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Thermo Fisher Scientific Inc. TMO , a leading scientific instrument maker, recently received premarket approval (PMA) from the U.S. FDA for its Oncomine Dx Target Test. It is said to be the first next-generation sequencing (NGS)-based test that concurrently screens tumor samples for biomarkers related with three FDA-approved therapies for non-small cell lung cancer (NSCLC).

Thermo Fisher developed the Oncomine Dx Target Test in partnership with Novartis and Pfizer. It is based on Thermo Fisher's Ion AmpliSeq technology, which allows screening of tumor samples for multiple genetic markers. The test can simultaneously evaluate 23 genes clinically associated with NSCLC.

As per the press release, lung cancer is the primary cause of cancer-related deaths in the U.S., with NSCLC accounting for 85% of all lung cancers. With the pre-market FDA approval, Oncomine Dx Target Test enables clinicians to choose right therapies for patients in days instead of weeks and helps in reducing treatment costs.

Management has claimed that the Oncomine Dx Target Test may be further developed and expanded. Thermo Fisher has therefore entered into discussions with several pharmaceutical companies looking to use the test for FDA-approved targeted therapy applications beyond lung cancer.

Notably, LabCorp, NeoGenomics Laboratories and Cancer Genetics are among the first laboratories to offer the Oncomine Dx Target Test as a service to oncologists. The test will run on Thermo Fisher's Ion PGM Dx System, which got FDA 510(k) clearance for use on formalin-fixed, paraffin-embedded (FFPE) tissue samples. These laboratories will offer these tests starting Jul 2017 in the U.S. The company will also make these tests available in other countries.

According to a Transparency Market Research report, the global NSCLC market is estimated to be worth $15.1 billion in 2023, at a CAGR of 12.1%. This enables Thermo Fisher to cash in on opportunities in this potential market.

Over the past three months, Thermo Fisher has successfully traded above the Zacks categorized Medical - Instruments industry. Per the latest trading price, the stock has gained 12.0% over the same period, ahead of the industry's gain of 10.2%. We expect the FDA approval of its NGS test to boost the company's clinical next-generation sequencing and oncology business.

Zacks Rank & Key Picks

Thermo Fisher currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are Align Technology, Inc. ALGN , Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX . Notably, Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see  the complete list of today's Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock added roughly 33.1% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock added approximately 24% over the last three months.

Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock added around 21% over the last three months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc.

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