By Ryan Flinn - 2012-06-25T14:30:00Z

A gene test made by closely held Veracyte Inc. may determine whether cancer exists in thyroid tumor samples that were inconclusive after biopsies, a study found, potentially ending thousands of unnecessary surgeries.

From 15 percent to 30 percent of thyroid nodules evaluated by fine-needle biopsies cant clearly be defined as malignant or benign, leading most doctors to recommend removing part or all of the gland as a precaution, said Erik Alexander, the lead study author and a doctor with the Dana-Farber Cancer Institute and Brigham and Womans Hospital in Boston.

Nobody wants surgery if they dont need it, Alexander said in a telephone interview. This test, when it returns with a benign result, implies there is a very small risk of any cancer.

The test from South San Francisco, California-based Veracyte screens for genes expressed by thyroid tumors. Researchers used the test on 265 indeterminate nodules, finding it correctly identified 78 out of 85 of malignant samples, and predicted benign results accurately in 95 percent of samples that were atypical of an undetermined significance and 94 percent with follicular neoplasm, according to the study funded by the company and published today by the New England Journal of Medicine.

About 56,500 new cases of thyroid cancer will be diagnosed in the U.S. this year and about 1,780 patients will die of the disease, according to the National Cancer Institute.

Widespread use of the gene test may eliminate one-third of the 75,000 surgeries performed in the U.S. on indeterminate thyroid nodules, J. Larry Jameson, professor at the University of Pennsylvanias Perelman School of Medicine, wrote in an editorial accompanying the study.

Veracytes test, which costs about $3,500, is covered by Medicare and is being promoted globally by Paris-based Sanofi (SAN)s Genzyme unit.

This is a key step forward for us, Bonnie Anderson, Veracytes co-founder and chief executive officer, said in an interview. The strength of this study underscores the real value of the test.

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

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Veracyte Gene Test May Limit Thyroid Cancer Surgeries