New Players Emerge In Shifting Market For Prostate Tests
BY PETER BENESH
INVESTOR'S BUSINESS DAILY
Posted 1/20/2006
For two decades, the PSA test has been the standard for diagnosing prostate cancer. But in 2004, the man widely credited for creating the test renounced it, sparking a medical furor.
Based on his own studies, Dr. Thomas Stamey of Stanford University said PSA testing detects enlarged prostates, not cancer.
"We need to recognize that PSA is no longer a marker for prostate cancer," he said.
PSA stands for protein specific antigen, a protein produced by the prostate. The PSA test measures the level of PSA in the blood. The more PSA, the greater the likelihood of prostate cancer. The problem: PSA tests push too many men into needless, painful and expensive biopsies.
Several biotechs seek a better indicator of prostate cancer. Canadian biotech DiagnoCure has developed a diagnostic method requiring only a urine sample. No blood test is required. Neither is a biopsy.
DiagnoCure's prostate cancer marker is a gene called PCA3. The company, which trades on the Toronto Stock Exchange, has partnered with San Diego-based Gen-Probe. (GPRO)
PCA3 is far better than a PSA, says Aaron Geist, analyst with investment bank Robert Baird & Co., which seeks Gen-Probe's business.
PCA3 has been 89% accurate in finding prostate cancer and 90% accurate in ruling it out, Geist says. Recent studies from various sources put the PSA at about 38% accuracy for finding prostate cancer and 38% for ruling it out.
This means PSA tests are raising false alarms. And those false alarms mean pain and suffering for men who endure biopsies to verify the PSA-based diagnosis, Geist says. Part of that pain is financial: A biopsy costs $2,000.
Also, there's no guarantee a biopsy will find cancer even in a cancerous prostate. The biopsy might take a sample from a noncancerous area of the prostate.
The procedure is so grim that up to 20% of men won't undergo it a second time, even if they have high PSA, Geist says.
Enter the PCA3.
Gen-Probe will make its PCA3 test available for laboratory work by April, says Chief Executive Hank Nordhoff. "By getting it into the hands of labs we'll get opinion leaders talking about it."
Full approval from the Food and Drug Administration will take more than two years, Nordhoff says. He expects a green light in Europe this year. The longer U.S. lead time is due to expensive and extensive clinical trials. The trials will study men with elevated PSA tests and negative biopsies.
If and when the PCA3 test hits the market, it'll cost more than today's PSA, which runs less than $2. A PCA3 test might cost $100.
That's the wrong way to compare the two, Nordhoff says. "Compare it not to the cost of a PSA, but to the cost of each biopsy at $2,000."
He figures insurers will pay the higher test price for greater accuracy and to avoid biopsy costs.
DiagnoCure Chief Executive Pierre Desy has estimated the potential worldwide market for the PCA3 test at more than $4 billion.
That's based on 45 million PSA tests a year being replaced by the $100 PCA3 tests.
Analyst Geist calculates that 2.5 million PSA tests result in biopsies each year in the U.S. alone. At $2,000 per biopsy, that's $5 billion.
Better diagnosis is only one part in the prostate cancer crusade. The other is better treatment.
Dendreon, a profitless Seattle-based biotech, has a drug called Provenge aimed at a 2007 launch, says Dr. Mitchell Gold, the firm's chief executive and himself a urologist. The drug has shown it not only extends lives, but also reduces deaths, he says.
Based on protein, Provenge stimulates the patient's immune system. After a three-year blind study of 500 patients, 34% of those on Provenge were alive compared with 11% on placebo. Dendreon has met with the FDA to discuss a date for approval of Provenge's first application.
"That (application) will be for men who have undergone some form of primary therapy and whose prostate cancer recurs," Gold said.
In a report, analyst Mark Monane of Needham & Co. wrote that Provenge not only improved survival, but also had almost no side effects. He notes that Provenge could offer a new treatment option over traditional chemotherapeutics.
Dendreon has a phase three trial under way to determine how Provenge affects men at an earlier stage of prostate cancer and who've had no treatment. Gold expects data by the middle of the year.
He won't speculate on Provenge's market potential, but does say treatment would cost up to $45,000 a year, based on the prices of other biological drugs.
Provenge has only one competitor in its class, Gold says — Taxotere from Sanofi-Aventis. (SNY) The FDA approved it for prostate cancer treatment in 2004.
Meanwhile, some observers warn against scrapping the PSA test just yet. One of them is Richard Atkins, a medical doctor and head of the National Prostate Cancer Coalition.
"In our view, regular PSA tests save lives," Atkins said.
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