For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"The era of personalized medicine is arriving and Genomic Health (NASDAQ: GHDX) is one of the first companies to provide both a successful product and an investment opportunity," says Dave Dyer in his Dave Dyer's Newsletter, referring to his more speculative favorite for 2008.
"The company's genetic test provides a way to determine whether women with early stage breast cancer would benefit from chemotherapy. For 70% of people with early stage breast cancer, minimally invasive surgery and radiation is all that is needed.
"The other 30% have a more aggressive type of cancer and would benefit from also receiving chemotherapy. An objective, quantifiable test based on the genetic characteristics of a specific patient can determine with very high probability which group a patient belongs to.
"GHDX has the support of patients, insurance companies, and professional medical organizations who recommend standards of care. It is easy to see how the patients facing the tough choices about chemotherapy would want this test -- the side effects are unpleasant, but the side effects of not getting it when you need it are worse.
"Insurance providers, including Blue Cross and Medicare, are agreeing to pay for the test because it is in their financial interest to avoid unnecessary and expensive chemotherapy treatments.
"The American Society of Clinical Oncology, the world's leading professional organization representing physicians who treat people with cancer, has recently included the GHDX test in their published treatment guidelines. This means it will be difficult for physicians to not recommend this test in the appropriate circumstances.
"GHDX has not yet been profitable but revenue has been growing rapidly, up 123% in the most recent quarter. The stock has doubled since its IPO in September 2005, but there is a lot of room to grow as their test gains popularity, the company becomes profitable, and new tests for other types of cancer are developed using the same technology."
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