SECAUCUS, N.J. - A recent study suggests that circulating tumor DNA (ctDNA) testing for minimal residual disease (MRD) could lower health plan costs by up to 21% when used in treatment decisions for stage II colorectal cancer patients. This finding was published in the JAMA Health Forum and conducted by Haystack Oncology, a subsidiary of Quest Diagnostics (NYSE: NYSE:DGX), among other institutions.
The research indicates that ctDNA MRD tests, which are a form of liquid biopsy, can detect early signs of cancer recurrence or residual disease post-surgery. The study's senior author, Dr. Afsaneh Barzi, emphasized the potential for health plans to cover ctDNA MRD testing without impacting their budgets while providing valuable clinical insights.
The study builds on the DYNAMIC trial from June 2022, which showed that ctDNA MRD testing could reduce the use of adjuvant chemotherapy by nearly half without affecting recurrence-free survival. This could lead to a decrease in adverse events and related costs, which range from $44,022 to $65,792 per patient.
A hypothetical model was used to compare standard clinical evaluation with a scenario where 50% of eligible patients undergo ctDNA MRD testing. The analysis projected a 21% cost reduction for commercial plan populations and a 5% reduction for Medicare Advantage plan populations.
The authors of the study, including co-author Jeanne Tie, highlight the economic and clinical value of integrating ctDNA MRD testing into colorectal cancer care. However, they also acknowledge limitations such as not considering the costs of potential disease recurrence and mortality.
Quest Diagnostics, which acquired Haystack Oncology in June 2023, is offering the Haystack MRD test through an early experience program and plans a broader U.S. launch later this year. Colorectal cancer is one of the leading cancer diagnoses in the United States, with an estimated 106,970 new cases in 2023.
This analysis is based on a press release statement and provides a model for payers to estimate the potential budget impact of ctDNA MRD testing in their health plans.
InvestingPro Insights
As Quest Diagnostics (NYSE: DGX) continues to innovate in the field of oncology diagnostics, particularly with its circulating tumor DNA (ctDNA) testing for minimal residual disease (MRD), the financial health of the company remains a key consideration for investors.
Quest Diagnostics boasts a solid track record of financial stewardship, as evidenced by its aggressive share buyback strategy and impressive history of dividend growth, having raised its dividend for 12 consecutive years. This commitment to shareholder returns is a testament to the company's financial discipline and long-term growth strategy.
In terms of financial metrics, Quest Diagnostics holds a market capitalization of 15.77 billion USD, indicating its significant presence in the healthcare diagnostics market. The company's price-to-earnings (P/E) ratio, a measure of its current share price relative to its per-share earnings, stands at 18.61, with a slightly adjusted figure of 17.65 for the last twelve months as of Q1 2024.
This suggests that while the company is trading at a high P/E ratio relative to near-term earnings growth, investors are willing to pay a premium for Quest's earnings potential. Moreover, the dividend yield as of April 5, 2024, is 2.15%, which is attractive to income-seeking investors, especially when combined with the company's history of dividend growth.
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