Home cancer test seen aiding $2b. self-diagnostics market

Mode Diagnostics Ltd. wants to bring the medical laboratory into your bathroom – with a cellphone-size device that can detect signs of cancer right before your eyes.

The do-it-yourself test market, estimated at $2 billion to $3b. globally, is expanding 20 percent a year as new checks for colon and prostate cancer, HIV, chlamydia, stomach ulcer, sperm count and drug abuse take their place on pharmacy shelves alongside standards such as bloodsugar monitors for diabetics and pregnancy tests, according to Alan Hirzel, a London-based partner at consulting company Bain & Co.

Behind the growth is a shift in behavior as consumers become more aware of the signs and symptoms of disease and scour websites for tools to diagnose themselves. That trend may benefit Mode and boost shares of IP Group Plc, which owns 45.7% of the closely held Scottish company.

“Up until this point, medicine and health have been either treatment at the hospital or at the physician’s office,” Mode chief executive officer Paul J. Heaney said in an interview. “The third place is now the home.”

Mode expects to begin selling its colon-cancer test, the first in a series of do-it-yourself medical checks it is developing, directly to patients for about £25 ($38) through online retailers such as Amazon.com Inc. in the second half of the year, Heaney said. The company is awaiting European regulatory permission this year, he said.

Quick results

The test, which involves inserting a stool sample into a canister containing a solution, takes less than three minutes to produce results, while patients may have to wait weeks after mailing specimens to a laboratory, Heaney said. The company’s product is an improved digital version that requires fewer steps than older at-home colon tests. Patients who receive a positive result need to see their physician for confirmation, he said.

Heaney expects Mode will receive clearance, allowing the colon cancer test to be sold in European Union countries by the end of the year, followed by a decision by the FDA in 12 to 18 months. It is also working on adapting the device’s electrochemical biosensor for use in chlamydia and other diseases.

‘Huge appetite’

“There is a huge appetite for selfdiagnostics” from people who want discretion or are anxious about hereditary conditions, Hirzel said in an interview. “It has the potential to reduce the cost of care and make health care more effective.”

1st Health Products Ltd., a UK provider of self-diagnostic tests that was taken private last year in a management buyout from ValiRx Plc, sells 10,000 to 12,000 tests a year, about 16% through websites. Direct sales are growing about 15%, according to Patrick Kirby, a director and co-owner.

“Hospitals have realized they can’t do everything, and patients are using the Internet,” Kirby said in an interview. “It will grow if we get the right tests.”

1st Health Products’ top sellers are its tests for chlamydia, a biological marker that may indicate prostate cancer, urinary- tract infections, colon polyps that may signal cancer and commonly abused drugs including cocaine, amphetamines and cannabis, Kirby said. Prices range from £10 to £15, and most of the tests check for the presence of an antibody or antigen that causes a color change.

Corporate customers

Women buy half or more of the company’s tests, including its prostate-specific antigen screen for a cancer that only affects men, Kirby said. Customers for the drug screen include a large bank, which Kirby declined to identify; others are schools and parents of teens struggling with drug habits.

Mode may pitch products to insurers who want to reduce the cost of treating life-threatening illnesses discovered at a late stage, Heaney said. The company has hired a representative in China to establish a presence in that market, he said.

The prospect of more testing and the possibility of an uptick in false positive results – which suggest disease that is not ultimately supported by further testing – may scare away some payers, said analyst Vadim Alexandre of Daniel Stewart & Co. in London.

“You don’t want a whole bunch of tests on the market that are sending people with false positives to clinics,” Alexandre said.

Still, aging populations and spiraling medical costs are forcing governments to explore different ways of delivering health care, made possible with new technology, said Patrick Flochel, global head of Ernst & Young’s pharmaceutical practice.

“Governments have an interest in financing prevention,” he said, suggesting that devices like Mode’s may eventually be reimbursed.

Life-threatening diagnoses

Regulators require reliability of new screens to be comparable to old-style laboratory tests, testing companies said. Mode said its Measure device for colon cancer has 98% accuracy. 1st Health Products and closely held Care Diagnostica Produktions say their products’ sensitivity in picking up signs of disease is about 90%.

The biggest challenge for at-home tests in Europe is getting customers to pay for them when tests are offered at the doctors’ office for no additional charge, said Kim Scheuringer, chief executive officer of Moellersdorf, Austria-based Care Diagnostica, which sells at-home tests for conditions including colon cancer and chlamydia.

The companies have also had to address the impact that a positive result may have on a customer who receives a life-threatening diagnosis at home alone rather than in the presence of a doctor or a nurse who can counsel them. Home HIV tests are illegal in the UK under a 1992 law that was intended to ensure accuracy and provide support to patients, according to the Medicines and Healthcare products Regulatory Agency.

HIV test

The Food and Drug Administration approved the US’s first rapid athome saliva test for HIV, OraQuick by OraSure Technologies Inc. of Bethlehem, Pennsylvania, in July. The company agreed to provide a 24hour support hot line, and the FDA concluded the screen would identify 44,000 new cases of HIV and prevent 4,000 transmissions of the virus in its first year of use.

1st Health Products is seeking to raise $500,000 to $1 million to expand its range of tests and distribution of its products, Kirby said. His long-term goal is to develop the company over the next three to four years and then possibly sell it, he said.

Mode is mulling over proposals from prospective manufacturers and will need to raise about £5m. this year to get the product off the ground, Heaney said. It should quickly become profitable, he said. In addition to IP Group, which invests in new businesses based at UK universities, Mode’s other investors include the Scottish Enterprise, Parkwalk Advisors Ltd. and Kelvin Capital.

Heaney said a licensing deal or initial public offering may eventually occur, or the company could be sold.