Genomic Health Inc. priced its initial public offering at $12 per share, raising $60.2 million to fund commercialization and further research and development of its Onco type DX diagnostic cancer tests.

The Redwood City, Calif.-based company is selling about 5 million shares of its common stock, and also granted underwriters an option to purchase an additional 752,508 million shares. If the overallotment option is exercised in full, the company expects to receive total net proceeds of $62.3 million. In addition, Genomic Health expects to receive $5 million from a private stock sale to Palo Alto, Calif.-based Incyte Genomics Inc.

On its first day of trading Thursday, the company's stock (NASDAQ:GHDX) lost 25 cents, to close at $11.75.

The amount raised fell below the $75 million the company anticipated when it filed its registration statement in July. However, the share price managed to stay within the $12 to $14 range set earlier this month, which puts Genomics Health in a better position than most companies this year.

Genomic Health remained in a quiet period and was unable to comment, but the company said in its prospectus that about $25 million from the offering will be used to cover costs related to the marketing of its Onco type DX, a genomics-based test launched in January 2004 for early stage breast cancer patients. The test is designed to predict the likelihood of cancer recurrence, as well as the likelihood of patient survival within the 10 years of diagnosis and the chances that a patient will benefit from chemotherapy.

The company's initial test was aimed at patients in the early stage of the disease with node negative, estrogen receptor positive breast cancer who face treatment with the hormonal therapy tamoxifen. About half of the estimated 230,000 patients to be diagnosed with breast cancer in 2005 are projected to fit into that group.

Hoping to expand the applications of Onco type DX, Genomic Health also expects to spend about $20 million on its ongoing research and development programs in several different cancers, including colon, prostate, renal cell, non-small-cell lung cancer and melanoma. Funds from the offering also will go toward expanding facilities and laboratory operations and for general corporate purposes.

The company reported a net loss of $15.7 million for the first six months of 2005. While it spent about $4.6 million on research and development activities, the largest portion of expenditures, about $7.4 million, went to fund its selling and marketing efforts. As of June 30, the company had cash and cash equivalents totaling $25.2 million.

J.P. Morgan Securities Inc. and Lehman Brothers Inc. are acting as joint book-running mangers for the offering, while Piper Jaffray & Co., Thomas Weisel Partners LLC and JMP Securities are serving as co-managers. All are based in New York.

Following the offering, the company will have about 24.4 million shares outstanding.