I find this interesting. I asked Doug in the webinar where they...

I find this interesting. I asked Doug in the webinar where they confirmed the FFN deal, whether the TLIiq system was being replaced (should the targets be reached) by the LDX product. He confirmed that it would be.

I do find it interesting given there are 2 devices they run the FFN tests on that I can see on the Hologic site:

- TLIiq system

- Perilynx System

The 10q system are the Q cassettes they use in conjunction with the TLIiq or the Perilynx system (the actual assay device). The TLIiq and Perilynx are the readers.

The technology behind the FFN tests was developed by Adeza Biomedical (back in 1999?) which was acquired by Cytyc Corporation which was then acquired by Hologic. The trademarks for all the devices in FFN are listed under Cytyc.

Background on FFN Testing:

Quickcheck does not use thereader and is a basic dip stick test with no printout and no ability to storethe patient record.

Quickcheck v TLIiq

Now that there is some clear understanding on the background of FFN testing its important to note that the Perilynx system isnotfor sale in the US. Only the TlIiq system can be used in the US.

This leads to some important questions I have around the development of this upgraded device which could lay further understanding of the “transformational” deal this is:

• Cytyc is a manufacturer who was acquired by Hologic. Why not fund this internally to create a next generation product given they technically are the creators of this exact test/device?
• The devices need to be placed in each area that is using the TlIiq currently. Is there going to be a recall on old TLIiq devices (appear to be licenced from Hologic) and replaced with the new LDX system?
• If so, the initial cost of the device will be how much? TLIIQ at one point was $2000 for the device itself plus ongoing Qsette tests. Is LDX manufacturing this long term for Hologic or is Hologic paying the IP Payment of $10M for the rights to manufacture the Leelu solely for their FFN tests?
• Is there ongoing annuities from each device licenced from Hologic ongoing and each of the test strips to be used in each device (replacing the Qsette)?
• Is there potential for the LDX device to be eventually shipped worldwide to replace the Perilynx device in the rest of the world? Place of manufacture annuities?
• The Leelu reader is used for a multitude of different tests. Will there be ongoing additional tests for Hologic in the one device to test for other sexual health issues? Hologic and LDX already have an agreement in place for STI testing etc. Will utilising the Leelu reader provide further ongoing revenue for LDX from the implementation of other tests on the platform licenced to Hologic to conduct?

2.5Million prenatal testing done in the US annually. Circa $400M in testing. I estimated around $100-$150M in FFN testing via Hologic.

Many questions, substantial potential, future licencing with other partners?