New Cytology Technology Entering Study Phase

AmeriPath signs agreement with Ampersand to develop technology and do clinical studies

CEO SUMMARY: There’s a new contestant in the ongoing battle to win the Pap smear technology wars. Ampersand Medical Corporation, by signing a strategic alliance with AmeriPath, Inc., has signaled that it’s ready to bring its technology to market. AmeriPath will play a major role in expediting clinical studies and both companies hope to formally start the FDA approval process within the next three or four months.

PATHOLOGY GIANT AmeriPath, Inc. announced a strategic alliance with Chicago-based Ampersand Medical Corporation on March 27.

This strategic alliance calls for both companies to cooperate in the joint development of several new cytology technologies and products owned by Ampersand. Under terms of the agreement, AmeriPath will “receive an undisclosed amount of equity in Ampersand as compensation for this development work.”

AmeriPath will also support Ampersand’s research and development by providing laboratory testing support and doing the clinical trials necessary to gather information to support the FDA approval process. Ampersand Medical will pay AmeriPath on “favorable terms” for these services.

New Cytology Products

At least four of Ampersand’s new cytology products will be part of this strategic alliance. They are: 1) InPath In-Cell™ HPV test; 2) InPath CerviPak™ , a liquid-based slide preparation system for point-of-care slide creation; 3) InPath CocktailCVX™ & Slide Based Test, a fully automated biomolecular screening system; and 4) InPath e2™ , a new type of cervical cell collection device described as “patient friendly.”

This strategic alliance is notable for two main reasons. First, it is evidence that a national pathology company considers Ampersand’s new biomolecular-based technologies and products to be credible and worthy of further investment. Second, it demonstrates how the national pathology companies are using their size and market influence to gain early access to promising new diagnostic technologies.

AmeriPath confirms this fact. “We built our Center for Advanced Diagnostics (CAD) in Orlando specifically to be the vehicle for development work and clinical trials,” stated Dennis Smith, Jr., M.D., Senior Vice President and Medical Director at AmeriPath. “All along, the idea was to leverage the resources of CAD and the community-based pathologists of AmeriPath to give us a prime shot at doing support research and clinical studies for new technologies and products that we think have great potential.

Leaves Cells Undisturbed

“The InPath cervical cancer screening technology is a good example,” he continued. “Ampersand has an assay of multiple molecular markers for cervical dysplasia, as well as the E6 and E7 oncogenes of the Human Papillomavirus (HPV). Once the test is completed, it leaves the cells undisturbed. This permits conventional staining and microscopic review by the pathologist, if a review of this specimen using conventional methods is required.”

“That’s right,” agreed Ampersand Chairman and CEO, Peter P. Gombrich. “We think the fact that the cells are not destroyed in the testing process is a key benefit in bringing the technology to market, because it allows pathologists to always follow-up with a conventional analysis if required. But there’s another advantage to our InPath Cocktail-CVX test. It takes just 20 minutes to get a complete result. In addition, the In-Cell HPV test takes approximately 90 minutes for a result, compared to the hours required to complete HPV tests using DNA-based technologies.”

AmeriPath and Ampersand are poised to immediately begin clinical studies of the InPath system. “We expect to have the first important clinical study completed within 90 to 120 days,” said Dr. Smith. “After assessing this information, we will begin submitting the necessary information to the FDA to launch the approval process.”

Despite the difficulty of accurately predicting how long the FDA will take to approve specific technologies for clinical use, Gombrich believes his company’s products offer a unique level of reassurance for FDA regulators. “Remember, after doing tests with our technology, the original cells remain undamaged and can be Pap stained and reviewed by a pathologist in the conventional manner. This is the ultimate quality control for a new product. This fact may encourage regulators to act expeditiously, since there is a way to accumulate clinical data in the early stages of implementation while having a way to constantly check the accuracy of this new assay,” noted Gombrich.

From AmeriPath’s perspective, Ampersand’s technology represents a possible gateway into other diseases besides cervical cancer. “We’re excited about the underlying technology which supports Ampersand’s cervical cancer diagnostics,” noted Dr. Smith. “We think it has potential in non-gynecological applications and will shortly begin to research applications of this technology in urine and sputum specimens.”

Non-Exclusive Relationship

Clearly both parties to this strategic alliance have high expectations. “Although this relationship is non- exclusive,” explained Gombrich, “AmeriPath will participate in new product development and has the potential to earn royalties from sales generated by these products.”

AmeriPath also expects competitive advantage from this alliance. “Since we’re conducting the clinical studies, we’re in the prime position to evaluate the data and understand, ahead of anyone else, how this technology performs in clinical settings,” stated Dr. Smith. “That can position us to be first to introduce the resulting products into the clinical marketplace.”

For Ampersand, the active participation of AmeriPath is a strong vote of confidence. Until now, Ampersand’s strategy has been to develop its technology as a Pap smear screening system which can be used in laboratories or at the point of care, thus facilitating its use in lesser-developed countries around the world. It just finished the pilot phase of a study in China involving 200 women. In the next phase, the trial will involve 9,000 women and should be complete in early summer.

AmeriPath’s interest in Ampersand was heightened by results of other clinical studies which were published late last year. AmeriPath’s willingness to support this technology for applications in the United States encouraged Ampersand to accelerate its plans to seek FDA approval for domestic clinical use of the InPath system.

Important Developments

THE DARK REPORT believes the strategic alliance between Ampersand Medical and AmeriPath represents several important developments in the pathology marketplace.

First, it’s a sign that Ampersand’s InPath system has reached a point where some credible players believe it can be developed into a product good enough to compete with both the conventional Pap smear, as well as new Pap technologies, including ThinPrep® , PREP® , AutoPap® , and HPV testing. If true, this is another long-term wildcard in the cervical cancer screening market.

Second, the alliance itself demonstrates how national lab and pathology companies will use their size and market influence to get an early look at developing technologies and negotiate competitive advantage as a co-developer and marketer of these technologies.

Third, international applications and international markets will become increasingly important in validating technology. Ampersand’s clinical studies in China mirror recent clinical studies of Digene Corporation’sHybrid Capture® II HPV test in Costa Rica and South Africa.

High Hopes Surround This Cervical Collection Device

Here is the InPath e2™ cervical cell collection device, developed by Ampersand Medical Corporation of Chicago, Illinois. Made of silicon, it is an anatomically- designed, single-use balloon. The device is placed through a speculum into and against the cervix. Air is introduced into the device, expanding it firmly against the walls of the entire cervix. Cells adhere to the balloon’s surface. The balloon is then placed into a liquid preservative, where the cells float off the balloon, into suspension.

Because of the design of the device, it can do two things better than a conventional cervical brush. One, it can simultaneously collect both endo- and ecto-cervical cells in a single step, from the entire 360-degree dimension of the cervix. Ampersand says this increases both specimen adequacy and the number of cell counts in the vial.

Two, the InPath biomolecular markers for cervical cancer can be applied to the cells while they remain on the collection device. This permits the collection device to act as a cervical “map” and show the precise place on the cervix where cells which test positive for cancer are located.

Perceptive observers will have already noted another benefit to this type of collection device. Because the e2 Collector is smooth- surfaced and is not “scraped” across the cervix, it does not irritate the cervix like conventional brushes and spatulas. Thus, women find it more comfortable and do not suffer bleeding, cramping, irritation, or pain as a result of the collection.

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