Park City Solutions, DIANON, IMPATH American Med Labs, Cytyc, TriPath Imaging

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TWO COMPANIES FINANCED by GTCR Golder Rauner, LLC, the private equity firm based in Chicago, announced a strategic relationship.

Park City Solutions, Inc. of Park City, Utah and American Medical Laboratories, Inc. (AML) of Chantilly, Virginia will work together to develop e-business services for healthcare, with a particular emphasis on clinical laboratory applications.

Park City Solutions recently acquired Chi Laboratory Systems, Inc. of Ann Arbor, Michigan, as well as a number of other healthcare-focused companies.

American Medical Laboratories (AML) has been furiously working on several informatics products and services. These projects are directed by an IS guru that AML hired away from Federal Express Corporation.

FedEx is justifiably famous for its sophisticated and useful information systems. AML wanted that expertise to help it develop information services for the clinical laboratory which would give it an added-value edge over competing laboratories.


IN THE BATTLE BETWEEN enhanced Papsmear technologies, Cytyc Corporation claimed an interesting milestone. During 1999, Cytyc says its market share doubled, from 9% to 19%.

In its year-end financial release, Cytyc also claimed that it had a 70% market share of the New England region. With approximately 55 million Pap smears performed annually in the United States, a national market share of 19% would equal about 10.5 million ThinPrep® preparation kits.

With Cytyc’s 1999 revenues at $81.1 million and ThinPrep kits retailing at $10.75 apiece, the arithmetic comes fairly close. Cytyc’s 1999 revenues almost doubled over 1998’s sales of $44.3 million.

Revenues at Cytyc climbed steadily over the year. This is evidence that the company is increasing the frequency with which ThinPrep kits are used. Total revenues were $81.1 million for 1999.

Cytyc also announced three promotions to Senior Vice President. These were Daniel J. Levangie, Director of Sales and Marketing; Joseph W. Kelly, Chief Financial Officer; and Ted S. Geiselman, Director of Technical Operations.


Over in Burlington, North Carolina, TriPath Imaging, Inc. has been busy. It announced contracts to place AutoPap® Primary Screening Systems into three of the largest clinical laboratories in Japan.

They are BioMedical Laboratories (BML), BioClinical Laboratories (BCL), and Special Reference Laboratory (SRL). These labs decided to adopt the AutoPap system after performing their own extensive clinical trials.

TriPath Imaging has worked hard to establish itself in Japan. Predecessor company NeoPath had a co-marketing agreement with Nikon as one initiative. Pap smear screening in Japan is handled very differently than in the United States. It is common for Japanese cytotechnologists to diagnose 200 Pap smears per day.

TriPath Imaging also inked a new agreement with Quest Diagnostics Incorporated that updates the former contract it had with SmithKline Beecham Clinical Laboratories. (See TDR, November 9, 1998.) Of note is the companies’ intent “to collaborate on advanced, next-generation screening technology, as well as on Internet-based software products for the digital storage and transmission of patient data and images.”

This demonstrates the potential of TriPath’s digital imaging technology to find application in other areas of laboratory medicine, including anatomic pathology. It also demonstrates Quest’s interest in having early access to any useful Internet-based applications.

TriPath Imaging also announced two new sales positions. Roger W. Martin will be Vice President of Sales and Marketing. He’s a veteran of Roche Diagnostic Systems and Becton Dickenson & Co. TriPath’s new Director of National Accounts is John D. “Jay” Xanthos, Jr., formerly with Quest Diagnostics Incorporated and Laboratory Corporation of America.


THERE’S ANOTHER SEGMENT of the healthcare industry that is about to feel the full brunt of healthcare e-commerce. That segment is hospital purchasing and supply.

A host of well-funded dot-com start-ups is targeting the $83 billion that hospitals spend each year on sup- plies and equipment. Some experts believe that savings of as much as $11 billion could result from shifting current purchasing practices over to Internet-based technology.

Everyone is in the hunt. They include GPOs like Premier, Inc.; distributors such as Owens & Minor, Inc.; for-profit hospital companies like Columbia/HCA Healthcare Corp. and Tenet Healthcare Corp; and an array of Internet start-ups, such as,, and

THE DARK REPORT expects this area of healthcare to undergo just as swift a transformation as that of lab test ordering and results reporting.


WHO SAYS YOU CAN’T MAKE MONEY in anatomic pathology? Both IMPATH Inc. and DIANON Systems enjoyed record sales and profits for 1999.

DIANON closed the year with $76.1 million in revenue. This was a 22% increase over 1998 revenues of $62.2 million. Net income was up 40%, from 1998’s $2.9 million to $4.1 million.

IMPATH posted even stronger growth numbers. 1999 revenues of $85.4 million increased by 52% over the $56.3 million it booked in 1998. Net income was $9.1 million for 1999, a 31% increase from 1998’s $6.9 million.

These are impressive numbers. When viewed together with the financial performance of AmeriPath, Inc. (see pages 9-14), it provides strong evidence that the marketplace for anatomic pathology services is profitable and possibly underserved.

Local pathology groups should reconsider their reluctance to invest in the business support infrastructure and sales resources needed to capitalize on opportunities in their regional market. If not, it’s a certain bet the national anatomic pathology firms will move in and capture that business.


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