What happened

Shares of Exact Sciences (NASDAQ:EXAS) jumped over 14% last month, according to data from S&P Global Market Intelligence. The cancer screening and diagnostic test leader announced new long-term data from two large population studies of Oncotype DX Breast Recurrence Score, suggesting the diagnostic can be used to inform treatment options for low-risk individuals successfully treated for breast cancer. 

The updated data set reinforces the value proposition behind the merger between Exact Sciences and Genomic Health. In addition, last month's trek higher helped the pharma stock to end the year on a high note following a tumble that began in September. Shares posted a 46% gain in 2019.

A model of DNA in the foreground and a scientist in the background.

Image source: Getty Images.

So what

Oncotype DX is a genetic test that was developed by Genomic Health to screen individuals with specific cancers for genes that can influence risk of invasive tumors, the likelihood of recurrence, and other factors affecting treatment. The latest large population studies support the product's value to breast cancer survivors.

An analysis from the National Cancer Institute found that Recurrence Score results from Oncotype DX matched real-world outcomes. Women younger than 50 with node-positive breast cancer and low Recurrence Score results had a five-year breast cancer-specific mortality of less than 2%. The results suggest that additional chemotherapy might be unnecessary for this patient population, which means doctors could use the genetic screen to inform treatment decisions and reduce waste in the healthcare system.

Similarly, the first 10-year outcomes results demonstrate that women with low Recurrence Score results and who never received chemotherapy had a low risk of recurrence and mortality. There were no statistical differences in outcomes in women who received chemotherapy and those who received hormonal therapy alone, again suggesting that chemotherapy might be wasteful for this patient population.  

Now what

The market for genetic testing has grown so rapidly that the U.S. Food and Drug Administration has had trouble regulating it. In fact, the FDA has recently brought down the hammer on companies making claims that aren't supported by studies. That makes the solid, long-term results for Oncotype DX in breast cancer all the more refreshing and comforting for patients, doctors, and investors. The results should also calm investors who were nervous over the merger between Genomic Health and Exact Sciences.