China Medical Technologies (NSDQ: CMED) (中国医疗技术公司) reported that its SPR-based HPV-DNA chip has been approved by the SFDA. The fully automated machine is capable of identifying the 16 high-risk HPV subtypes and 8 low-risk variations, as well as viral load. Human papillomavirus is a common virus that can lead to warts as well as cervical cancer.
China Medical paid $345 million for rights to the Surface Plasmon Resonance [SPR] technology and its HPV-DNA chip in October 2008. It has estimated the eventual market for HPV testing in China at up to $500 million. The company also expects gross profit margins for the tests will be in the 80% range. According to China’s Ministry of Health, 70 million gynecological tests were performed in 2008.
China Medical has previously said it would supply the SPR machine to hospitals free of charge, and then make money from selling individual chips. This is the model it followed in its FISH system, which quickly became profitable for the company.
In addition to the Fluorescent in situ Hybridization [FISH] tests, China Medical also makes Enhanced Chemiluminescence Immunoassays [ECLIA]. The ECLIA reagent kits are marketed to small and mid-size hospitals through distributors. The FISH probes and SPR chips, which are made by its Beijing GP Medical Technologies subsidiary, are sold to large hospitals by a direct sales force.
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