Digene's Pap Test May Get an FDA Boost
Digene (DIGE ), a biotech whose lead product is an FDA-approved DNA Pap test for cervical cancer, has been on a tear: Its stock has jumped from 7 a share in early December to 16 on Feb. 26. Digene's product is approved only for use in cases where the more common cervical cancer test, the Pap smear, produces inconclusive results. A Pap smear tests tissue cells to detect any sign of cancer. Digene's DNA pap is more specific. It checks for human Papilloma virus, or HPV, which is associated with over 99% of cervical cancers. Now Digene may get FDA approval for expanded use as a primary screening for the disease. Ronald Opel of investment firm H.C. Wainwright expects approval in six weeks. Analyst David Lewis of Thomas Weisel Partners, who rates the stock a buy, says that if approved, Digene's revenues could jump 54% in 2004 on just a 4.5% share of the $400 million Pap test market. Weisel has done banking for Digene. Opel says Digene's stock could double again in six months as sales accelerate. He expects Digene to be in the black in 2004, earning 38 cents a share, and $1 in 2005.
By Gene G. Marcial