Genomic Health To Offer Epic Science's AR-V7 Test, Shares Up

Genomic Health, Inc. (NASDAQ:GHDX) recently inked an exclusive deal with private diagnostic provider Epic Sciences to market and sell the latter’s liquid biopsy test – AR-V7. Notably, the test will be available in the U.S. starting early 2017.

AR-V7 is a brand new blood-based diagnostic assay that aids in making appropriate treatment decisions for patients suffering from metastatic castration-resistant prostate cancer (mCRPC).

Shares of Genomic Health rose 4.9% following the release of this news to reach $28.12 on Friday indicating investors’ optimism revolving around the abovementioned deal.

Details of the Deal

The agreement will offer Genomic Health exclusive distribution rights to provide AR-V7 across the U.S. markets using its widespread commercial channel. Once the deal is completed, physicians will be allowed to order the test and view the results through the current physician portal.

Under the terms of the agreement, Genomic Health will also make an equity investment in Epic Sciences. However, the financial terms of the additional investment and the deal itself has been kept under wraps.

About AR-V7 and its Benefits

Epic Science’s AR-V7 is a laboratory-developed test that can identify the presence of the V7 variant of the androgen receptor protein (AR-V7) in the nucleus of circulating tumor cells (CTC) of mCRPC patients. Notably, almost all men suffering from metastatic prostate cancer are at high risk of developing mCRPC; an advanced stage of the disease.

The standard treatment for these patients has been to administer hormone therapy drugs called androgen receptor signaling (ARS) inhibitors. However, developing a resistance to such drugs is a common phenomenon and by the time patients resort to an alternative therapy, like chemotherapy, it is often too late.

The advantage of AR-V7 test is that it can effectively identify mCRPC patients with AR-V7 positive CTCs who can benefit from chemotherapy, instead of undergoing the more expensive and potentially less effective ARS drug treatment. Interestingly, a study recently published in the JAMA Oncology outlined and validated this property of AR-V7. Moreover results from this study demonstrated that patients with AR-V7 positive CTCs to have had longer survival rates on taxane chemotherapy compared to those on ARS inhibitors.

Our Take

We expect the aforementioned developments to support the use of AR-V7 as a treatment-specific biomarker to guide treatment selection for patients with advanced prostate cancer, in clinical practice. Naturally owning the exclusive distribution rights for an assay with such immense potential in the molecular diagnostics industry will surely boost Genomic Health’s business.

Moreover, it is estimated that each year, about 50,000 mCRPC patients could benefit from knowing their AR-V7 status prior to selecting their advanced treatment. Therefore, on its commercialization, this new test will not only save the patients from undergoing unnecessary, expensive drug treatments; but it will also be cost-effective for the healthcare industry.

Interestingly, the availability of the AR-V7 serves as a further development to Genomic Health’s recently launched – Oncotype SEQ Liquid Select, a next-generation, liquid biopsy test. This in turn will expand the company’s Oncotype IQ Genomic Intelligence Platform that collectively assesses DNA, RNA, and protein using PCR, NGS, or image-based analysis.

With liquid biopsy becoming the “Holy Grail” of cancer treatment now-a-days, Genomic Health currently leads in the molecular diagnostics industry by transforming cancer outcomes for more than 600,000 patients. However, with other leading diagnostic providers competing to bring their own liquid biopsy tests in the market, Genomic Health may face some challenges in maintaining its dominance in this multi-billion dollar industry going forward.

Zacks Rank

Genomic Health currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical sector are GW Pharmaceuticals plc (NASDAQ:GWPH) , NuVasive, Inc. (NASDAQ:NUVA) and ICU Medical, Inc. (NASDAQ:ICUI) . While GW Pharmaceuticals and NuVasive sport a Zacks Rank #1 (Strong Buy), ICU Medical holds a Zacks Rank #2 (Buy).