Why Cytyc Bought Novacept

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Roberta Speyer: Hello, this is Roberta Speyer for OBGYN.net and I am reporting from AAGL. Today I have the pleasure of having the Chief Operating Officer of Cytyc Corporation here, whom we all know from ThinPrep, to discuss with us the acquisition of Novacept, and the NovaSure technology. Dan, why are you entering the endometrial ablation wars? There must be a reason; please could you share it with us?

Dan Levangie, COO, Cytyc: Sure! As we think about Cytyc as a company, we began introducing the ThinPrep pap tests to the gynecology marketplace back in 1996. Since that time we have achieved great success with that product, and I have really invested considerable resources into medical education, educating the medical community as well as the public about the value of a better test. As we saw the ThinPrep begin to achieve a penetration level that began to slow down because of our market penetration, we started to look at new technologies that would add growth to the company, that we could bring value to in terms of medical education and patient education. We found Novacept and the NovaSure product and believe that that is a best-in-class technology that really is very complimentary to the structure of our company, and what we do so well.

Roberta Speyer: Why do you feel that this technology is going to be the one that ultimately rules the day? All of your competitors I am sure, at Boston Scientific and at Gynecare, feel that they have also made significant acquisitions of technology and that theirs will rule the day. What did you see as the key factors with the NovaSure procedure that made you think that this was the one to go for?

Dan Levangie, COO, Cytyc: Well, it really comes down to the performance of the product. Both the documented performance and FDA clinical trials showed that the performance of the NovaSure device exceeded that of the gold-standard rollerball by a wider margin than any of the other devices.

And the fact is that it is very simple to use, and it is very rapid. The time in the operating room is very short. I think physicians like the ease of use and short period of time that the procedure takes to administer.

Roberta Speyer: Do you think we are going to be seeing this done in an office-based setting any time in the future? I know that we are all aware that is widely done in Europe, but there has been a lot of reluctance to do office-based procedures in the U.S. for various reasons; none the least of which is that we are a much more litigious society. Do you see the ease of use of this possibly impacting that at all in the future?

Dan Levangie, COO, Cytyc: Well I certainly think the NovaSure device has a performance profile that would allow it to be used very successfully in a physician’s office, and in fact some physicians today perform NovaSure in their office. I think the other gating item for the whole field has been reimbursement. And the good news that we believe will bring some momentum to performing this procedure in the office is the fact that its CPT code has been assigned, and CMS has allocated reimbursement for in-office procedures beginning in January 2005. So I think you will see a lot more interest and some momentum towards moving the procedure to the office.

Roberta Speyer: Dan, thank you very much for taking the time to come over and talk to us about Cytyc and NovaSure, and good luck in the future with this procedure.

Dan Levangie, COO, Cytyc: Thanks very much.

Press Release: Five Studies Evaluating Cytyc's NovaSure System Presented at AAGL Meeting