Digene test to be used in U.K.; Method to detect HPV will be part of pilot program


Digene Corp. said yesterday that the United Kingdom will use its HPV test, which helps detect cervical cancer in women, in a pilot program for its national screening program.

Company officials and analysts said the announcement is a major boon for the company, and investors agreed. Shares of Digene rose $5.8125, or 15 percent, to close at $39.875 yesterday.

"It's a big step forward for the company," said Vandana K. Bapna, biotechnology equity analyst with Hunt Valley-based Offutt Securities Inc. "It could start a chain reaction where other national governments might be encouraged to adopt the test."

More than 4 million women are screened annually through the United Kingdom's National Health Service Cervical Screening Programme. Digene's human papillomavirus (HPV) test will be used as a secondary test for women whose Pap smear results are inconclusive.

Digene President Charles M. Fleischman estimates that 300,000 of the women tested in the United Kingdom will receive such results. Normally, a woman whose Pap smear results are inconclusive would be tested with repeat Pap smears and more invasive and expensive procedures, often unnecessarily, he said. Since HPV, a common sexually transmitted disease, is the primary cause of cervical cancer, the test can identify women who are not at risk and eliminate the need for additional procedures.

The pilot program will run one year beginning this summer. Fleischman said that if the test is adopted permanently for use on the same group of women it would mean annual revenue of $3 million to $5 million.

Digene is conducting additional clinical trials to assert the test's reliability as a primary screening method. If the HPV test is adopted by the United Kingdom as a primary screening method, it would mean annual revenue of $30 million to $50 million, Fleischman said.

Bapna said she thinks there is a good chance the United Kingdom will adopt the test beyond the pilot program and eventually as a primary screening method.

Clinical trials have shown the test to "have higher sensitivity, higher specificity and increased reliability" compared to the Pap smear, she said.

In the United States, the HPV test, which costs labs $20 to $25 per kit, was approved last year by the Food and Drug Administration as a secondary procedure and Fleischman said more health care providers are adopting it as a follow-up to abnormal Pap smear results.

Digene also announced yesterday that its Hybrid Capture HBV test, which determines if the drug therapy being used to treat Hepatitis B patients is working, was approved by the French and Swiss governments for commercial sale.

During its last fiscal year, which ended June 30, the company lost $9.30 million, or 65 cents a share, on revenue of $17.47 million. In the second quarter of fiscal 2000, which ended Dec. 31, Digene lost $1.6 million, or 11 cents a share, on record revenue of $5.3 million.

Bapna said she projects the company will begin to show a profit in its fiscal year 2001.

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