When federal regulators last week approved Digene Corp.'s cervical cancer test as a primary screening tool for women over 30, they catapulted what had been a follow-up test into direct competition with the Pap smear -- and pushed the company into a potential $400 million-a-year market.
Now comes the hard part for the Gaithersburg company: winning over doctors, patients, commercial laboratories and insurance companies long accustomed to the Pap, a medical icon credited with reducing mortality from cervical cancer by 80 percent since the 1930s.
Digene's 2-in-1 process combines the Pap with a test for human papillomavirus, or HPV, a sexually transmitted disease that causes 99 percent of the 13,000 cervical cancer cases diagnosed each year in the United States.
For Digene, federal approval opens the door to a primary screening market of 35 million women a year, far more than the 3 million follow-up patients reported in 2002, biotechnology analysts say. "We have a big product here," chief executive Evan Jones says.
Many doctors say Digene's test more accurately rules out cervical cancer than does the Pap. But it's more expensive than the Pap, at about $50 to $60, compared with $14 to $30 for a Pap-only test. And it raises thorny questions about sexual fidelity some doctors may not want to broach.
"These are sizable challenges," said Paul Matsui, an analyst at Goldman Sachs & Co. "Adoption of the test is going to be measured and deliberate."
It's a watershed moment for a scrappy biotech that reported $48 million in revenue for fiscal 2002, maintains a sales staff of just 40 and has never turned a profit in its 18-year history.
Not an Easy Sell
Digene is well-known for converting skeptics, whether they're doctors or investors.
For more than a decade, its top three executives -- chief financial officer Charles M. Fleischman, chief scientific officer Attila T. Lorincz and Jones -- have brought an evangelical zeal to what they say is the simple case for using Digene's exam: If a virus is known to cause the vast majority of cervical cancer cases, shouldn't every gynecologist test for it?
They assumed the answer would be yes. But throughout the 1990s and, to a certain degree, into this decade, doctors have resisted the idea of widespread HPV testing. Many favor the Pap, a microscopic exam of cervical cells, even though experts agree that it can miss signs of cancer. Doctors will perform about 55 million this year.
Digene's interest in HPV testing goes back to the company's founding in 1985 by brothers Floyd and Leon Taub. It was an early start-up success story, moving out of the state's first biotechnology incubator, the Technology Advancement Program at the University of Maryland at College Park, in four years.
But the company's early HPV testing technology stalled, and by 1990 the Taubs were running out of money. Fleischman and Jones, college pals from the 1970s and business associates in New York, happened to be in the market for a biotech firm. Fleischman was an investment banker specializing in health care; Jones was a venture capitalist in the same area.
The pair pumped about $8 million into the company and bought the diagnostics division of nearby Life Technologies Inc., which had the only Food and Drug Administration-approved HPV diagnostic product. For the first three years, Jones often paid the bills out of his personal checkbook. Employees took stock instead of salaries.
Digene's technology was simple, but it had never been tried. The traditional Pap requires a cumbersome visual examination by a lab technician. In its place, Digene scientists designed a high-volume system that relied on automation. The test, they figured, could be used alongside the Pap and eventually, perhaps, as a stand-alone test. Digene's initial public offering, in 1996, brought $30 million and a chance to take the company's HPV test into human tests.
By 1996, Digene had developed a molecular test for the 13 high-risk strains of HPV known to cause cancer. Like the Pap, it requires a laboratory analysis of cervical cells collected in a doctor's office. But unlike the Pap, it is based on precise genetic testing.
It still wasn't an easy sell. "Physicians kept telling us they didn't understand the value of the test," Fleischman said. "It's hard to change medical practice. If you are an old doctor, you weren't exposed to the science. If you were a young doctor, you were often educated by an older doctor."
In 1999, the FDA approved the test as a follow-up for women with ambiguous Paps.
