Originally Published IVD Technology April 2002
PMA approval for Digene's HPV test sweetens deal for Cytyc
In a March ruling, FDA approved a premarket approval (PMA) supplement submitted by Digene Corp. (Gaithersburg, MD) for use of the company's DNA Pap test in screening applications. The approval came three weeks after Cytyc Corp. (Boxborough, MA) agreed to acquire Digene for $557.3 million. The transaction consideration includes 23 million shares of Cytyc stock plus $76.9 million in cash in exchange for all of the common stock and equity equivalents of Digene.
The companies have been discussing a business combination for some time. In January 2001 they formed a comarketing agreement to distribute Digene's Hybrid Capture System2 for human papillomavirus (HPV) with Cytyc's ThinPrep Pap test.
The FDA ruling allowing Digene's HPV test to be used as a primary screening test for cervical cancer for women over age 30, in conjunction with a Pap test, could substantially increase the market for the HPV test. The test is currently used as a follow-up to Pap tests with abnormal results, but with the primary screening indication, the HPV test could be used with all Pap tests. However, the companies do not expect to see the use of the DNA Pap as a primary screening test until 2003.
Cytyc's ThinPrep Pap test accounts for 57% of all Pap tests performed each year in the United States, and Digene's HPV test is the only FDA-approved test for human papillomavirus. The merger of the two companies "is just a natural progression," says Charles Fleischmann, CEO of Digene. "Our technologies are so compatible with one another."
Daniel Levangie, president and CEO of Cytyc, says the companies have an extensive history together. "Our relationship goes back to 1996 when we collaborated on a clinical trial to support submission of a successful FDA PMA supplement to test for HPV directly from the ThinPrep Pap test vial using Digene's Hybrid Capture System," he says.
"We believe there are several short- and long-term benefits," says Levangie. "This acquisition provides Cytyc with R&D capabilities in molecular diagnostics that solidify our platform for leveraging additional tests from the ThinPrep Pap test specimen vial."
The addition of HPV capability provides Cytyc with additional opportunities that are much more attractive than just the ThinPrep Pap test alone. "Digene presents an obvious synergistic fit with our core business that will allow us to significantly expand our revenue potential," says Levangie.
Copyright ©2002 IVD Technology
