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Cytyc and Digene Strike a Deal

Both Cytyc and Digene have hurdles to overcome. Skeptics fear that Cytyc, which has FDA approval for its monolayer sampling technology for cervical cancer screening, may never be more than a one-product company. And Digene, lacking sufficient sales and marketing presence in clinicians' offices, is progressing slower than many had hoped it would; it still has to clearly define the role of HPV (human papilloma virus) in cervical cancer detection and its utility as a broad screen versus what experts call "a triage tool." By entering into an exclusive agreement, the companies hope to address these issues.

Things couldn't be rosier for Cytyc Corp. Nearly five years after receiving FDA approval of its ThinPrepmonolayer sampling technology, the company is well on its way to becoming the standard of care in cervical cancer screening as an alternative to the conventional Pap smear. It has limited competition, increasingly satisfactory reimbursement, and solid profits. Its FDA-approved indication that ThinPrep is better than the conventional Pap smear at detecting cervical cancer is supported by accumulating scientific data. Wall Street, after hemming and hawing a bit over Cytyc's huge SG&A expenses, loves the story [A#1998800093.

Things are going well, albeit on a smaller scale, for Digene Corp. , also a successful diagnostic start-up, with...

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