The Hard Data
Digene put a singular emphasis on patient trials. By 2002 it had run tests on more than 100,000 women, creating a mountain of clinical data for the FDA, medical associations and professional groups to consider. Most important: A large patient study whose results were announced in 2001 indicated that among women who had developed cervical cancer, 96.3 percent had a positive HPV test, while 99.5 percent of women with a negative HPV test did not have cancer, according to the National Cancer Institute.
As the evidence accumulated, the American Cancer Society endorsed the test, a federal advisory panel recommended approval, and an editorial in the Journal of the American Medical Association advocated its use.
Few doctors dispute the data. But not all of them are sure HPV testing is the best option for some women. They worry that the DNA-with-Pap will create a large class of women who test positive for HPV but are in no medical danger.
Millions of women carry the virus, but it only poses a danger to those over 30 whose infections persist, a determination that would require repeated and expensive DNA-with-Pap exams. Positive results are likely to raise sticky questions about marital fidelity.
"As a practicing physician, I don't want to have that conversation," said Thomas C. Wright Jr., an assistant professor of pathology at the Columbia University College of Physicians and Surgeons in New York. "If you are doing 40 Paps a day, that means at least two 20-minute conversations."
On the other hand, doctors say the DNA-with-Pap test can accurately rule out cervical cancer 85 to 95 percent of the time, compared with 70 to 80 percent for the Pap.
"You can almost without fail tell a woman who is negative on both tests that she does not have high-grade disease," Wright said.
He suspects that some gynecologists will continue to use a regular Pap and not get into HPV testing unless the Pap is irregular.
In the end, experts say, Digene's chances of supplanting the Pap smear as the testing standard may come down to the effectiveness of its sales pitch.
Digene has placed its $20,000 laboratory technology in 270 commercial labs and struck deals with two of the nation's largest diagnostic companies -- Quest Diagnostics Inc. of Teterboro, N.J., and Laboratory Corporation of America Holdings of Burlington, N.C. -- to perform lab analysis of its exams. Together, both diagnostic companies control about 40 percent of the Pap market, industry analysts said.
"We have plenty of supply. Now it's a question of demand," said Robert M. Lilley, Digene's senior vice president of global sales and marketing.
The company says it will roll out the approved test in 30 to 60 days. It plans a massive education program for physicians, patients and third-party payers. And it will try to woo women with direct marketing, something it has resisted until now, Lilley said.
Jones predicts that revenue will grow 40 percent this year to about $63 million, reaching about $90 million in 2004 -- the latter assuming a modest 2 to 3 percent market share. The company says it expects to become profitable this quarter.
Through a sales agreement, Lilley relied on rival Cytyc Corp. to market Digene's tests to physicians. The company reserves its in-house sales team to sell to commercial labs. That is likely to change. The company says it wants to build its own sales team of 30 to 40 workers. It will also double its laboratory sales force from 12 to 25, Fleischman said.
FDA approval of the follow-up exam means most doctors are familiar with the test. A March UBS Warburg survey of 146 gynecologists found that 82 percent are aware of the technology and 77 percent would use it as a primary screen once it obtained federal approval.
Doctors' adoption of the test will also be shaped by guidelines under development by the American Cancer Society, the National Cancer Institute and a handful of professional medical societies. The greater the intervals between recommended DNA-with-Pap tests, experts say, the more likely it is that physicians and insurance companies will agree to use and pay for the HPV test. Preliminary guidelines from the American Cancer Society already call for up to a three-year interval for women who test negative for the virus.
When it comes to reimbursement, Digene says 90 percent of insured women in the United States are covered for the follow-up test. But it is unclear whether -- or how quickly -- payers will begin to cover the DNA-with-Pap as a primary screening test, when far more women will begin using it. Digene says the test is cost-effective because, for most women, it eliminates the need for an annual Pap.
Still, Cytyc, whose liquid-based Pap test, ThinPrep, was approved in 1996, found it took about four years to gain routine reimbursement for its new test, winning over one company at a time.
Alan M. Garber, a professor of health policy at Stanford University and an adviser to Blue Cross Blue Shield Association, a nonprofit group of insurers, said reimbursements will be influenced by women's interest. "The demand in this area is often driven by the patients themselves," he said.