CEO SUMMARY: Single-handedly, Cytyc Corporation has built the market for thin-layer Pap smear testing. Executives at TriPath Imaging are now ready to challenge Cytyc’s dominance by offering what they believe is a different value proposition to labs: an automated liquid preparation system married to an automated Pap smear screening system that can read both thin-layer and conventional Pap smears.
AFTER MORE THAN TWO YEARS of obstacles and unplanned delays, TriPath Imaging, Inc. is now a reinvigorated competitor in the marketplace for enhanced Pap smear technology.
TriPath gained clearance from the Food and Drug Administration (FDA) this fall to market, as a single integrated system, its automated AutoCyte® PREP instrument for liquid preparation with its AutoPap® Primary Screening System.
Several Features Added
The FDA approval, issued October 5, actually involves several features of interest to clinical laboratories and pathology group practices. “First, the AutoPap system is immediately cleared to screen the liquid preparation slides of our PREP product,” stated Paul R. Sohmer, President and CEO of Tripath, “thus allowing AutoPap to do primary screening for both Autocyte Prep slides and conventional slides.
“Second, our AutoPap primary screening system now has labeling that indicates the AutoPap is effective in ranking both PREP and conventional slides according to the potential for abnormality,” he continued.
“Third, AutoPap is approved to screen slides with both glass and plastic cover slips,” explained Dr. Sohmer. “Besides these three important elements, the FDA approval also recognizes a number of other elements, based on the performance of the combined automated instrument system in clinical studies at several sites.”
For TriPath Imaging, based in Burlington, North Carolina, the FDA’s action is a long-awaited event. In the summer of 1999, when TriPath was created by the merger of AutoCyte, Inc. and NeoPath, Inc., company executives expected a relatively speedy approval from the FDA that would allow it to market its automated PREP with the AutoPap Primary Screener.
“It’s been a long time coming,” observed Dr. Sohmer. “The original submission was September 1999. Along the way, we worked with the FDA to revalidate certain aspects of earlier clinical studies. The FDA also did their own inspection last spring prior to announcing its decision on October 5, 2001.
“As it turned out, this additional regulatory scrutiny has worked to the benefit of our products,” added Dr. Sohmer. “We can definitely say that our PREP and AutoPap technology has been thoroughly reviewed by the FDA.”
Now that TriPath Imaging is cleared to market PREP and AutoPap as a single integrated system, it has the potential to introduce new competitive dynamics into the market for liquid-based Pap smear testing. Until now, Cytyc Corporation’s ThinPrep® test has been the unchallenged leader in liquid preparation technology.
But TriPath believes that situation will change, because it can now offer laboratories a different value proposition. “For starters, our combined automated liquid preparation and automated primary screening will be offered to lab customers at a price that will improve the overall economics for labs currently utilizing our competitor’s liquid prep,” declared Dr. Sohmer.
“This advantage is further complemented by the ability of the AutoPap Primary Screener to handle both liquid prep and conventional Pap smear slides coverslipped with either glass or plastic,” he added. “This improves patient care and lowers direct costs to the lab.”
Integrated Systems Sales
In the last 60 days, this value proposition has already encouraged five existing AutoPap customers to step up and acquire the full integrated PREP and AutoPap system. The labs are Geisinger Medical Center (Danville, Pennsylvania), Doctors Laboratory (Valdosta, Georgia), SouthEastern Pathology (Rome, Georgia), Delta Pathology (Shreveport, Louisiana), and Hadden Pathology (Fresno, California).
The rapidly-developing market for HPV testing has not escaped TriPath’s notice. “We have a good working relationship with Digene Corporation,” said Dr. Sohmer. “We expect Digene to submit a supplement to its PMA (pre-market application) with the FDA in first quarter 2002 that would allow its Hybrid Capture® HPV test to be run from the PREP liquid specimen collection. That’s a feature many of the largest labs want.”
Among the rapid-fire developments at Tripath is one particular product that THE DARK REPORT finds most intriguing. It is Tripath’s next-generation of Pap smear testing technology, soon to hit the market. It represents a good example of how marketplace feedback often takes new technology in directions not predicted by its developers.
“Our next generation Pap smear screening system is called AutoPap GS,” noted Dr. Sohmer. “Basically, it is location-guided screening cued by the AutoPap analysis of individual slides. It involves a microscope station equipped with a computer-guided stage.”
Market Shift to Liquid Prep Reflected in TriPath’s Sales
AS LIQUID PREPARATION PAP SMEAR tests seized a growing share of the market from conventional Pap smears, this shift in market demand was reflected in TriPath Imaging’s product sales.
In its third quarter earnings report, TriPath reported net revenues of $5.3 million, compared to $8.1 million for third quarter 2000. This was a decline of 35%, attributed to slower sales of the AutoPap Primary Screening system, which, prior to the FDA’s October 5 decision, was limited to screening conventional Pap smears.
In contrast, sales of TriPath’s PREP instruments and consumables were up by healthy margins, reflecting the clinical marketplace’s preference for liquid prep Pap kits. PREP revenue increased by 104% over third quarter 2000.
