VRG Technologies, Inc.

DIAGNOSIS IS POSITIVE FOR GENE PROBES

Gene probes offer the advantages of higher specificity, increased speed in identifying infectious diseases, greater accuracy, and the ability to obtain results from deteriorating samples. Although gene probe technology has been used for over 30 years, recent technological advances, particularly in the area of amplification and tagging methods, have allowed for more specificity and superior products and, consequently a significant expansion of the market, particularly at the research level.

According to a recently released Business Communications Company, Inc. report, C-198 Advances & Opportunities in DNA Testing and Gene Probes, recent technological advances in DNA testing, including DNA fingerprinting, clinical testing, and commercial applications will create excellent market opportunities. Despite the fact that only a few gene probe tests have been approved by the Food and Drug Administration (FDA) for clinical diagnostic testing or have been definitively recognized by courts as reliable (e.g., DNA fingerprinting), this market burgeoned to $158 million in sales in 1995 and will increase to $577 million in 2000, which represents an average annual growth rate of 30%.

BCC notes that the gene probe market is technology driven with both large and small companies competing in it. Often the technological discoveries of the smaller companies are acquired by larger companies, which have more marketing sophistication and resources to develop and promote the product.

Among the major applications for gene probe testing and DNA fingerprinting are infectious disease testing, cancer detection, forensic/paternity testing, genetic (inherited) disease testing, and numerous research applications. Diagnosis of infectious diseases in clinical and food specimens is the largest and most active market segment of gene probe testing, controlling an estimated 53% of all gene probe testing in 1996. The majority of new amplification methods are non-Polymerase Chain Reaction (PCR) methods because of the patent protection enjoyed by PCR. The testing for genetic disease is a very new market that offers great potential but has associated problems, among which are educating both medical professionals and patients, as well as ethical, privacy, and insurance issues. Only 800 doctors are certified in this specialty.

Each sector for gene probes will experience market growth. The market for diagnostic-infectious disease testing gene probes is projected to increase from $77 million in 1995 to $381 million in 2000, an AAGR of 38%. In addition, forensic testing will increase from $34 million in 1995 to $57 million in 2000, reflecting an AAGR of 11%, while all other applications, including cancer research, will rise from $48 million in 1995 to surpass $137 million in 2000, an AAGR of 23%.