Expert Opinion

Feb. 1, 2003
Talking with S. Wayne KayQuidel Corp.s CEO shares his viewsCelia Stevens: As the leader of a fast-growing company, what in your view are the key trends that will most affect the future of the clinical diagnostics industry?
S. Wayne Kay: There are several trends we watch closely as we strategically plan for the future. First, it is clear that the clinical diagnostics industry is moving from centralized laboratory diagnostics to more at-patient care or near-patient care venues. This makes our product focus rapid point-of-care (POC) testing at the physicians office a very dynamic place to be. Increasingly, patients are becoming more knowledgeable and concerned about their healthcare and are becoming self-reliant in dealing with common health problems. Physicians are utilizing rapid POC tests as an aid in the diagnosis of diseases and conditions, while the patient is in the office as a test-and-treat model.Another key trend is the aging population and its own desire to manage chronic illnesses. This aging group wants to know and more fully understand its health challenges. This profile, coupled with the medical information so readily available electronically, forces marketers to pay special attention to education strategies. We aim to develop education programs to increase awareness of our diagnostic tests to the three critical decision makers regarding family healthcare: providers, payers and patients.Stevens: What impact will genomics and proteomics have on your future product offerings?Kay: Quidel expects rapidly evolving genomic and proteomic discoveries to significantly expand the spectrum of diagnostic and monitoring opportunities that address important chronic and acute disease states. Stevens: When Quidel began operations in 1979, its first product launches were in the area of reproductive and womens health, such as dipstick-based pregnancy tests. Quidels product introductions in 2002 included a urine chemistry analyzer and a point-of-care ultrasonometer to aid in the diagnosis of osteoporosis. Judging from that, Quidel appears to be moving away from its original focus of reproductive and womens health. Why is that, and if so, in which direction is Quidel now heading?Kay: I dont think we are moving away from womens health at all we have just expanded our portfolio to include offerings that can serve women and those she cares about older parents and children. Did you know that women make the majority of the healthcare decisions for these groups?The Quidel Mission statement remains, Helping women and their families live healthy lives. As we strategically expanded our portfolio, we wanted to further support this mission.Urinalysis is the number one test performed in physicians offices, including the OB/GYN, and offered Quidel a product that served all patient populations and a variety of clinical settings. The ultrasonometer, called QUS-2, is an instrument that measures bone density in the heel, and is a natural line extension to serve the osteoporosis area. In fact, placements of this lightweight and portable instrument are most prevalent in the OB/GYN clinics and wellness centers. Finally, our QuickVue Influenza test has achieved 50.5 percent market share, based on unit sales, number one in the first three seasons, and provides fast and easy-to-read results for patients visiting the family practice or pediatric offices. The physician can look to Quidel as a leader in providing a complete wellness and disease management program that serves the entire family.Stevens: Do you believe demand will heighten for point-of-care testing products in the next five years? Why?Kay: Yes, I do. The movement towards decentralization of the laboratory and the need for more accessible diagnostic testing where the physician can test and treat will contribute to this demand curve. This speed of service fast turnaround times combined with a medically important need to diagnose and treat as quickly as possible, makes our mission exciting. Another important patient example is POC testing, which enables motivated patients to manage their own health status, to take back control many thought was lost upon diagnosis of a chronic disease. Diabetes management is a good example of this trend. Diagnostic tests provide information, so in a way Quidel is in the information business. As such, we have a responsibility to respond quickly and accurately. Thats why our investment in new platforms like our LTF technology is so important.Stevens: What is LTF?Kay: LTF or Layered Thin Film is a proprietary platform only available from Quidel. It is as small and thin as a credit card, yet extremely precise with fast results some within two minutes. LTF is not only very sensitive, it is also simple to use and offers the healthcare professional a tool to rapidly test patients without the complicated steps found even in some current lateral flow technology. Our QuickVue Advance tests for infectious vaginitis, introduced in late 2002, are the first available on LTF.Stevens: How has the threat of bioterrorism affected Quidels strategic planning in infectious disease testing?Kay: We remain vigilant through key advisors in the public policy sector as to how we can defend against bioterrorism through the use of our diagnostics tests.Stevens: How has the current shortage of clinical laboratory professionals affected Quidels planning? How does your company plan to address this issue over the next five years?Kay: One of our main strengths is the ability to create easy-to-use tests that are CLIA-waived tests that any healthcare professional, not just the clinical lab professional, can utilize. This is a core competency for Quidel. We are very sensitive to maintaining quality, while increasing access by developing and marketing tests that meet only the highest quality standards and also achieve results quickly and efficiently. Stevens: What does the trend toward direct-access testing mean to
