Jeffery,
If investors didn't buy Dell computer stock a few years ago because they were afraid of competition from AST, Compaq or other manufactures, they would have missed out on a one year five bagger. If investors didn't buy Starbucks two years ago because they were afraid of competition from other coffee shops, they would have missed out on a two year three bagger. Dell and Starbucks are making money in spite of competition not only because their products are good, but because THE MARKET FOR THEM IS EXPANDING. The same will prove to be true for Quidel. Quidel will make lots of money from H.pylori sales in spite of competition because quidel's got a very usefully product and the H.pylori market will grow exponentially.
As Bob pointed out in his post #466, Quidel has the only CLIA waved H.pylori test on the market. This means that Quidel has the only test that can be used by approximately 28,000 health care providers that can only use CLIA waved tests. I don't know if Chemtrack's Hp Chek qualifies for CLIA waiver, but the press release doesn't mention anything about it being pursued. So as of now, Quidel's got an exclusive market of more than one third of the health care providers in the U.S.
Until tests such as Quidel's QuickVue One-Step H.pylori test became available, the traditional methods of detecting H.pylori included endoscopy, which adds approximately $600 to the cost of ulcer treatment and requires general anesthesia. I'm sure HMO's were not too crazy about spending $600 to test everyone with ulcer symptoms or gastritis, so they would simply prescribe antibiotic treatments without checking for H.pylori, or treat the ulcers with expensive, traditional therapy. But now with a simple, one-step, five minute test that can be administered in any doctor's office available, doctors can avoid indiscriminately prescribing treatments for about $10 a patient. Considering that about 5 million people see a doctor for ulcers a year and about one in ten (if my memory is correct) doctor's office visit is for gastritis, there's no doubt Quidel's going to be selling a lot of tests.
Again the key to Quidel's H.pylori market sales success will be a GOOD product in an EXPANDING market. There's no doubt in my mind the H.pylori market will expand very quickly, and, in such a market, Quidel will do quite well even with a little competition.
Mike |
