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			Cytyc's Impact on Women's Health Medical Development Group (MDG) Ralph E. Grabowski, panelist
			Contents

Medical Development Group (MDG) forum
Wednesday, October 4, 2006
6 - 8:15 PM
Silicon Valley Bank
One Newton Executive Park
2221 Washington Street
Newton Lower Falls, MA

Abstract

Cytyc is an incredible success; delivering 65% more disease detection for women with its radical innovation - the ThinPrep® Pap Test®, achieving $6.2 Billion market capitalization, and becoming a major power in women's health care. Yet few have heard of Cytyc's beginnings, of its mistakes, of how early Market Research, in advance of engineering, identified profound changes from the initial product concept, or of why and how it eventually triumphed.

Now the story can be told - by the person who, while the entrepreneur was still in his basement, performed the front-end Market Research, Competitive Intelligence (CI), and Market Macrocosm™ analysis which led to the formation of a new company and a new field.

Cytyc began with a failed entrepreneur, Stan Lapidus, who perceived that anecdotal shortages of trained, certified Cyto-Technologists to read Pap smear slides might be a significant market change creating a new opportunity for his machine vision technology.  Stan responded by investing more in Market Research than in engineering, a Marketing/Engineering Investment Ratio™ (M/E Ratio™) of 1.5.

Marketing investment not only led Cytyc to understand the real needs, slide preparation not slide reading, steering Cytyc to the right technology to meet those needs, but also compelled additional funding and led to the biggest advance in 50 years in preparation of PAP smears.

Cytyc not only responded to changes in the market, but Cytyc also precipitated changes which "the market" has had to respond to:

• 65% more disease detection for women!
• $6.2 Billion market capitalization which is still affecting Venture Capital investment for medical devices
• New legislation (Clinical Laboratory Improvement Amendments, Public Law 100-578) which, while initially aimed at "Pap mills," is affecting the entire medical diagnostics field
• A new "standard of care" - in some cases whole countries adopting it in one stroke.  The world is approaching 100% adoption of Cytyc's ThinPrep® test (abandonment of the 50-year old Pap smear test).
• A new medical procedure (liquid-based cell sample preparation for Pap smears)
• A new CPT code for paying for that new procedure
• Major changes in 3rd party reimbursement for the new (more expensive) test
• Cytyc officially declared a (legal) monopoly by the FTC

How much did Cytyc's entrepreneur invest in Marketing to anticipate, understand, manage, take advantage of, and even to create change?  How much Marketing investment did he wish for, need, and plan for?

		One CEO/entrepreneur, four companies Stan's first company, ITRAN, was a failure with a M/E Ratio™ of 0.05. Stan Lapidus learned from that failure.  He made a fundamental shift in management attention and investment commitment toward decisive, upstream Marketing with his next venture.  Cytyc became a super success, attaining a market value of $6.2 Billion. Although Cytyc enjoyed a M/E Ratio™ of 1.5, it wasn't enough.  Stan learned from that success and started his next enterprise, Exact Laboratories, with a M/E Ratio™ of 2.33. Even that was not enough.  Stan learned from that success and launched Helicos with a M/E Ratio™ of infinity!

Mr. Grabowski will be one of three panelists revealing the tools three companies used to anticipate, to respond to, and to capitalize on changing market conditions.