Cancer tests lift Digene revenue by 49 percent

Second-quarter net loss decreases 32 percent

February 07, 2002|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Digene Corp., a maker of medical diagnostic tests, said yesterday that strong sales of its cervical cancer tests drove its quarterly revenue up 49 percent as its net loss decreased 32 percent.

Revenue climbed $11.6 million in the Gaithersburg company's fiscal second quarter, which ended Dec. 31, compared with $7.8 million in the year-earlier period. Digene posted a net loss of $1.1 million, or 6 cents per share for the quarter, meeting analysts' estimates. Digene reported a $1.6 million loss for the year-earlier quarter.

In a conference call with analysts yesterday, Charles M. Fleischman, Digene's president, said the company had "solid results in all major territories," with sales of its cervical cancer tests up 118 percent to $8.6 million.

Sales in the U.S. market continued to be particularly strong, climbing 84 percent in the second quarter of fiscal 2001, he said.

Fleischman said the company expects to break even in the final quarter this year and turn a profit in the first quarter of fiscal 2003.

Digene's revenue in the six-month period was $22 million, up 47 percent from $14.9 million a year earlier. Its net loss was $1.6 million, or 10 cents a share, compared with $3.5 million, or 21 cents a share, in the first six months of fiscal 2001.

"I thought they were right on," said Bruce Cranna, a senior analyst with ABN Amro Bank N.V. in Boston. "Certainly the sales were there, and the sales growth was there, and the earnings were what was expected. From my perspective, it was a really solid quarter. It looks pretty good going forward."

Increased physician knowledge of the product fueled Digene's sale of its gene-based test for detecting the virus that causes cervical cancer , said Evan Jones, Digene's chairman and chief executive.

The company has a co-marketing agreement with Cytyc Corp. of Boxborough, Mass., which sells a Pap smear test off of which Digene's test can be run.

The test "continues to gain momentum," Jones told analysts yesterday. More than 30 Blue Cross Blue Shield plans, which cover 55 million people, now reimburse for the test, he said.

Digene's shares closed at $21.56 yesterday, down $1.89.

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