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Genomic Health Inc. Message Board

  • guacamolio guacamolio Apr 13, 2006 11:16 AM Flag

    Issues and Uncertainty?

    It seems as if the major hurdles for this stock are: i) its tests are not currently recognized as being useful by the vast majority of doctors; ii) the form of regulation that will be applied by the FDA is uncertain; and iii) the level of insurance coverage remains unsettled. It seems to me that these issues could all be resolved in a favorable fashion; however, it will take quite a while. In the meantime, the slide could continue to the 8's.

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    • Your points are very valid. Here's my take:

      1. Dr's - Oncologists are increasing their use of GHDX' test and see an increase across their profession. At some point, expect it to become standard of care.

      2. Insurance - as insurance realizes the benefits to them of this test, they will increase coverage. Insurance will always take the less costly approach - and play the percentages. As a result, insurance coverage will increase over time as well.

      These two considerations are already in the share price up to the 17's.

      3. FDA - this one is the wild card in my mind and difficult to anticipate the results. My understanding is that GHDX has a wealth of data to support their positon - however, FDA still may consider it insufficient and require additional, lengthy studies.

      I suspect the 9's are the bottom but willing to let it slide to the 7.50 area to add more shares for the long term - if that were to happen.

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