UroCor, Unilab, AmeriPath, MedPartners, Epitope

Share on facebook
Share on twitter
Share on linkedin
Share on print
Share on email


HERE’S A PIONEERING EFFORT to more closely link diagnostics and therapeutics into a single product package.

UroCor, Inc. and Mallinckrodt, Inc. signed an agreement that allows Mallinckrodt to sell and distribute UroCor’s new radiation treatment for prostate cancer.

UroCor’s product, ProstaSeed I-125, is a radioactive pellet used in brachytherapy. This is a clinical procedure which uses ultrasound guidance to place the pellets in the patient’s prostate to fight cancer. For early stage prostate cancer patients, this can preclude removal of the organ, which often leads to problems of impotence and incontinence.

With more than 200,000 prostate cancer cases diagnosed annually in the United States, UroCor believes that about 60% are potentially treatable by brachytherapy. Seeds for a single procedure cost about $4,000. The potential market in the U.S. for such seed implants is $150 million.

UroCor’s strategic plan is to combine its specialized expertise in prostate cancer to differentiate its radiation seeds and work with Mallinckrodt’s access to the hospital market. UroCor’s primary business focus is to provide diagnostic, prognostic, and therapeutic services to urologists.

UroCor will put a dedicated sales force in the field to sell its diagnostic and therapeutic services to radiation oncologists and medical physicists.

Mallinckrodt will stock the ProstaSeed I-125 in its 35 nuclear medicine pharmacies, along with 80 independent pharmacies. Mallinckrodt will also provide direct sales and will include UroCor’s product in its hospital group purchasing agreements.

Mallinckrodt must meet minimum annual purchase levels. Sales revenues will be divided among the two companies according to an agreed-upon formula.

This relationship bears watching. UroCor’s revenues have come primarily from offering diagnostic testing services to urologists. (See TDR, June 23, 1997.) But the company has always wanted to provide these same urologists with therapeutics.

This strategy has begun unfolding during the last year. UroCor beefed up the number of sales people and has begun to offer certain pharmaceutical products to its urologist customers.

UroCor’s success in marrying diagnostic services with therapeutics will demonstrate the feasibility of this business strategy for other clinical labs that offer disease-specific testing services.


CALIFORNIA’S DOMINANT COMMERCIAL laboratory placed $155 million in private notes in September. Unilab Corporation is refinancing existing obligations in preparation for its sale to Kelso & Company, the leverage buyout specialists.

The transaction was a private placement. Apparently CEO David Weavil and rumored CEO-to-be Bob Whalen toured the country together to do the financial dog and pony show for potential investors. The refinancing is a necessary step prior to Kelso’s purchase of Unilab’s outstanding stock. Kelso will pay approximately $420 million in cash and notes to acquire Unilab.

Commercial laboratory owners consider this a high price, since Unilab’s annual revenues are in the range of $300 million. Because Unilab already has a big chunk of the California laboratory market, Kelso’s strategy to grow the company after the acquisition will be watched with interest.


MORE ACQUISITIONS WERE ANNOUNCED by AmeriPath, Inc. in September. The pathology-based physician practice management (PPM) company expanded its footholds in Wisconsin and Texas.

It acquired Associated Laboratory Physician Services of Wauwatosa, Wisconsin. This 18-physician practice serves the five hospitals of Milwaukee’s Covenant Healthcare System.

Winston N. Hollister, M.D. will be Managing Director of that AmeriPath business unit. He’s familiar to many pathologists as a recent past President of the American Pathology Foundation.

In Dallas, Pathology Associates of Texas has become an AmeriPath practice. This nine-physician group serves the two hospitals of the Harris Methodist Healthcare System. It also provides outreach services to several reference labs, including Quest Diagnostics Incorporated.


WHILE WE ARE ON THE SUBJECT of physician practice management companies, remember the PPM-behemoth known as MedPartners, Inc.?

The collapse of this $6.5 billion dollar giant caused the entire PPM industry to lose favor with Wall Street investors. It’s failure in California has left doctors holding $100 million in unpaid claims and hospitals holding another $200 million in unpaid claims. (See TDR, November 30, 1998.)

MedPartners recently announced that only 12 physician practices remain to be sold before it has totally exited the PPM business. To sever its past connections with its financial debacle as a PPM, MedPartners is assuming a new name.

It will now be known as Caremark Rx, Inc., and its major business service will be prescription benefit management. Once the New York Stock Exchange approves these arrangements, Caremark Rx will get a new trading symbol to replace the MDM it currently uses.


HOPING TO BROADEN THE USE of its patented oral fluid testing technology, Epitope, Inc. has obtained a $1.1 million Small Business Innovation Research Grant (SBIRG) from the National Institutes of Health (NIH).

The grant will fund development of a syphilis test using either blood or oral fluid samples. When successful, this saliva-based assay could affect testing volumes at clinical laboratories.

Currently there are 36 million syphilis tests done annually in the United States. That number is expected to increase as the Centers for Disease Control and Prevention (CDC) launches a nationwide program for the elimination of syphilis later this month.

Epitope wants to position itself in this market segment with its OraSure technology. Epitope’s HIV-1 test is already used in many AIDS clinics.


Leave a Reply


You are reading premium content from The Dark Report, your primary resource for running an efficient and profitable laboratory.

Get Unlimited Access to The Dark Report absolutely FREE!

You have read 0 of 1 of your complimentary articles this month

Privacy Policy: We will never share your personal information.