See 3rd last paragraph beginning with the word...

See 3rd last paragraph beginning with the word Third...interesting to note that GBI's test uses PCR in a highly innovative way to produce a genotyping HPV test...considering that this is the gold standard it must well position GBI for strong data generation for their formal clinical trials with the FDA

"they do PCR sequencing and they use PCR sequencing as truth or the gold standard."

GBI's PapType test stacks up also along all the lines on why they (Holgic) think Thirdwave's test can be highly competitive against the incumbent Digene/Qiagen HPV test and hence why they just paid US$580m to get their hands on it...GBI now just needs to generate the clinical data

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FINAL TRANSCRIPT


Jun. 10. 2008 / 5:40PM ET, HOLX – Hologic at Goldman Sachs Healthcare Conference


Howard Doran —Hologic—President, Diagnostic Products
As far as differences between the products and why we think it’s a tremendous opportunity, I basically want to talk about four things that we think all add up to a real nice economic package for the laboratory to considering bringing in a different platform.

The first, and Glenn spoke a little bit about some of these in small detail, is operationally, we believe if you’re comparing the Third Wave to [Qiagen] manual methodology, or, as you get further down the path of greater automation in some of the larger labs, there are still many front end steps as far as the accessioning process that need to be done manually from med techs within the laboratory.

So, from a manual methodology, we went out to a couple different laboratories during our due diligence and watched them do both processes and interviewed them and talked about what the pros and cons were and most folks said that the Third Wave assay took about three to four hours less to complete a single batch.

We also went to the operators manual of Qiagen as well as compared to what the proposed operator’s manual would look like for Third Wave and you can just see by the magnitude of the steps and the times that it takes to run the various stages of it, that we came to the same answer that it was about three or four hours. So, the net-net of what that all means is operationally, we believe that’s it’s about $0.75 to $1.25 per test on small to medium-sized laboratories, the favorability operationally. I would expect Quest or [lab work] to be more efficient to that. So the number to be slightly less. But we think there’s an economic discussion surrounding productivity and workflow within the laboratory that would be compelling.

The second is QNS, and again Glenn talked about that, which means quantity not sufficient to run the specimen. So, I want to just try to give you an example on what that means economically. If you take a small laboratory doing 10,000 HPV tests a year, we know out of the ThinPrep vial, about 5% of the time there will be not see enough remaining fluid after the pap to actually run the test. And that causes two problems.

One is the lab cannot obviously run the test, which then disappoints the clinician who’s ordered it. So they get relatively angry that they’ve asked for additional piece of information for their patient and they don’t get it, so they start blaming the lab, is there a problem here. And secondly, the lab is now disappointed that — it has a ticked off customer, but more importantly, they now can’t bill for that event. They have a requisition ordering a test that they can’t perform.

The Third Wave assay reduces QNS by about 80%. So again, back to that 10,000 test example, 5% of 10,000 is 500 tests, with the Third Wave assay, you’ll be able to do 400 additional tests that you would not be able to do with the current platform and Medicare pays about $50 for the assay, that’s $20,000 of added revenue for a test that you were not prior able to perform. You compare that to 10,000 test within the laboratory, that’s about a $2 per patient advantage economically.

Third, Glenn had mentioned specificity, we talked to numerous customers that basically had both platforms and when they brought the Third Wave technology and they did a validation comparing Qiagen to Third Wave. So, what they do is they take the same patient sample, they run it through both pieces of equipment and what they then do is they look at the discordant cases. And what they do with the discordant cases, meaning one set positive, one site negative, or vice versa, they do PCR sequencing and they use PCR sequencing as truth or the gold standard. And depending on which lab and which setting, between 70% and 80% of the time, that PCR sequencing favors the answer that was from the Third Wave assay. So, when we were — we’re talking about specificity, that’s in the context of what we’re discussing.

And then lastly, if you take the $2 to $3 of operational on the front end benefit, you couple that with, again, greater specificity on the back end, Third Wave will have the first — or Hologic will have the first 16 and 18 genotyping available to the market so it’s an additive revenue stream on top for the laboratory.

So, we think you couple that all together, we have a very attractive package, we have a very attractive economic situation for our laboratory customers and at the end result, better information and better testing for the OB/GYN patient. So, it makes a lot of sense and we think we can do very well in the marketplace.