PLT's Morris test on the face of it appears same same with regard to the genotypes it detects with difference being that it also tests for E6 and E7 proteins...these are over expressed when women are developing later stage cervical cancer. This has been the approach from a Norwigian company called NorChip.
The E6/E7 approach has struggled to get market traction and one would argue that with the ASCCP guidelines released last October (see page 15 of GBI prospectus) straight DNA testing for high risk HPV with ability to genotype is the way to go.
Hologic buying TWT last week for US$580m cements my view here.
Key then comes down to sensitivity/specificity versus the Digene Test and also versus Histology from patients/clinicians point of view and then COST/PROFIT of running the test from a path labs point of view...ie..handling steps, sample required, time taken for a run a batch etc...
REMEMBER THE PATH LAB IS THE CUSTOMER NOT THE PATIENT OR THE CLINICIAN...the Clinician will recommend to the patient what the likes of ASCCP recommend.
A player in this area like GBI or PLT NEED TO DEMONSTRATE THE ABILITY TO WIN OVER THE PATH LAB not a distributor and not the physician.
A physician orders a 'HPV test' or a 'genotyped HPV test' not the specific brand. The path labs decides on which brand/test to use based upon its own comfort of the quality of the test and then the economics of the test.
If GBI continue to win over the likes of Sonic, Healthscope plus others in the future I sleep well at night.
Remember that GBI can have a market value of circa $100m just from the profit it makes from selling to Sonic (assuming 25 to 30x PE)...additional path labs are cream that contribute to the very high operating leverage of GBI.
GBI Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
