Ralph E. Grabowski - marketingVP - fact-gathering, analytical Marketing to steer the enterprise

   

Home

Potential clients

My work

Client results

Research

Published papers

Guest lectures

They said it!

Resources

Contact

   

Results and payback
Financial, strategic, and human results

  • startup to acquisition for $6.2 Billion
  • Market Research steers engineering to the right product
  • 65% more disease detection for women
  • False Positive and False Negative (error rates) cut by a factor of 4
  • multi-million dollar VC financing
  • approaching 100% world market share
  • FTC declares Cytyc a monopoly

The entrepreneur, Stan Lapidus, realized his entrepreneurial dream and became a multi-millionaire.

I supplied, identified, and interviewed enough customers and industry gurus to validate the business opportunity and to motivate multi-million dollar first-round Venture Capital (VC) funding for $3,600,000.

"Deadly accurate!" was Stan's independent appraisal of the customer interviews.

I developed payback evidence to confirm the market validation and to demonstrate that Cytyc could command high prices.  I then went beyond the assignment by identifying and cultivating the first major prospective customers.

Cytyc, one of the largest VC financed startups on the East Coast, raised $177,400,000.

Cytyc financing
$ 3,600,000 first round VC startup
$ 40,000,000 other VC rounds
$ 48,000,000 IPO
$ 85,800,000 secondary public offering

$ 177,400,000 financing

Cytyc went public with an IPO in 1996, achieving a market capitalization of $3.65 Billion in 2001.  The US Federal Trade Commission (FTC) declared Cytyc a (legal) monopoly in 2002.  Hologic is purchasing Cytyc for $6.2 Billion in 2007.  Cytyc is on their way to achieving 100% market share in the world.

 

Testimony before Congress results in new legislation

My market research was used in testimony before Congress and resulted in new legislation that will speed market demand; the Clinical Laboratory Improvement Amendments (CLIA), Public Law 100-578.  CLIA led to a focus on quality of the complete Pap screening system, and an emphasis on increased disease detection.

CLIA - Clinical Laboratory Improvement Amendments
    US Food and Drug Administration (FDA) web site
Public Law 100-578  - PDF, 13 pages, 0.6 MB

The Wall Street Journal writer won the Pulitzer Prize for his exposé.  Cytyc received the benefit of a new law.

 

Marketing steers Engineering to the right product

The initial product idea was machine vision; a TV camera through the microscope lens, coupled to a special computer, which would examine 250,000 cells in two minutes and subject each cell to perhaps forty separate medical criterion in software.  The machine vision would pre-screen every slide (without humans) to select the few "worst" cells from each slide for presentation to a human Cyto-Technologist who would perform a medical determination.  The intent was to replace the (tedious, error-prone) data processing of human eyeballs with (tireless, consistent) machine data processing.

Early market research, in advance of engineering, identified profound changes from the initial product concept.  Upstream market research identified the real customer problem; data gathering and data preparation of the Pap smear slide, before any human data processing.  A patented slide prep system emerged, the ThinPrep® System, which adds to product differentiation and simplifies Pap screening.  The ThinPrep® Pap Test® makes Pap smears by an automated slide preparation unit, the ThinPrep® 2000 Processor, that produces uniform thin-layer slides, virtually free of obscuring artifacts such as blood, mucous, and inflammation.

With marketing guidance, engineering designed the right product, and captured the business opportunity.

The Food and Drug Administration (FDA) approved the ThinPrep® Pap Test® as a replacement for the conventional Pap smear, and approved labeling allowing Cytyc to claim that the ThinPrep® Pap Test® is "significantly more effective than the conventional Pap smear."



Conventional Pap Smear ThinPrep®
conventional Pap smear ThinPrep® Pap Test®
Cell presentation - pictured is a portion of one field of view as a Cyto-Technologist might see it looking through a microscope.

The conventional Pap smear has False Negative (FN) rates higher than 50%. 

A human Pap reader must view about two thousand separate fields under a microscope, examining perhaps 250,000 cells to attempt to find a few cells (as little as five or six) that have slightly misshapen nuclei. 

With the conventional Pap smear method, cells can be obscured by blood, mucus, and inflammation.  Furthermore, the three-dimensional (3D) character of overlapping cells in lumps and clumps makes the examination a daunting challenge.

Accurate interpretation of up to 40% of conventional Pap smears are compromised by the presence of blood, mucous, obscuring inflammation, scant cellular material and air-drying artifact.

Both views contain abnormal cell nuclei.  However, the abnormal cells on the right are considerably easier to see.

Clinical trials demonstrated that the ThinPrep® Pap Test® increases disease detection 65%.

Specifically, the clinical trials showed Cytyc's ThinPrep® System detected 65% more cancerous or precancerous samples when used in screening centers (where 95% of all Pap smears are processed) compared to the conventional Pap smear.

The ThinPrep® Pap Test® method preserves the cells and minimizes cell overlap, blood, mucus, and inflammation.  It creates a mono-layer, a layer one cell thick, with no overlapping cells.

False Positive and False Negative (error rates) were cut by a factor of 4

Conventional Slides ThinPrep® Slides
Conventional PAP smear slides - not uniform Cytyc ThinPrep - uniform slides

The conventional Pap smear is made by hand; the physician "smears" the sampling device across a microscope slide to spread a layer of cells.  Each physician may do it differently, leading to some slides with thick lumps and clumps, and some slides with clear areas of no cells.

The conventional Pap smear has False Negative rates higher than 50%.  

Up to 90% of those False Negatives are due to limitations of sampling or slide preparation.

The National Cancer Institute estimates that about 3.5 million Pap smears are found to be inconclusive each year in the US which often lead to unnecessary colposcopy, biopsy and office visits.  The average cost of the standard management of such cases is about $1,200 per case.  The NCI estimates the cost to the US health care system at about $3.6 billion each year.

ThinPrep® slide-to-slide uniformity.

The ThinPrep® Pap Test® makes Pap smear slides by an automated slide preparation unit, the ThinPrep® 2000 Processor, that produces uniform thin-layer slides, a one-cell thick monolayer, virtually free of obscuring artifacts such as blood, mucous, and inflammation.

By reducing the number of sub-optimal or "satisfactory but limited by" (SBLB) slides by as much as 50%, the number of return visits and repeat Pap smears is diminished.

The significant improvement in specimen quality will substantially reduce costs and patient anxiety associated with re-screening and unnecessary follow-up testing.

 


Benefits Beneficiary

65% more
disease
detection
For women, catch disease sooner and live.  Cervical cancer is 100% treatable if caught early, but inevitably fatal if not.  About one-third of the 15,000 women diagnosed with cervical cancer annually still die because the cancer was detected too late.

Better medicine for the physician and pathologist.

Less expensive to treat for the 3rd party payer since disease will be caught at an earlier stage.


sub-optimal slides reduced 50% For women, reduced anxiety because of less re-screening and unnecessary follow-up testing.

Saves re-screening expense for the 3rd party payer.


reimbursement Clinical Labs make money

Before Cytyc, many Clinical Laboratories used Pap smear screening as a loss leader to attract other business such as biopsies.  They would offer Pap screening at below cost.  Cytyc's ThinPrep® Pap Test® merits a new medical procedure designation (CPT Code) and a higher reimbursement rate.  Thus clinical labs can now make money on Pap smear screening.


 

Cytyc was acquired by Hologic in 2007 for $6.2 Billion.

 

 
 
Site Map   Download   Copyright© 1996-2017   Ralph E. Grabowski