Here’s Why Genomic Health Rocketed Higher Today

What happened

Shares of Genomic Health (NASDAQ: GHDX) are up 18.6% at 1:23 p.m. EDT after data from the Trial Assigning Individualized Options for Treatment (TAILORx) trial was presented at the American Society of Clinical Oncology meeting and published in The New England Journal of Medicine.

So what

TAILORx followed more than 10,000 women with breast cancer scored using Genomic Health’s Oncotype DX Breast Recurrence Score test. About two-thirds of those had an intermediate score of 11 to 25; they were then treated with either hormone therapy alone, or hormone therapy plus chemotherapy.

The results showed that women over 50 with the intermediate score can skip chemotherapy, as it didn’t offer any additional benefit to the average patient; so can women younger than 50 with a score lower than 15. Patients with a score of 10 or lower, regardless of age, are already advised to skip chemotherapy as it doesn’t appear to offer any benefit.

Just as important, the results showed that women younger than 50 and a score of 16 to 25 benefited from adding chemotherapy; those with higher scores in that range derived more benefit.

Image source: Getty Images.

Now what

For the last couple of quarters, Genomic Health’s management has been highlighting results from TAILORx as a potential growth driver for its breast cancer test in the second half of 2018 and beyond.

Doctors want to avoid using toxic chemotherapy if it isn’t going to help their patients, and the results support using Genomic Health’s Oncotype DX Breast Recurrence Score test to easily help them make that decision.

And with the trial showing a majority of patients can skip chemotherapy, insurers should be happy to pay for the test: It costs substantially less than the cost of chemotherapy, especially when you add in the ancillary costs associated with treating chemotherapy side effects.

With four out of 10 breast cancer patients still not tested for recurrence risk, there’s an ample opportunity for Genomic Health to expand sales of its breast cancer test now that it’s armed with this new data.

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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Genomic Health. The Motley Fool has a disclosure policy.

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