Kay: OTC applications may be of benefit to cost containment in the healthcare system providing the diagnostics made available to the consumer are of high sensitivity and that therapy is prescribed and monitored by a healthcare professional. This is why you will see companies like Quidel strive to develop simple, quantitative tests, in addition to the qualitative tests now available.Stevens: How important is online interaction with your customers, and do you expect that interaction to expand in the future?Kay: I believe manufacturers like Quidel will become more customer-oriented, with more online education programs, better-informed sales and technical representatives and faster responses to customer problems. We realize that it is easier to keep a satisfied customer than to find a new one. I know that our efforts to increase customer interaction will only increase.Stevens: What new types of technologies do you foresee will become important in the future In Vitro Diagnostics market?Kay: More specific tools for targeting infectious diseases, chronic diseases and monitoring tools will drive new product development opportunities. Technologically, I see electronics entering the rapid test market and this will assist providers with a more quantitative vehicle at POC. We also foresee a development of very disposable platforms tests that can be run at home or in physicians offices to check for various levels of chemicals in the body that can alert patients to the status of their healthcare or to monitor therapy, as I have mentioned.Stevens: Which areas do you believe will offer prime growth prospects for Quidel in the next five years?Kay: Our goal is to match the trends in healthcare to our strategic plan. And so we look forward to our growth coming from several areas.The first priority is to maintain and expand market share in the professional testing market. We see tremendous growth for us in our QuickVue Influenza product line, where we are the first mover with a CLIA-waived test in the physicians office and are now developing aggressive programs to attract the acute care segment.We also see tremendous growth opportunities in the international markets. We have grown our business from just over 20 percent of total business to 32 percent this year of our business being sold internationally. Through our relationship with Sumitomo in Japan, our influenza test is now the brand leader. We will also be introducing the QuickVue Dipstick Strep A test in Japan this coming season. Quidel has expanded our knowledge of instrumentation though the marketing of the UrinQuick Urine Chemistry Analyzer, as well as the QUS-2 Calcaneal Ultrasonometer, as mentioned earlier. As we continue to develop our competencies in instrumentation, we will be ready to respond to the POC marketplace with high performance, quantitative disposable tests run on a small, cost-effective instrument platform.Our LTF technology platform will offer the advantage of proprietary, differentiated tests that offer cost-effective, accurate results for the patient and physician. Quidel intends to aggressively utilize its leadership position in POC testing and apply its LTF technology to meet these opportunities with internal development and by forging critical strategic alliances with carefully selected pharmaceutical and biotechnology partners.We continue to seek pathways for direct-to-the-patient educational programs with in-office brochures on various disease states, as well as through our Internet site. This is always complemented with education of the physician and payer groups, as well. As we work with key strategic partners to capitalize on the OTC market, we are hopeful to have some presence there as we move forward.Needless to say, I am excited about Quidels future, but also about the whole field of rapid diagnostics. It brings positive results to peoples lives; this is something in which Quidel enjoys taking a leadership role.Reference:Healthcare Products Information Services (HPIS), National Trend Reports, Unit Trend Report, Quarter 3, 2002.S. Wayne Kay joined Quidel Corp. as president and chief operating officer in January 2001 and was elected chief executive officer in August 2001. He has held a number of leadership roles in the healthcare industry, including serving as senior vice president of; as president and chief executive officer of the Health Industry Distributors Association; as president and chief executive officer of Enzymatics, Inc.; and as president of SmithKline Diagnostics, a subsidiary of SmithKline Beecham. He earned his B.S. in business administration from the University of San Francisco and his M.B.A. from Pepperdine University.                                                                       
January 2003: Vol. 35, No. 2
© 2003 Nelson Publishing, Inc. All rights reserved.