Ventana Medical Systems, Inc. - Company Profile, Information, Business Description, History, Background Information on Ventana Medical Systems, Inc.

1910 East Innovation Park Drive
Tucson, Arizona 85737

Company Perspectives:

Ventana's mission is to provide Innovations in Science and Medicine t hat Improve the quality of Life. Our vision is to become the leading provider of solutions to the anatomical pathology laboratory so patie nt care can move beyond what is to what can be.

History of Ventana Medical Systems, Inc.

Ventana Medical Systems, Inc. is an international leader in the devel opment and manufacture of instrument-reagent systems used to automate the process of diagnostic testing of tissue samples on glass microsc ope slides. The company provides healthcare professionals with superi or tools that standardize and speed slide staining in clinical histol ogy, cytology, and drug discovery laboratories across the globe. Vent ana's pharma-services and research instruments are used to accelerate the discovery of new drug target systems and evaluate the safety of cancer therapies. The company's instruments are used by most of the t op 50 cancer research centers in the United States, including the May o Clinic, Johns Hopkins Hospital, and the Memorial Sloan-Kettering Ca ncer Center.

1985-91: Developing, Manufacturing, Marketing Automated Tissue-Tes ting Systems

Thomas M. Grogan, M.D., founded Immunodiagnostics Inc. in 1985. A pat hologist at the University of Arizona, Dr. Grogan became interested i n improving the practice of medicine by creating automated laboratory equipment to speed cancer diagnosis. Grogan first learned about immu nohistochemistry (IHC) in the 1970s while doing postgraduate work at Stanford University with a professor who pioneered the field. IHC is based on the discovery that a cancer cell can be characterized by bio chemical markers found within and on the cell's surface. Using specia l reagents and stains, the anatomic pathologist can identify these ma rkers to determine what feeds a particular form of cancer and what ty pes of chemotherapy can be used to treat it.

Grogan arrived at the University of Arizona in 1979. In the following years, as a practicing pathologist and professor of pathology, Groga n began to realize the necessity for automation in the anatomical pat hology laboratory. Automation of the tissue preparation and staining process would allow doctors to make diagnoses and present therapy opt ions to patients in a more timely manner than manual processing allow ed. However, he lacked business savvy. In 1984, after spending two ye ars looking for investors, he teamed up with Ross Humphreys, and the two launched Immunodiagnostics, Inc. in 1985.

From 1985 to 1995, Immunodiagnostics did not make a profit and operat ed solely on investments. Humphreys, who had experience heading up an investment firm, shepherded the fledgling business through its early years while Grogan developed the necessary technology. Later, Jim Da nehy took over as president and CEO of Immunodiagnostics, and the com pany secured $20 million in venture capital from investors. By 19 89, it had nine employees with plans to reach 300 in five years.

Ventana's first product was an instrument reagent system designed to automate and thereby standardize IHC staining. At the time, all IHC s taining was performed manually or via rudimentary automation, with ea ch test taking 40 to 50 manual steps and five to six hours to complet e. It was hard to compare results between institutions because there was no standard industry protocol. Moreover, manual testing resulted in a five to 10 percent failure rate.

Grogan became convinced that a machine could do the testing much fast er and more effectively. Looking back in a 2005 Tucson Citizen article, he explained, "I realized it needed to be done on every pat ient. We got obsessive. It should be done by an instrument like devel oping film. I looked at film developing technology." Ventana's first commercially marketed system, the Ventana 320, was launched in Novemb er 1991. The Ventana 320 could process 40 slides per run, eight runs per day, for a total of 320 slides. The instrument provided automatio n of a labor-intensive process thereby improving productivity and res ponse time of the anatomical laboratory. The whole process took three steps and was complete in an hour and 20 minutes. Instead of the 10 to 15 percent repeat rate for manual tests, the 320's repeat rate was 1 to 2 percent.

1992-2000: Growth and Product Diversification

In 1992, Immunodiagnostics was renamed Ventana Medical Systems, Inc. Using the Spanish word for "window," the new name reflected the compa ny's focus on developing integrated systems that provide a window on the biochemical characteristics of tumor cells. That year, Ventana be gan marketing its flagship device to community hospital-based anatomi cal pathology labs and commercial labs. Revenues for 1992 exceeded &# 36;1 million.

By the mid-1990s, Ventana had become a significant competitor in the anatomical pathology industry. From 1995 onward, the company launched at least one instrument per year and developed numerous diagnostic r eagents. After Ventana went public in 1996, hospitals, clinics, and r esearch labs quickly discovered the company and began to make use of its revolutionary and constantly improving technology. Ventana also p urchased its main competitor, California-based BioTek Solutions, for almost $19 million in 1997. BioTek's more research-oriented produ cts complemented Ventana's, which were more clinically focused.