Lab Needs Are Changing
Dr. Sohmer says this product was developed to specifically meet the changing needs of its cytology customers. “Under its existing FDA approval, Autopap reads the Pap slides and ranks abnormality within the population of slides it is screening. It is permitted to classify up to 25% of the slides as normal,” he noted. “Given the economic advantages of the instrument, intuitively, it would seem that labs would be interested in boosting the sort rate percentage, which would allow more slides to be classified as normal and not undergo human review, except for QC/QA.
“However, labs asked us to use AutoPap’s evaluation of each slide in a different way,” he continued. “Auto-Pap ‘maps’ cell locations on the slide and then ranks them according to their potential to be abnormal. Labs asked us to use this information to guide cytotechnologists and cytopathologists.
“In fact, TriPath’s partner in Japan, Nikon, had independently developed such a system around AutoPap,” Dr. Sohmer said. “In Japan, the Nikon system is reducing the time required for a cytotech to accurately screen Pap smears by as much as 65%.”
TriPath found a speedy way to develop its location-guided screening product. “We were selling an imaging workstation called Slide Wizard that was developed by AutoCyte and its predecessor, Roche Imaging Systems,” noted Dr. Sohmer. “For us, this made the ideal platform for location-guided screening. We’ve interfaced it with the AutoPap. The combined instrument platform, called AutoPap GS, is compatible with both AutoCyte PREP and conventional Pap slides.
“AutoPap GS was introduced into the international marketplace earlier this year,” he said. “We are presently working with the FDA to design the clinical protocol for this study. We anticipate that trials in the United States will be initiated by the first part of 2002.”
To prepare for the FDA’s favorable ruling in October, TriPath had beefed up its sales force. There are now 85 sales reps in the field, including a nationwide “physicians’ detailing” team contracted through Nelson Professional Sales. This marketing effort is already raising TriPath’s profile within the laboratory and pathology professions.
THE DARK REPORT predicts that the market for cervical cancer screening will undergo some surprising changes in the next 24 months. A number of research labs are attacking this problem throughout the world. Meanwhile, there is now a solution for automating both liquid preparation and primary screening. Also, TriPath’s strategic plan to introduce location-guided screening for cytotechs represents a new option for lowering costs and improving care.
Beyond that, several new technologies have the potential to eventually dislodge Pap smears as the gold standard for cervical cancer screening, particularly if new technologies for HPV detection and treatment and new molecular markers for cervical cancer are developed in the near future.
Molecular Oncology Figures Big In TriPath’s Future Product Offerings
WHILE WAITING FOR FDA APPROVAL to market its PREP and AutoPap as an integrated, automated Pap smear screening system, Tripath Imaging, Inc. has not been idle. It’s developed an active program in molecular diagnostics.
This summer, Becton Dickinson and Company (BD) selected TriPath Imaging to develop and commercialize molecular diagnostics and pharmacogenomics tests for cancer. This work is a result of BD’s strategic alliance with Millennium Pharmaceuticals, Inc. to identify and commercialize markers for various cancers and diseases.
Focus On Several Cancers
“In this relationship, our focus is on malignant melanoma and cancers of the prostate, breast, ovary, cervix, and colon,” explained Paul R. Sohmer, M.D., President and CEO of TriPath Imaging.
“As part of this strategic alliance, BD invested $25 million in Tripath Imaging,” added Dr. Sohmer. “It also merged its Baltimore-based BD Gene division into TriPath Oncology, a new, wholly-owned subsidiary of TriPath Imaging located in Research Triangle Park, North Carolina.
“We see the explosive growth of molecular pathology as playing to the strengths of TriPath Imaging,” declared Dr. Sohmer. “This was the other element behind the merger of AutoCyte and NeoPath in 1999. On one hand, there was a compelling business opportunity if PREP and AutoPap could be successfully married into an integrated, automated system for Pap smear screening.
“On the other hand, the body of imaging technology developed by AutoCyte, NeoPath, and Neuromedical Systems, Inc. (NSI) (its assets acquired by AutoCyte from NSI’s bankruptcy) created a body of imaging technology that is unmatched. “TriPath Oncology is the division which will directly apply this technology to the field of molecular diagnostics,” he continued. “For example, as BD and Millennium focused on tissue-based assays, they needed a way to capture and evaluate a variety of markers. Our imaging technology provided a good solution to that problem.”
Telepathology In Use
“This is also taking us into telepathology,” noted Dr. Sohmer. “We’ve already linked sites within Millennium and TriPath with our telepathology solution. This allows us to link and concurrently look at the same images.
“We also envision this having value among clinicians. For example, once our Melastatin test is cleared for clinical use, our telepathology system could be used by pathologists to allow the referring dermatologist to look at the image while they discuss it,” noted Dr. Sohmer.
Assays Ready After 2003
For TriPath Oncology, commercial fruits from molecular diagnostics are years away. “While we anticipate introduction of an assay for malignant melanoma in 2002,” said Dr. Sohmer, “clinical home brew tests for other cancers will follow in late 2003 and early 2004 concurrent with FDA clinical trials.”
Molecular markers for cervical cancer are part of the research targets of TriPath Oncology, BD, and Millennium. These firms may have a hand in developing a screening test for cervical cancer which eventually supplants the Pap smear as the clinical standard.
“New research into the causes of cervical cancer is changing our understanding of this disease,” observed Dr. Sohmer. ‘It would not be surprising if a new marker is found which proves better at screening for cervical