UroCor, Inc.; Histology & AP.

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UROCOR, INC. MATCHES THERAPEUTICS WITH DIAGNOSTICS

With the recent signing of a co-promotion agreement with Zeneca Pharmaceuticals, UroCor, Inc. is positioned to offer therapeutics as a complement to its diagnostic testing.

Based in Oklahoma City, UroCor is a fast-growing company which offers diagnostic testing and disease management services to urologists throughout the United States. Profiled in an earlier issue of THE DARK REPORT, UroCor represents a unique business model for the future of clinical laboratories.

UroCor’s business strategy is to provide value-added services to urologists. The company believes that its established relationship as a provider of diagnostics would be complemented if it also offered therapeutics. Further, after UroCor performs the diagnostic testing on the urologist’s patient, it then has knowledge about the details of the patient’s condition. Accordingly, UroCor believes that it is well-positioned to offer the urologist support in choosing the appropriate therapy, including pharmaceuticals.

Under its agreement with Zeneca, UroCor will offer two products for the treatment of prostate cancer. Next year UroCor expects to offer a therapeutic for treatment of bladder cancer, assuming that it passes FDA review.

UroCor’s strategy seems aligned with market trends toward clinical integration. The company’s goal is to become a preferred provider of disease management services to urologists. UroCor’s efforts to combine diagnostics and therapeutics within the same company is a pioneering initiative. THE DARK REPORT is unaware of any laboratory which has successfully implemented a similar market plan.

UroCor demonstrated sustained revenue growth during the past six years. It is counting on its efforts with therapeutics to further boost revenues and operating profits. The company is well-respected for its management execution and marketplace performance. If it succeeds in marketing therapeutics to its urologist clients, it will make a relevant case study for how to deliver both therapeutics and diagnostics.

COMMERCIAL LABS GIVING UP HISTOLOGY & AP

THE DARK REPORT continues to get reports that the national laboratories are selectively reassessing their involvement in histology and anatomic pathology. This is occurring city by city. During the fee-for-service era, it was common for commercial laboratories to contract for AP services, then subcontract that work to local providers.

In recent years, these same laboratories have studied the profitability of different testing lines. Cytology and anatomic pathology are clear money-losers to the national laboratories, for a variety of reasons.

Since the national laboratories consider this segment of the business to be unprofitable, they are exploring ways to uncouple the AP work from clinical testing and let local providers contract directly. In certain cases, this can involve selling an existing histology laboratory currently owned and operated by the national laboratory. Interested pathology practices should stay alert to these opportunities.

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