Henry T. Pietraszek replaced Danehy as head of the company in 1997. P ietraszek had spent most of his professional career at Abbott Laborat ories: first at Abbott Diagnostics; then as president of Dainbot, Abb ott's diagnostics joint venture in Japan; and finally as president of its pharmaceutical joint venture, TAP Pharmaceuticals. Pietraszek le ft Abbott in 1994 to head Biostar, Inc., an early stage medical diagn ostics company. During the first two years of Pietraszek's leadership , Ventana more than doubled in size, reaching revenues of $47.7 m illion in 1998 and $69 million in 1999. Under Pietraszek, Ventana signed an agreement to acquire Biotechnology Tools, Inc. of Tucson, which gave the company a second point of entry in the histology marke t. It also purchased several of Oncor, Inc.'s products for cancer res earch and treatment, including an FDA-approved test to help doctors d ecide how aggressively to treat patients with breast cancer.

The year 2000 proved to be the springboard of a new era for Ventana w ith Christopher M. Gleeson taking charge of the company upon Pietrasz ek's departure. Gleeson came to Ventana from Bayer Diagnostics in 199 9. From 1993 to 1997, he had worked at Chiron Diagnostics and prior t o that, as the founder, owner, and director of Australian Diagnostics Corporation. Under Gleeson's direction, Ventana continued to expand along its traditional lines, acquiring the assets of Quantitative Dia gnostics Laboratories, Inc., a specialty lab that provided quantitati ve IHC services to pathologists and cancer research support in 2000. The company also received FDA approval for its Pathway HER-2/neu test in 2000, which aided in identifying patients eligible to rece ive Herceptin for metastatic breast cancer. Herceptin is a targeted t herapeutic developed by Genentech.

In 2001, the company refined its systems, culminating in the developm ent of its "baking through staining" technology available on the Benc hMark platform, which won the Medical Design Excellence award that ye ar. Ventana also created its Molecular Discovery Systems business to expand the company's revolutionary staining technology to research an d drug discovery laboratories. The MDS group provided a direct sales and marketing mechanism to place the Discovery instrument, launched i n 1999, and corresponding reagents in research and drug discovery lab oratories, in North America, Europe, and Japan. Also in 2001, the com pany moved to new headquarters in Oro Valley, Arizona.

By 2002, Ventana had successfully reached the international market it first began to seek out with proceeds from its initial public offeri ng in 1995. At this point, it employed 540 people worldwide and its s ystems were in place in 55 countries. By 2003, 29 percent of its reve nue came from international customers. At home, it began working with Pima Community College in Tucson to develop a degree program in hist ology, the microscopic study of tissue. Histotechnicians run anatomic al pathology laboratories. Ventana's involvement included providing g uest lecturers at the college, as well as onsite specialty classes an d internships for 18 students each year.

After a court ruled that Ventana had unintentionally infringed on com petitor CytoLogix's patent in late 2003, Ventana halted the sale of t he extremely successful BenchMark instrument, launched in 2000, and b egan revamping its product line. In its place, the company unveiled t he BenchMark XT instrument, a higher-capacity system. It also gained momentum on the development of the Symphony, the first fully-automate d instrument to perform primary or hematoxylin and Eosin (H&E) st aining and coverslipping on patient samples mounted on glass microsco pe slides. With the Symphony, Ventana, already a leading provider in the IHC or advanced staining market, which processes the 30 percent o f patient samples that require further examination for cancer or infe ctious disease, entered the front-end of the diagnostic process.

Looking ahead in 2004, Ventana angled to get in on the ground floor o f a new generation of drugs targeted at people with certain genetic t raits by automating the screening process for such medicines. "There' s a whole host of drugs coming down the pipeline from drug companies, and the indications are ... that there will be a tissue-based diagno stic required to admit these patients to therapies," Gleeson announce d in a 2004 Arizona Daily Star article. Moving toward this gro wth, the company increased its Tucson workforce by 10 percent. It als o began developing an integrated information management sys- tem that would link its instrument results to hospital information systems.

By 2005, the company expected to reap revenues of just under $200 million. More than 5,000 of its devices were used for cancer diagnos is in at least 1,500 hospitals and clinics in 55 countries. It contro lled a 60 percent market share in automated diagnostic and reagent sy stems. Promising further growth, that same year it also entered into a five-year global supply agreement with TriPath Imaging, Inc., which allowed Ventana to sell and distribute a branded version of TriPath' s interactive histology imaging system worldwide. "[W]e are a fractio n of what we are going to be," Gleeson announced in a 2005 Tucson Citizen article. "We want to be in every hospital in every city i n every country in the world."

Principal Subsidiaries: Ventana Medical Systems GmbH; Ventana Medical Systems Japan K.K., Ventana Medical Systems, Pty. Ltd.; Venta na Medical Systems, S.A.

Principal Competitors: Apogent Technologies Inc.; Beckman Coul ter, Inc.; Becton Dickinson & Company; BioGenex; DakoCutomation; Diagnostic Products Corporation; Digene; Ortho-Clinical Diagnostics.


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