In Vivo is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Blood Brothers: Chiron and Gen-Probe

Executive Summary

The FDA's approval of Procleix HIV-1/ HCV combination assays all but cemented Chiron and Gen-Probe's dominance of DNA-based screening of the US blood supply. The approval changes the economics of providing HIV/ HCV screening to blood banks. The blood banks had been using Procleix or two separate tests supplied by Roche under IND status, paying at cost. Now, they have to pay commercial prices for Procleix. The hike is stretching budgets, but, for a variety of reasons, still more than 70% of US blood banks use Procleix, which is a combination of two assays on one sample.

You may also be interested in...



Chiron at the Crossroads

Three years into a new CEO's regime, Chiron is trying to forge a unique compromise between research and commercial focus and the stability which comes from a diversified business. But Chiron is at a crossroads: its earnings growth, boosted significantly by a now complete cost-reduction program, doesn't look sustainable without major new products. And those Chiron does not appear to have. Moreover, its major shareholder, Novartis, has an option to buy the company and top management fears they will should the stock show significant signs of weakness, brought on, perhaps, by investments (and consequent earnings reductions) in potential high-growth areas. In effect, Chiron managers are afraid to invest significantly for fear of what Novartis will do should the stock price fall. Moreover, to some degree, Chiron is caught by its business diversity: it can't focus its spending on any one area, particularly biopharmaceuticals, without starving its other businesses--but without a significant increase in R&D spending, particularly in the drug unit, observers don't see how Chiron, which has been uniquely unsuccessful with its pipeline projects, can drive the long-term earnings growth it needs.

Chiron's Blood Screening Gambit: Checkmate or Stalemate?

Chiron's HCV patents have given it enormous clout over the blood banking market. HCV screening is essential in blood testing. Chiron's leverage makes blood screening a cash cow that is protected from competition in a guaranteed market for at least another six years. Plus, Chiron has effective control over access to the only new and growing portion of the market--NAT, a DNA-based probe methodology that can be used for earlier detection of hepatitis and retrovirus. The question for Chrion is not whether it can benefit from the opportunity in NAT, but how to maximize its returns to generate revenues it can use to fund its long-term gene therapy and genomics programs.

Gen-Probe's DNA Play

Gen-Probe is one of the few successful players in the emerging field of DNA probes. Long a niche player, it is teaming up with bioMerieux and Chiron to tackle bigger, more complex markets in blood banking and viral and cancer diagnostics. To do this, it needs to acquire a new set of skills.

Related Content

Topics

Related Companies

Related Deals

UsernamePublicRestriction

Register

IV001781

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel