Genomic Health files for $75 million IPO

By Ted A. Knutson

Washington, July 15 - Genomic Health, Inc. filed for a $75 million initial public offering of common stock in an S-1 registration statement with the Securities and Exchange Commission

JPMorgan and Lehman Brothers are the joint bookrunning managers for the sale. The other underwriters are Piper Jaffray, Thomas Weisel Partners and JMP Securities.

The Redwood City, Calif.-based company is developing genomic-based clinical diagnostic tests for cancer.

In January 2004, Genomic introduced its first product, Oncotype DX, for early stage breast cancer patients.

The company claims Oncotype is the first genomic test that has clinical evidence supporting its ability to predict the likelihood of cancer recurrence, the likelihood of patient survival within 10 years of diagnosis and the likelihood of chemotherapy benefit.

The high cost - Oncotype has a list price of $3,460 - means that physicians and patients may decide not to use the product unless a third party such as an insurance company, Medicare and Medicaid pay a substantial portion of the price. However only a "limited number" of third parties have so far approved Oncotype, none of them Medicaid or state Medicare programs.

However, in early 2005, the Medical Advisory Panel of the Blue Cross and Blue Shield Association's Technology Evaluation Center said Oncotype did not meet its criteria for clinical effectiveness and appropriateness.

And in December, Medicare turned down Genomic Health's request to cover the test.

Genomic had a net loss in 2004 of $25.0 million on product and contract revenue of $327,000.

As of March 31, the company had $32.53 million in cash and cash equivalents.

The company hopes to be listed on the Nasdaq under the ticker symbol "GHDX."

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