. As per Dec 2012 data, 10,000 doctors across 65 countries ordered 335,000 Oncotype DX tests. 

The company has come a long way from being a one-product U.S.-focused company in 2007, when 24,450 tests were delivered (with 22% penetration), to the present when more than 66,000 Oncotype DX test results (with 16% growth) were delivered in 2011.

Genomic also diversified its offering with the launch of the Oncotype DX DCIS Score at the end of 2011. Banking on several strategies directed toward an increasing acceptance of the test, Genomic is well placed to capitalize on the huge market potential.

Although, lower-than-expected invasive breast cancer test volume in the domestic market, fewer patient visits as well as higher competition led Genomic to reduce its expectation to deliver tests, we are encouraged with the progress made by the company on the reimbursement front.

Last year, Genomic established additional reimbursements in Greece, France, Kuwait and Spain. This led to a sizeable increase in the number of lives covered for the Oncotype DX breast cancer test to more than 90 million worldwide. Going forward, we expect the growth trend to continue. 

The stock carries a Zacks Rank #3 (Hold). However, other stocks in the medical device sector, carrying a Zacks Rank #1 (Strong Buy), like Medical Action Industries Inc. , Given Imaging Ltd. and Cyberonics Inc. (CYBX - Analyst Report) appear impressive.

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