Vincenzi,Welcome aboard the GBI thread and I reckon your UBS...

Vincenzi,

Welcome aboard the GBI thread and I reckon your UBS mate has given you a good steer here in getting into GBI. With hindsight I wish I entered in the last few weeks instead of the IPO!

Gripes aside this piece that you posted nails it in the last couple of paragraphs...HPV testing is most effective only when you can genotype ALL the various HIGH RISK TYPES (14 at last count).

GBI's test can be used as a primary screen in that it detects all of the high risk types AND can tell a woman and their physician which type has caused the infection.

For example a woman who tests high risk type positive 16 in year 1 and then 18 in year 2 but then 16 again in year 3 is in no where near as at much risk as a woman who tests 16 positive in 3 consecutive years.

It is PERSISTENT infection with the SAME HIGH RISK type of HPV that causes cervical cancer...NOTHING ELSE!

Other players are approaching this rapidly growing market (US$800m within the next 3-4 years according to Morgan Stanley) with a 2 test approach. 1st they test for high risk HPV and then (if positive) they genotype for types 16 & 18 only.

GBI's test does it all in a single test and can genotype all 14 high risk types not just 16 & 18 (these 2 types cause 70% of all cervical cancers) which means that 30% will still go undetected with just 16&18 HPV genotyping tests.

GBI's PapType test therefore provides more information and more relevant information and is far more PROFITABLE for a pathology lab as they will be able to get reimbersed for 2 tests by doing just a single test (after the genotyped tests get the required CPT codes, which the likes of Qiagen and Hologic are doing in the next few years)

In the long term insurance companies will most likely only reimberse a GBI type test that does both screening AND genotyping in a single test (OR they will CUT the level of re-imbersement on the 2 individual tests as a bundle)...intuitively this means that a high risk HPV screening test that can simulataneously detect AND genotype all 14 TYPES HAS PRICING POWER IN THE MARKET PLACE and to a certain degree can be a PRICE MAKER and not a price taker...THIS WILL BE VERY ATTRACTIVE TO A LARGE CORPORATE WANTING TO ENTER THE HPV TESTING MARKET and who do not have to worry about commoditizing an existing revenue stream.

This is plain and simple why GBI will be acquired (in a few years time, say late 2010) at a higher price that for example what Hologic is currently offering for Thirdwave (US$580m).

Due to the Sonic Healthcare deal GBI will be profitable before then as well!

We also KNOW that GBI's test WORKS as Healthscope have accreditted it to NPAAC STANDARDS.

This is not a drug it is a diagnostic test.

IT IS SO SIMPLE STUPID AND IT PERPLEXES ME WHY THE MARKET CANNOT UNDERSTAND THESE SIMPLE FACTS.

If anyone would like to disagree with me here or has an issue with my logic or an alternative view on why I am wrong PLEASE help me here.

cheers