Actually for GHDX, it is really bad. They could be forced to stop selling in this country for 1-2 years- which means that only foreign revenues would count. I have no doubt that they will get it approved eventually, but the slowdown will let other , better tests (for instance, Prediction Sciences' IHC-based test; see Clinical Cancer Research Feb 15 issue) get the marketing momentum behind them to overtake this test. Also throws a wrench into the pipeline, delaying further growth; all energies at the company will be on getting the OncoDx approved.
JPM is out saying that any weekness is a buying opportunity:
JMP notes that yesterday the FDA posted draft regulatory guidelines for public comment regarding genetic tests being currently marketed and in development by industry and clinical laboratories. While they had expected the FDA to increase its role in the regulation of the growing number of IVDMIAs, firm reits their belief that GHDX's Oncotype DX represents the standard bearer of genetic assays. Although firm expects the definitive guidance by the FDA could take 6-9 months to be finalized, they would view any weakness in GHDX as a result of uncertainty as a buying opportunity for risk-tolerant investors, as they believe that increased FDA scrutiny will not negatively impact physician or third-party payor adoption.
The FDA places all medical devices into one of three classes. The class dictates the degree of regulatory control needed to assure safety and effectiveness of the device. The three classes are addressed below: 1. Class I - Devices for which the general controls of the Food, Drug, and Cosmetic Act, such as adherence to good manufacturing practice regulations, are sufficient to provide a reasonable assurance of safety and effectiveness. Examples of Class I devices are enema kits, elastic bandages, and pipetting. 2. Class II - Devices that, in addition to general controls, require special controls, such as performance standards or postmarket surveillance, to provide a reasonable assurance of safety and effectiveness. Examples of Class II devices include power wheelchairs and pregnancy test kits. 3. Class III - Devices that cannot be classified into Class I or Class II because insufficient information exists to determine that either special or general controls would provide reasonable assurance of safety and effectiveness. Class III devices require premarket approval. Examples of Class III devices include implantable pacemaker pulse generators, automated heparin analysers, and infant radiant warmers. D. The following are the two main routes to the market for a new device. If the manufacturer can establish substantial equivalence, premarketing notification (510(k)) approval is all that is required. Otherwise, full premarketing testing and approval are required. The premarketing approval process is lengthy since it requires review and analysis of all completed studies, trials and literature: 1. Premarket notification is also known as a "510(k) submission," since the basic requirement for it is in Section 510(k) of the Federal Food, Drug, and Cosmetic Act. Premarket notification must be submitted at least 90 days before the manufacturer anticipates marketing the device. The reason for notifying FDA that a device is about to be marketed is to let FDA determine whether or not the device is substantially equivalent to one already in commercial distribution. If the FDA determines that the device is substantially equivalent, the manufacture is free to market it. 2. According to the FDA, the term "substantially equivalent" is not intended to be so narrow as to refer to devices, which are identical to marketed devices nor so broad as to refer to devices that are intended to be used for the same purposes as marketed products. The term is to be constructed narrowly where necessary to assure 2-17.8-2 the safety and effectiveness of a device but not so narrowly where differences between a new device and a marketed device do not relate to the safety and effectiveness.