Genomic Health Inc. shares rose Tuesday after a Piper Jaffray analyst upgraded the stock to "Outperform," saying the company is optimistic about its future drugs and its breast cancer test Oncotype Dx.
Analyst William Quirk raised his rating to "Outperform" from "Market Perform," and said the Redwood City, Calif.-based company expects to reach an agreement with the Food and Drug Administration about regulating Oncotype Dx. The test is a major source of revenue for the company, and sales of Oncotype doubled in 2006.
Quirk held his target price at $23 per share.
Genomics is developing colon cancer tests and a more detailed Oncotype product, Quirk said, and is working on tests with Sanofi-Aventis and ImClone Systems Inc. The tests will determine whether patients can benefit from Sanofi's Taxane and ImClone's Erbitux.
Genomics shares jumped 89 cents, or 5.3 percent, to $17.69 in afternoon trading on the Nasdaq Stock Market. The stock has ranged from $9.60 to $24.68 over the past year.