China Medical Technologies is acquiring a human papillomavirus genotyping assay which it expects will generate up to $26.5 million in sales next year.

The Beijing firm said it will purchase the HPV-DNA biosensor chip and analysis platform technology for $345 million from Molecular Diagnostics Technologies. The deal is expected to close by January, and China Medical plans to start recording revenue by mid-year.

HPV tests currently on the market in China cannot satisfy the demand and medical needs of gynecologists in China, Chief Technology Officer Zhong Chen said during an Oct. 7 conference call. China Medical estimates that the market for the HPV chip in China could reach $700 million.

The company has not signaled plans to market the test outside China anytime soon. China Medical sells in vitro diagnostics and an ultrasound-based tumor treatment technology, mostly in China.

Chip IDs More HPV Types Than Qiagen Test - Firm

Some forms of HPV can cause cervical cancer. Screening women for high-risk subtypes of the virus as an adjunct to conventional Pap screening has increasingly become the standard clinical protocol for gynecologists.

Qiagen dominates both the U.S. and Chinese HPV testing market with its HC2 DNA test. The assay detects 13 high-risk HPV genetic subtypes and five low-risk subtypes to identify a women's risk for cervical cancer.

China Medical claims its newly acquired chip system is more advanced than Qiagen's product. According to the firm, the assay tests for 24 HPV genotypes, including 16 high-risk and eight low-risk subtypes. It can individually distinguish between subtypes in a way that HC2 can't, the firm says, which allows detection of higher-risk mixed infections.

In 2007, China Medical paid Molecular Diagnostics Technologies $136.8 million for a fluorescence in situ hybridization (FISH) platform for various screening applications including cervical cancer (¹ Also see "CMT Targets Cancer, Prenatal Testing Markets In China" - Medtech Insight, 12 February, 2007., p. 8).

Now the firm plans to use its existing sales force to co-market the HPV-DNA test and FISH assays as a bundled cervical cancer screening solution.

China Medical considered acquiring the HPV-DNA chip technology in 2007 but decided to wait until it was ready for launch, CEO Xiaodong Wu said.

The company cannot begin commercial advertisements for the HPV-DNA chip until China's State FDA approves it, but it can sell it to labs without the agency's approval, Wu explained.

Company Touts Surface Plasmon Resonance Edge

The chip is designed with surface plasmon resonance (SPR) technology, which has become an important tool in drug discovery and biological research but is not yet standard for clinical diagnostic assays. It measures the interaction of polarized light with biological samples attached to a gold chip. SPR does not require any chemical labels that can sometimes complicate bio-detection, the company says.

"It's label-free and [has] very high speed and high automation," Chen said. "It's very easy to operate."

China Medical plans to provide the SPR system platform free of charge to Chinese hospitals. The system is designed for exclusive use with Molecular Diagnostics Technologies' DNA chip, so the strategy is expected to accelerate assay sales.

Although China Medical is confident its product will be rapidly adopted by the market, the test will likely face competition in the next several years from other players including Hologic/Third Wave Technologies, Siemens, Abbott and Roche (² Also see "Hologic Gains HPV Test Technology In $580 Million Third Wave Purchase" - Medtech Insight, 16 June, 2008., p. 13).

The $345 million acquisition price will be paid through cash installments over the course of a year, China Medical said.

[Editor's note: Additional coverage of Asian markets is provided at ³ PharmAsia News , F-D-C Reports' Web site for Asian biotech, pharmaceutical and medical devicenews. ⁴ Sign up now for a no-risk, 30-day trial subscription at ⁵ www.pharmasianews.com .]

- David Filmore (d.filmore@elsevier.com)

China Medical Technologies Invests $345 Million In HPV Genotyping Chip

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