Dump it first thing at the open

When you look at a test like this, you need to calculate the number of dollars per women-year saved – how much do you need to spend to save one year of one person's life. In this case, the way the test would save a life-year would be to get a patient who has an ovarian cancer that otherwise would have been operated on by a generalist ob/gyn to be operated on by a gynecologic cancer physician, which would give her a slim survival advantage. The problem is that this is a very small thing. Its a slice of a slice of a slice of a slice, but to get this tiny slice-ito you need to pay for the whole pie. So ultimately you are paying a huge amount of money to identify one patient, and in that patient you are only going to make a subtle change in her management. Not clearly worth it, in my opinion.

Here's the deep low down thing – I doubt the company ever intended the test to be used this way.

That's right – I doubt this is what they ever wanted.

They were looking for a way to screen for ovarian cancer in a low risk population, which is an absolute holy grail. The problem is that they failed. And this is not surprising, as at present there has not been a single chemical test ever proven to identify _any type of cancer_ in low risk populations, except possibly the PSA test. Ovarian cancer is particularly difficult, because the hormones and markers it secretes are secreted in many non-malignant processes, which is why the CA-125 test cannot be used reliably to screen.

By working a bunch of numbers and testing in a very high risk population (women with pre-existing ovarian tumors), they found a some kind of statistical significance between their test result and a clinical outcome. But honestly the benefit of this test is so low, that it can't be what they were going for in the first place. The market just isn't big enough. They didn't hit what they were looking for, and now they are trying to salvage something from it. Note that on their website they list ovarian cancer screening (the holy grail) as a developing prospect, but not as the product they are selling.

Because this test is so new, and its benefit questionable at best, it will be considered experimental by insurers for many years, and perhaps forever. That means that insurers will not pay for the test. Patients can still have it done, but they will have to pay for it out of pocket, which will discourage use. Only after solid data is produced that the use of this test improves clinical outcomes will insurers pay for it on a widespread basis. That data does not exist now, and may never exist. FDA approval does not mean clinical and commercial success!

Another problem is that these things do not always continue to have positive data when they go to larger clinical trials. One proteonomic test that claimed to be successful at identifying ovarian cancer in a low risk population (OvaSure) got pulled from the market after launch by the FDA after further clinical data found their test to be near-worthless. Sequenom recently went from $4 to over $24 on data that showed a near perfect track record for their Down Syndrome screening test for pregnant women, only to crash when it turned out that the data was faulty, and likely fabricated by members of their research team.

So jump in and take some profit while there is some excitement, but I wouldn't plan on some huge long term success. I would not consider it “the next big medical stock yet.” Its still _highly_ speculative, and should be treated as such. There is tons of room for this thing to fail, and no strong evidence so far that they won't.

If you want the next big medical stock, think Intuitive Surgical. They have already gone big, but man I think they will go bigger. Their technology is totally game changing, and everybody wants to use it.