Digene reacquires tests from Abbott

$2.5 million in stock bought back rights

February 02, 2002|By Julie Bell | Julie Bell,SUN STAFF

Digene Corp. said yesterday that it paid Abbott Laboratories $2.5 million in stock to reacquire the rights to diagnostic tests for two sexually transmitted diseases.

The Gaithersburg company said that getting back the rights to its chlamydia and gonorrhea tests eventually will allow it to "bundle" them with its HPV test for cervical cancer.

The move ultimately may increase both revenue for the company and convenience for women, allowing all three tests to be run from one patient sample.

For now, however, analysts and the company say they don't expect any noticeable impact on Digene's revenue or earnings.

"I don't think they were selling much through Abbott here in the United States," said Ronald Opel, an analyst at H.C. Wainright & Co. Inc.

Abbott has its own, competing tests for chlamydia and gonorrhea, lessening its zeal for promoting the Digene ones, analysts said.

Meanwhile, Digene has started its own U.S. sales force, which now numbers 10 people, to sell its HPV (human papillomavirus) test to large clinical reference laboratories. The same salespeople now will be able to sell the tests for sexually transmitted diseases.

Digene expects to start its own European sales force within the next 12 to 18 months, company spokesman Albert Fleury said.

The HPV test is approved in the United States as a way to double-check or clarify results from Pap smear tests.

Under an agreement with Digene, the HPV test also is promoted to labs and doctors offices by Cytec Corp. Opel said that company has about 57 percent of the Pap smear market and is gaining market share at a rate of up to 15 percent a year. Cytec encourages labs that use its Pap test to use Digene's HPV test if the initial test results need to be clarified.

Digene issued 87,873 new shares of common stock to Abbott at a price of $28.45 per share. It will recognize a related, one-time expense of $2.5 million in its fiscal third quarter. Digene's shares gained 14 cents yesterday to close at $24.78.

Analysts expect the company to be profitable next fiscal year.

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