| The health care industry is intensely competitive, and the Company expects
it to remain so for the foreseeable future. This level of competition is
reinforced at each stage of the IVD business: research, analyte developers,
instrumentation/system companies, distributors, hospital/clinical laboratories
and healthcare providers. Currently the majority of diagnostic tests are performed in hospital and clinical laboratories. The impetus to move these tests to new, POC testing, or to shift the mix between a hospital and clinical site, will be fiercely resisted by these laboratories. There can be no assurance that the Company's new products that require a change in testing site (POC, home testing) will be able to compete against these entrenched competitors. The diagnostic industry is currently dominated by large, automated systems
suppliers with a broad product offering and significant market presence,
including Abbott Laboratories, Roche Diagnostic Systems, Inc. and Ortho
Clinical Diagnostics, Inc. These companies are vigorously competing for market position, which results in strong price pressure and increasing consolidation through mergers. These competitors all have substantially greater financial resources, technical and research facilities, marketing and sales departments, distribution and service organizations than the Company. In addition, these competitors have broader product lines, established brand positions and stronger customer relationships than the Company. While the Company's strategy of partnering with these companies to incorporate the Company's products on automated instruments presently utilizes these dominant market positions to the Company's advantage, there can be no assurance that these competitors will not be able to improve the performance of their existing product offerings to effectively compete, or will not succeed in developing new technology and products that will make the Company's products obsolete. In addition, there can be no assurance that these competitors will not be able to use their financial and market presence to limit or interfere with the ability of the Company to sell its products. The Company believes that its strong competitive position in these cancer areas is due to the IVD tests' proven historic product performance and the cumulative supporting clinical utility data. Many peer-reviewed articles have been published on the performance of the antibodies, and competitors would
face a significant barrier to entering into attempting to replicate the supporting data available regarding the Company's IVD tests. In addition, clinicians are resistant to adopt a new baseline standard for a diagnostic test, creating a further barrier to competitive entry. The diagnostics industry is also characterized by a large number of small, technology-based enterprises that are seeking to develop and exploit novel technologies. While many of these companies have fewer financial and technical resources than the Company, and do not have established positions in the market, the sheer number of them and the broad array of technologies that they are attempting to develop present a potential threat. The Company cannot assure that these companies will not be able to develop breakthrough technology whose performance capabilities will make the Company's products obsolete. |