Cholestech's Consumer Play

Executive Summary

Cholestech Inc. a maker of point-of-care diagnostic tests for cholesterol levels, is revamping its strategy to focus more on the consumer. It is buying Health Net, a small operator of alternative site testing services, such as those offered in corporations, shopping malls and at special events, to help augment relationships with pharmaceutical companies and to expand its Internet presence. Calling its new services WellCheck, it aims to attract pharmaceutical companies to sponsor consumer testing programs. Health Net has about $3 million in revenues, much of it coming from Warner-Lambert's Parke Davis subsidiary and Pfizer Inc., which have a co-marketing agreement to sell Lipitor, the best-selling cholesterol-lowering drug. The drug companies are supporting Health Net's testing efforts in the hopes of increasing awareness of their drug and perhaps more importantly improving compliance. Cholestech is also setting up its own Internet portal via WellCheck. Inc., which will be sponsored by pharmaceutical companies and which will allow consumers to maintain their health records on line.