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MDx Finding Traction in European Labs, Leerink Swann Says

NEW YORK (GenomeWeb News) – A Leerink Swann survey of diagnostic laboratories in Europe found that molecular-based testing continues to find traction with continued penetration strongest in methicillin-resistant Staphylococcus aureus testing and human papillomavirus testing.

In the survey of 21 labs conducted between June 16 and July 12, the investment bank found that while overall volume growth at the labs were "modest at best," the adoption of molecular diagnostics continued in several product categories. And although Europe makes up about only one-quarter of total revenues for many diagnostic companies, "we think the trends [are] worth watching, especially since new tests/instruments are often available in Europe earlier than in the" US, Leerink Swann analyst Dan Leonard said in a report.

His firm's survey augments another survey released last week by investment firm Mizuho Securities that also found strong uptake of molecular diagnostics, especially in the prenatal and women's health markets.

The Leerink Swann survey found particular interest in molecular diagnostics for two diseases, MRSA and HPV.

In all, 14 labs currently provide MRSA testing and said that they plan to expand their screening program during the next two years. On average, respondents screen 21.7 percent of hospital admissions for MRSA and in two years plan to screen 26.1 percent of admissions, which would translate to a 10 percent increase on a compounded annual growth rate, assuming admission rates are flat.

Eight of the 14 labs currently provide molecular-based MRSA testing methods, and of the six that don't, three said they plan to do so within the next two years. All three also said they plan to use a Cepheid test. The company's core MRSA test is its Xpert MRSA assay.

Additionally, 10 respondents said they currently conduct HPV testing. During the next year, volumes for HPV testing among the respondents are expected to grow 2.3 percent, "seemingly modest" Leonard said, but healthy compared to tests for other sexually transmitted diseases such as chlamydia/gonorrhea and trichomoniasis.

The survey found that market share in HPV testing was spread among Qiagen, Roche, and Abbott, and that labs do not expect to switch vendors during the next year. Volume increase, along with a minor drop in average pricing for tests in Europe of .8 percent, should translate to a small incremental positive for Qiagen, Leonard said.

Leerink Swann also found some interest in multiplexed testing for gastrointestinal pathogens. Of 12 labs that provide testing for Clostridium difficile, two use multiplexed molecular testing for gastrointestinal pathogens and three plan to use such testing in the next year, a potential benefit for Luminex.

The adoption of molecular diagnostics in C. difficile, chlamydia, and trichomoniasis, however, will not be as robust, according to the survey. Only two if 12 labs that do C. difficile testing use molecular methods as a first line test. Four labs use molecular diagnostics to confirm positive results from methods. Additionally, only one lab said it plans to adopt molecular testing for C. difficile in the next year, while the rest said they have no plans to increase molecular-based C. difficile testing.

"[T]hese results are consistent with our view that adoption of molecular C. diff testing will be slow-going in Europe, and ultimately we'd only expect [about] 20 percent of the European market to adopt molecular C. diff as a first line test," Leonard said.

Meanwhile, the average volume of chlamydia testing is expected to grow only .7 percent in the next year among 15 respondents who currently conduct such testing, and 11 respondents who provide trichomonas testing said they do not expect testing volume to increase in the next 12 months.

In his report, Leonard noted the flat growth rate of trich testing depite Gen-Probe's efforts promotional efforts. He said this was not surprising given that demand for trich testing is physician-driven rather than lab-driven and Gen-Probe does not have a physician sales force.

Gen-Probe is in the process of being acquired by Hologic, and during an investor conference in June Hologic CFO Glenn Muir highlighted his firm's physician sales force as a positive that would expand Gen-Probe's footprint.

In addition to a positive trend toward molecular diagnostics, the survey also found that lab budgets on average had increased 1 percent from a year ago. Respondents said they expect their budgets to stay flat during the coming year, suggesting that "the worst may be behind us in the European diagnostics market," Leonard said.