|
|
 | | | |
- close
- close
- close
- close
Suggest other news sources for this topic
WIKI ANALYSIS
Gen-Probe (NASDAQ: GPRO) makes genetic tests for screening blood and diagnosing infectious diseases. The company's products include tests for sexually transmitted diseases (STDs), tuberculosis, strep throat, pneumonia and fungal infections in patients and in donated blood. Gen-Probe's collaborates with Novartis to make PROCLEIX, a genetic test for screening blood, and together the two companies represent around 90% of sales in this market. Gen-Probe also makes tests for infectious diseases.[1] The company earned $498 million in revenue and $92 in net income in 2009.[2]
Gen-Probe's product pipeline consists of screening tests for HPV and prostate cancer that are currently undergoing clinical studies to prepare for FDA marketing approval in the United States. In addition, Gen-Probe is involved in collaborations with General Electric Company (GE) and Millipore (MIL) to develop molecular tests for detection of bacteria contamination in water and biological processing batches, respectively.
While Gen-Probe was an original entrant in the nucleic acid testing markets, it now competes with much larger corporations that have since entered into these markets. Gen-Probes competitors include Roche Pharmaceuticals (RHHBY), Abbott Laboratories (ABT), Becton, Dickinson and Company (BDX), Siemens AG (SI), JOHNSON & JOHNSON (JNJ) and BIOMERIEUX (BIM-FR).
Company Overview
History[3]
Gen-Probe was founded in 1983 as a partnership between Dr. David E. Kohne, Dr. Thomas H. Adams, and Howard C. Birndorf. In 1985, they received the first ever FDA clearance for a diagnostic test using a nucleic acid, DNA, as a probe. The company went public in 1987, but lost its independence in 1989, when it was purchased by Japanese giant Chugai Pharmaceuticals for $110 million. In the 90's, Gen-Probe further developed its nucleic acid probes, and worked with Chiron Corporation (now owned by Novartis) to develop screening tests infectious diseases such as tuberculosis, AIDS, hepatitis, and chlamydia.
In 2001, after a merger of Chugai with Roche Pharmaceuticals (RHHBY), Gen-Probe was spun-off and, in September of 2002, began trading in the public market[4]. Following its re-emergence as an individual company, Gen-Probe released a screening test for the West Nile Virus and, in 2005, received the National Medal of Technology in recognition of its screening tests for West Nile Virus, HIV, and Hepatitis C. Since 2005, Gen-Probe has been working on expanding its infectious disease screening capabilities as well as developing screening tests in other maladies such as prostate cancer.
Major Product Segments
Gen-Probe's two major product segments are clinical diagnostics and screening tests for donated blood. Gen-Probe's major system, the TIGRIS, is a workstation that automates all phases from diagnostics and blood screening from the preparation of the sample to the reporting of results. The TIGRIS can be used with any of Gen-Probe's tests within the clinical diagnostics or blood screening segments.
Clinical Diagnostics
Gen-Probe offers diagnostic systems for STDs, virals, bacterial infections, strep, and other bacterial and fungal pathogens.
- The APTIMA system is Gen-Probe's core nucleic acid testing system used for detection of STDs in blood samples. The APTIMA HIV-1 and HCV systems detect HIV-1 and HCV in human plasma, while the APITIMA COMBO is a 2nd generation nucleic acid amplification system that detects RNA from chlamydia and gonorrhea simultaneously in blood samples.
- The Amplified MTD Test directly tests tuberculosis RNA in blood samples.
- The GASDirect system detects RNA from Group A Streptococcus (GAS), the most common cause of strep throat.
- AccuProbe is used for the identification of mycobacterial, fungal and bacterial pathogens. The entire range of AccuProbe assays follow a standard format and use common reagents, and allow for the detection of target organisms from cell culture samples.
Blood Screening Tests
Gen-Probe has collaborated with Chiron, a subsidiary of Novartis AG (NVS), to offer the PROCLEIX assays for screening donated blood to be used for transfusions. In the United States, blood bank customers use PROCLEIX products to safeguard more than 80% of the blood units donated annually. When combined with the TIGRIS system, these assays can process 1,000 blood samples in about 14 hours.[5]
- The PROCLEIX ULTRIO assay simultaneously detects HIV-1, HCV, and Hepatitis B in donated blood.
- The PROCLEIX WNV assay detects West Nile Virus in donated blood.
Pipeline
Gen-Probe is currently developing new nucleic acid tests to expand their diagnostics segment to prostate cancer, human papillomavirus (HPV). In addition, Gen-Probe is developing its next generation automation system, the Panther, and is working with General Electric Company (GE) and Millipore (MIL) to develop quality control systems.[6]
Business Growth
FY 2009 (ended December 31, 2009)[2]
- Net revenue increased 5.4% to $483 million. A 13% increase in product sales was offset by a 61% and 71% decline in research and license revenue respectively.
- Net income fell 14% to $92 million.
Trends and Forces
The Success of Gen-Probe's HPV Test Entering into the Market
Gen-Probe is currently developing a nucleic acid-based test to detect high risk strains of HPV that cause cervical cancer. The test is based on the same APTIMA technology as it current nucleic aid diagnostic tests, and should serve a large market, given that the Center for Disease Control estimates that around 50% of sexually active males and females have the virus. This test is currently in a very large clinical study of 7,000 women designed to evaluate its effectiveness in detecting HPV compared with a traditional Pap smear test.[7]
While Gen-Probe has historically been very successful with its APTIMA-based tests, obtaining marketing approval from the FDA is a very long and complex process that will take years to complete. The progress and interim results of this study is likely to impact Gen-Probe's valuation. In addition, if Gen-Probe's HPV test is approved for marketing, it will need to compete with the Pap smear test, which is firmly established as the standard of care in clinics.[8] The results of this clinical study will need to be strong enough to convince clinicians to use Gen-Probe's test in addition to, or in lieu of, traditional Pap smears.
The Success of Gen-Probe's Prostate Cancer Test Entering into the Market
Gen-Probe has developed a screening test based on the PCA3 gene, which is shown to be correlated with prostate cancer when overexpressed in urine. Gen-Probe has obtained European marketing approval for this test, but has yet to receive approval in the United States. As stated in the trend section for Gen-Probe's HPV test, obtaining FDA approval can be a very long process with no certainties of ultimate approval.
The Success of Gen-Probe's Collaborations with GE and Millipore
Gen-Probe is working with Millipore for bio-pharma manufacturing quality control testing and GE for various water-testing applications
Gen-Probe's relationship with Millipore centers around the development of MilliPROBE, which is designed to test for bacterial contamination within hours, drastically cutting down on the time to perform such quality control in typical bacterial culture testing. Gen-Probe does not believe that this product will generate substantial revenues, but rather will act as a "proof of concept" of the ability to use such molecular technologies to detect bacterial contamination in bio-pharma production processes. Whether this initial product performs well will affect Gen-Probe's future prospects in this market as well as their valuation.
Gen-Probe's relationship with GE centers around developing assays for detecting bacteria in industrial water applications such as the cooling towers that are used to heat and cool buildings and factories. This collaboration is similarly at the "proof of concept" stage, and its success will serve as a proxy for Gen-Probe's future involvement in this market.
While these collaborations are both positive developments for Gen-Probe, it is important to keep into perspective that these collaborators are relatively large in scale compared to the projects that Gen-Probe is working with them on. Therefore, the projects are higher priorities for Gen-Probe than they are for GE or Millipore.
Gen-Probe Competes in a Market Filled with Larger Players
While Gen-Probe is a leader in nucleic acid testing, its major competitors are mostly larger corporations with substantially greater revenues than Gen-Probe. While this allows Gen-Probe a focus in these markets that its competitors lack, it puts them at a disadvantage in competing for acquisitions or investing heavily in new opportunities.
Competition
Clinical Diagnostics
Gen-Probe competes with several companies in the molecular diagnostics market, including:
- Roche Pharmaceuticals (RHHBY)
- Abbott Laboratories (ABT)
- Becton, Dickinson and Company (BDX)
- Siemens AG (SI)
- JOHNSON & JOHNSON (JNJ)
- BIOMERIEUX (BIM-FR)
Blood Screening
Novartis AG (NVS) controls most of the nucleic acid blood screening market, and is also Gen-Probe's major collaborator in blood screening tests. Other competitors include Roche Pharmaceuticals (RHHBY), which sells the COBAS screening test for HIV and HCV, Abbott Laboratories (ABT), and National Genetics Insitute (NGI). Roche is the only established player in this market, however, as Abbott's system is only marketed for screening of HTLV, and NGI is a relatively small private company.
References
- ↑ GPRO 2009 10-K "Corporate Overview" pg. 1
- ↑ 2.0 2.1 GPRO 2009 10-K "Selected Financial Data" pg. 40
- ↑ Gen-Probe, Corporate History
- ↑ Answers.com, Hoovers Company Profile: Gen-Probe.
- ↑ FDA Approves Gen-Probe's Automated PROCLEIX(R) TIGRIS(R) System to Test Donated Blood With the PROCLEIX ULTRIO(R) Assay
- ↑ Gen-Probe, Product Pipeline
- ↑ Emory Researchers Study Test to Better Detect High-Risk HPVs and Cervical Cancer, Webwire
- ↑ Pap smear, Wikipedia
| |||||||
