TriPath expects narrower price differences between its SurePath and Cytyc's ThinPrep Pap test alternative over the long-term after receiving FDA sign-off on labeling that puts the tests on par for efficacy.

The TriPath liquid-based cytology system, including the SurePath test pack and PrepStain slide processor, received expanded approval May 5 for labeling with data showing a 64.4% greater detection rate than conventional cytology slides for high-grade and more-serious squamous intraepithelial lesions (HSIL+).

TriPath's multi-center, direct-to-vial clinical study showed a detection rate for HSIL+ of 405/58,580 for SurePath slides compared to 248/58,988 for conventional slides.

The firm estimates its test currently is priced about $1.50-$2.00 lower, on average, than ThinPrep, which received approval in 2001 for labeling that indicates a 59.7% greater detection rate than standard Pap smears for HSIL+.

While the TriPath label's stated detection rate is slightly above that for Cytyc, it remains to be seen to what extent TriPath can parlay its new labeling claims into expanded market share.

The cost differentiation between the liquid-based cytology systems previously offered labs an incentive for choosing TriPath's test over Cytyc's. Nevertheless, Cytyc dominates the cervical cancer screening market with a roughly 64% share compared to TriPath's 9%, according to TriPath. The firm hopes to increase its share to 12% by year-end.

In part due to the price differences, the UK Department of Health estimated in March that by using SurePath instead of ThinPrep tests, national costs would be reduced by roughly $13.2 mil. (¹ Also see "International News In Brief" - Medtech Insight, 24 March, 2003., p. 17).

While TriPath has "no plans" to change its list price immediately due to the expanded FDA approval, "we will not always have lower prices," CEO Paul Sohmer acknowledged during a May 7 investor call. Over the past 18 months, pricing already "has gone up 20% for our new customers," Sohmer said.

Of the 11% increase in SurePath revenue achieved during the first quarter of 2003, 7.9% was derived from an increase in sales volume while the remaining 3.1% came from raising prices, TriPath explains.

Emphasizing "the value that our system offers" in its labeling will help support gradually increased prices, Sohmer indicated. In addition, the firm will seek to expand the number of SurePath studies in peer reviewed journals by fostering continued relationships with academic institutions such as Massachusetts General Hospital, Yale University and Johns Hopkins.

To help drive market share expansion, the firm also plans to seek improved relationships with larger U.S. labs. Kaiser Permanente California and Kaiser Permanente Northwest announced on May 5 agreements with TriPath to purchase a total of three FocalPoint automated slide profilers, which could lead to more instrument placements down the road.

In February, the firm scored a coup by signing an agreement with Quest Diagnostics, which formerly held an exclusive agreement with Cytyc for cervical cancer screens (² Also see "Digene DNA Pap Approval Anticipation Boosts Stock 45% In February" - Medtech Insight, 10 March, 2003., p. 28). Currently, a majority of TriPath revenues are derived from small-to-medium sized labs.

In addition to making the most out of the price advantage, TriPath also has been able to offer labs an approved automated cervical cytology imager. However, Cytyc expects imminent FDA approval of its automated imaging system.

Cytyc and Digene have yet to announce whether the two firms will renew a co-marketing agreement for Digene's Hybrid Capture 2 human papillomavirus DNA test. A 30-month exclusive agreement, under which Cytyc markets the test to physicians for use with the ThinPrep system in exchange for promotion payments from Digene, is set to expire in June. TriPath says it is aiming for a third quarter FDA submission for use of SurePath with the HC2 test.

On May 8, TriPath reported overall first quarter sales of $11.1 mil., up 47% from the same period last year. SurePath and PrepStain reagents and disposables were up 76% from the first quarter of 2002, and accounted for 75% of total revenue, the firm notes.

A net loss of $2.4 mil. for the three months compares to a loss of $5.3 mil. for the same quarter last year, and the firm projects it will achieve profitability by early 2004. TriPath also is projecting total 2003 revenues of $50-$55 mil. compared with $37.5 mil. last year.

TriPath Expanded Pap Labeling Data Claim Closes Gap With Cytyc

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