Digene welcomes development of cervical cancer vaccine

Friday, Oct. 14, 2005

In a week of up-and-down news for Digene Corp., shares of the Gaithersburg company’s stock continued its strong, six-month ride. On Tuesday, Digene even made a list of five ‘‘stocks to watch” with Wall Street News Alerts.

The company also welcomed news of an effective cervical cancer vaccine developed by Merck & Co., anticipating it would boost sales of its own test for human papillomavirus, the leading cause of cervical cancer.

But also on Tuesday, company officials learned through news reports that Third Wave Technologies Inc. of Madison, Wis., is suing Digene for the right to sell its own HPV test.

A Digene spokeswoman said Wednesday that the suit had not yet been served and she couldn’t comment on it.

Digene markets the only federally approved test for high-risk types of HPV, which cause virtually all cases of cervical cancer. The test is approved for use along with the Pap test to screen women 30 and older, the group most at risk of developing cervical cancer. There are 13 strains of the virus that can lead to cervical cancer.

Digene also announced Tuesday that DCL Medical Laboratories, a women’s health company in Indianapolis, will be its latest co-marketing partner in promoting the benefits of HPV testing to clinicians and patients. DCL will help distribute the Digene HPV test for cervical cancer screening, and educate its customers on the test’s use.

The BellWether Report, a 20,000-member Internet service for investors, reported this week that Digene’s stock trading was up significantly. The report concluded that corporate developments over the summer led to a significant ‘‘positive correction” after the company had lowered its performance expectations entering the calendar year. Then, for the quarter ended March 31, revenues increased 26 percent over the prior-year quarter, including a 39 percent boost in U.S. revenues for its HPV test.

Also on analysts’ radar screens this week was how Digene may be affected by news late last week that Merck of Whitehouse Station, N.J., had successfully tested a vaccine, Gardasil, for preventing cervical cancer. Merck reported that its experimental vaccine was 100 percent effective, in the short term, at blocking the disease and the lesions that were likely to turn cancerous. The vaccine blocks infection by two sexually transmitted viruses that together cause about 70 percent of cervical cancers.

Bellwether analyst Geraldine Mebesius said the vaccine, if approved next year, may give Digene competition, but cautioned that researchers have not yet learned how long the vaccine will last.

Bruce Cranna, senior analyst with Leerink Swann & Co., said news of the vaccine’s success will ‘‘likely help Digene. I think it means that sales of the their test should go up.”

‘‘It is our belief that this means there is a lot of positive publicity or awareness that will help Digene,” Cranna said. Even if every woman is vaccinated, screening would still be necessary, he said. ‘‘There could be a whole other market of pre-vaccination screening with their test.”

Pamela Rasmussen, Digene’s vice president for corporate communications, called the vaccine results ‘‘very good news.”

‘‘This will be synergistic with the HPV test,” she said. ‘‘There should be complete education and it will indeed be very important to have the vaccine.”

Rasmussen is concerned, however, that the vaccine covers only two HPV strains. She said Digene officials would like to see a vaccine that covers all 13 carcinogenic strains.

Rasmussen observed that the vaccine ‘‘is not a panacea for two other reasons. Time is one: How long will it last? And, secondly, it will not help people already exposed.”

Among 10,559 sexually active women ages 16 to 26 who received the vaccine in the Merck trial, none developed cervical cancer or pre-cancerous lesions over an average two years of follow-up periods.

For women who already have cervical cancer, a vaccine called Lovaxin C, is under development and entering clinical trials at Advaxis Corp. of Princeton, N.J.

Advaxis issued a statement this week predicting that if Lovaxin C clears regulatory hurdles and clinical trials, it could prevent cervical cancer in women not yet infected by HPV and it may also be possible to use such a therapeutic vaccine to cure existing cancer.

However, Advaxis is beginning phase 1 and 2 clinical trials with its vaccine. Merck has passed phase 3 trials and will seek Food and Drug Administration approval as soon as the end of this year, say analysts.

According to the Centers for Disease Control and Prevention in Atlanta, human papillomavirus is a member of a family of viruses that can cause abnormal tissue growth — for example, genital warts — and other changes to cells. Many millions of new genital HPV infections occur each year in the United States and most are not noticed, reports the National Cancer Institute in Bethesda. About 14,000 cases of cervical cancer are diagnosed each year.