Many men in the U.S. hear the words “prostate cancer” and freak out. They want to fight. But a lot of times, the aggressive treatments they demand are unnecessary, expensive, and cause all kinds of unhappy side effects like incontinence and impotence. Sometimes the tumors are destined to grow so slowly that these men will live long enough with prostate cancer to end up dying of something else.
Now Redwood City, CA-based Genomic Health (NASDAQ: GHDX) is betting that it has found a way to cut down on unnecessary treatment. It’s the latest commercial genetic test, along with a new one from Salt Lake City, UT-based Myriad Genetics (NASDAQ: MYGN), which seeks to provide more diagnostic clarity for doctors and patients trying to figure out what to do about prostate cancer.
Genomic Health, which generated $235 million in revenue from its Oncotype Dx tests last year, is announcing today that it is preparing to sell a new variation of its bread-and-butter diagnostic product for men with prostate cancer. The company already markets the test to predict the likelihood of recurrence among patients with breast cancer and colorectal cancer, so this is the third major iteration for the company. While breast cancer is the most common solid tumor diagnosed every year in women in the U.S., prostate cancer is the most common malignancy affecting men—about 240,000 a year, according to the American Cancer Society.
About half of the men diagnosed each year are classified as having “low-risk” disease based on standard PSA blood tests and prostate biopsies analyzed by pathologists, who assign what’s known as a “Gleason” score on a scale of 1 to 10. But there’s a degree of uncertainty, and subjective judgment calls, around those measurements.
So Genomic Health’s innovation was to look deeper into each patient’s genetics, developing a 17-gene panel that can predict whether a patient truly has a “low-risk” form of disease. If the test confirms that a patient is low-risk, then doctors and patients should be able to feel more confident in sticking with “active surveillance” of the disease, without going to the trouble and risk of getting their whole prostate gland surgically removed—what’s known as a radical prostatectomy. Active surveillance calls for getting regular checkups and monitoring PSA scores, while leaving the prostate intact. When doctors perform radical prostatectomy, that’s when patients often end up with side effects like incontinence or impotence.
“A lot of people have written about this issue of overdiagnosis. It’s not just one of the biggest problems in oncology, but also in all of men’s health,” says Steve Shak, the chief medical officer of Genomic Health. If things go according to plan, Genomic Health will be able to tell doctors when they can provide “active surveillance for the right patients, and immediate intervention for the right patients,” Shak says.
Genomic Health’s commercial hopes are hinging on data being presented this week at the American Urological Association’s annual meeting in San Diego. Peter Carroll, a researcher at UC San Francisco, is presenting results from a 395-patient validation study that took tiny prostate samples from a fine-needle biopsy, and ran them through Genomic Health’s 17-gene panel, which looks at four distinct biological pathways associated with aggressive disease. Researchers found that more than one-third of patients who were originally classified as “low-risk” by traditional PSA and biopsy tests were actually “very low risk” when their tissues were analyzed by Genomic Health. That means those patients could more confidently opt to skip radical prostatectomy.
On the flip side, the Genomic Health test also identified a small group of patients who were classified as “low risk” by traditional methods, but actually had more severe malignancies.
“With these new study results, I believe we may be able to significantly increase the use of active surveillance, which has been limited to some extent by the absence of a validated genomic tool to more accurately distinguish low and high risk disease at the time of biopsy,” said UCSF’s Carroll, in a Genomic Health statement.
The new prostate cancer test has been priced at $3,820, according to Emily Faucette, a Genomic Health spokeswoman. “Given that surgery and radiation treatments for prostate cancer generally cost in the tens of thousands of dollars for the treatment procedures alone, we believe our test will have the potential to save costs to the healthcare system,” Faucette said in an emailed statement.
Like with breast cancer, the company will need to show its clinical data to insurance companies to convince them the prostate test is worth the money. And there’s another potential barrier to adoption. A year ago, the U.S. Preventive Services Task Force released new guidelines to physicians which urged doctors to stop doing routine PSA tests to screen for prostate cancer, noting that it often leads to “false positive” tests that lead to overtreatment. So if fewer men get PSA screening tests, fewer men will likely be diagnosed with prostate cancer, and fewer men will have a reason to get a biopsy they can send off for sophisticated analysis by Genomic Health.
David Miller, the president of Biotech Stock Research in Seattle, said he sees a number of reasons why Genomic Health could be in for an uphill battle with its new test. Miller covers several prostate cancer drugmakers, and attended the American Urological Association’s meeting.
“I think this sort of test is critical to urology, but expense is a barrier,” Miller says. “The new PSA guidelines, IF they are actually followed, will make this test less useful since more men will present with advanced disease unsuitable for active surveillance.
Given the AUA’s new guidance, the business case for this test depends largely depends on how many urologists and primary care physicians choose to ignore the AUA’s guidance.
My guess is most urologists and a minority of primary care physicians will ignore the guidance. The test’s success revolves around whether payors — especially those connected with ACOs — will reimburse and/or incorporate it into reimbursement decisions.”
Tycho Peterson, an analyst with JP Morgan who covers Genomic Health and rates it “neutral,” said he’s not expecting big things right away from the new prostate test. “While we remain intrigued at the long-term possibility of a prostate assay, we believe that the test will take longer to contribute to Genomic Health profit than is generally believed,” Peterson wrote in a note to clients on May 2.
Genomic Health also will have to deal with competitive pressure. The Myriad Genetics test, called Prolaris, is based on a 46-gene signature, which it says has been tested in 3,000 patients and is “the only commercial product that predicts prostate cancer death.”
Shak notes that the Genomic Health test is different than Myriad’s in a couple key technical respects. One is that Genomic Health performed its tests in patients who are still early in the diagnostic journey, because they haven’t yet had a radical prostatectomy. The Genomic Health test also looks at a different set of genes from four distinct biological pathways, not one, like Myriad’s. Genomic Health’s internal R&D found that its test was more predictive when it focused on four pathways, Shak says.
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