Cytyc's Breakout Year

01 Jan 2000

Cytyc Corp., which makes the ThinPrep test for cervical cancer screening, has had a breakout year. A new deal with Quest Diagnostics Inc., reimbursement from a key managed care organization, Aetna, and weaker than expected competition is driving sales and the company's stock price.

Events in the second half of 1999 put to rest any doubts people might have had about the commercialization of Cytyc Corp. 's ThinPreptest for cervical cancer screening. According to Al Kildani, an analyst with Pacific Growth Equity, people following the market were concerned about reimbursement and competition, notably from TriPath Imaging Inc. , the only other company to receive FDA approval for a liquid-based cervical cancer test (see "Smear Campaign," IN VIVO, June 1996 [A#1996800138). But TriPath's labeling for its product, which got approval in June of last year, isn't as strong as Cytyc's; moreover, it was second to market, coming out more than two years after the ThinPrep. And, in 1999, Aetna agreed to reimburse for the ThinPrep at reasonable rates, making it the last of the major insurance carriers to support the product, Kildani notes.

But Cytyc's deal with Quest Diagnostics Inc. [See Deal], doing 10 million Pap smears a year. It has agreed...