The majority of oncologists still use flow cytometry/cytogenetics/immunohistochemistry to run a lab test. Molecular testing is something that is considered to be more advanced:
- looking at cancer cells on dna level to search for certain mutations on genes such as BRCA, KRAS, ALK... and each of gene has many mutations on that. MYGN is specialized in BRCA to find a variety of mutations.
- have you heard of 'personalized medicine', 'FDA accelerating drug approval on cancer drugs'? both issues are driven by molecular testing
- with molecular testings, oncologists know which drugs can effective
Wonder why LH, DGX, BRLI cutting 2014 forecasts? Oncologists are considering molecular testings on their patients which these companies do not have an expertise on. Eventually, LH or DGX will come out and start buying out MYGN, CGIX or any other molecular testing companies. Or drug companies like SNY, LLY will do so.
Think why Miraca bought out Caris at 3x revenue in 2011 at $725M, and Caris is not even the best molecular company.
"Since our last meeting, a large phase 3 trial of drisapersen, a drug with a similar mechanism of action, was reported to be negative, despite increased expression of dystrophin. The disconnect between increased expression of dystrophin and clinical efficacy for drisapersen, combined with previous negative reports for PTC124, another drug thought to act by increasing dystrophin, raises considerable doubt about the biomarker, and consequentially, its ability to reasonably likely predict clinical benefit.”
- Drisapersen is competitors' drug, NOT Sarepta's. FDA is concerned that eteplirsen 'might' have similar situation without backing information.
“Recent natural history data in DMD indicate that a baseline 6-Minute Walk Test (6MWT) ³ 350 meters predicts continued general stability for such patients, not the 75- to 83-meter yearly decline you suggest in the meeting package. Thus, considerable doubt is also cast on the efficacy support provided by your ongoing open-label study (4658-us-202, 96-week data submitted), in which baseline 6MWT was 350 m for all patients.”
- Basically, the company needs to have patients in clinical trial to stay longer to increase data pool.
The market over-reacted on FDA comments, but given the fact that 50% of market cap is in CASH at this point, the company is well situated with cash level throughout next couple years.
Also, Sarepta's approach in RNA may have a significant value as personalized medicine/next generation sequencing is getting a huge demand in medical industry. Now, the cancer drugs are researched based on molecular testing which provides treatment options. RNA sequencing can discover a drug to cancer stop reproducing itself. Look at ILMN for example.