DeciBio Insights

Supplying the COVID Demand — How Dx Behemoths and Tele-Diagnostics Entrants Aim to Close the Gap

 

As more COVID-19 diagnostics win FDA emergency use authorization, weekly commercial production capacity is expected to hit 6.5M+ tests; telehealth providers attempt to jump into the fray, but are subjected to additional FDA oversight

After a series of missteps by the CDC and Trump administration to develop COVID-19 diagnostics at-scale and mount effective outbreak management testing protocols, production of much-needed tests is finally ramping. By April, major U.S. commercial manufacturers are expected to exceed production of 6.5M tests per week (see Figure 1 below). By comparison, South Korea, whose quick implementation of testing has helped contribute to a declining incidence rate, produces ~700K tests per week; implementing a comparable per capita scale of testing in the U.S. would require weekly production capacity of ~4.5M tests. Following FDA Emergency Use Authorization (EUA) for diagnostics behemoths like Thermo Fisher, Roche, Hologic, and Abbott, direct-to-consumer testing companies hoped to follow suit and support this production target with “closed-loop” solutions — mail-order test kits paired with telehealth consultations.

 

Figure 1: Summary of U.S. COVID-19 Diagnostic Production Capacity

CompanyDifferentiatorWeekly Production Target
Thermo FisherLarge installed base, high-volume testing~2M (up to 5M in April)
RocheLarge installed base, high-volume testing~400K
HologicLarge installed base, high-volume testing~150K
AbbottHigh-volume testing~1M
CepheidRapid point-of-care (~45-min) testing (~4X quicker run-time, no shipping to centralized lab)~50-100K (est.)
DiaSorinRapid turnaround time (>1 hr), contracted by BARDA~75K
Total>3.5M (current); >6.5M (April)
Note: Not comprehensive. Represents forecasted production from major commercial manufacturers as of March 23, 2020. Excludes some approved tests from companies with decreased production capacity (e.g., Quidel, GenMark). Additional manufacturers are expected to come online and boost future production capacity (e.g., although not yet approved, QIAGEN expects to manufacture over 1.5M tests / week in April)

Source: DeciBio analysis based on company statements (see Thermo Fisher, Abbott, Roche, Hologic, Cepheid, DiaSorin)

 

The adoption of telehealth solutions has surged in the wake of COVID-19, driven by the value of conducting patient assessments and testing without risk of transmission and expanded reimbursement and use guidelines from Congress and CMS. In light of this, five telehealth players — Nurx, EverlyWell, Carbon Health, myLAB Box, and Scanwell Health — announced plans to commercialize COVID home-testing kits in the last week. While the FDA quickly and decisively passed diagnostic incumbents through EUA, the agency issued a statement clarifying that no at-home test is approved and that additional oversight for at-home tests is underway. This comes as no surprise — while the FDA and CMS have shown considerable flexibility and deregulation in the name of urgency, pumping the brakes on players taking these tests outside of established healthcare infrastructure is merited. While at-home diagnostics for the virus can expand access, several issues remain: (1) EUA is unlikely for companies without a track record of diagnostics expertise that incumbents in the space have; (2) these tests would require self-administration of a nasopharyngeal swab, which can easily be contaminated or incorrectly performed; (3) these tests retail for $150-200 and are unlikely to be covered by insurance; (4) time to result would likely be poor, as consumers would need to wait for the test to arrive before sending it to a centralized lab (which can already take up to a week to yield results); and (5) nascent companies may not be prepared to handle logistics at-scale to ensure reliable testing.

If able to successfully demonstrate test validity and capabilities to manage the scale of remote testing the crisis demands, telehealth diagnostics players can help chip away at the U.S.’ test capacity deficiency. Once accessible testing is rolled out at-scale, more targeted isolation and disease management policies can be instituted and more reliable epidemiological tracking and surveillance can occur.

 

Figure 2: Telemedicine Providers Offer Convenience in Exchange for Decreased Production Capacity

CompanyDifferentiatorWeekly Production Target
EverlyWellAt-home telemedicine testing*30K total (not weekly)
NurxAt-home telemedicine testing*10K total (not weekly), up to 100K in the coming weeks
Carbon HealthAt-home telemedicine testing*1K, up to ~10K in the next week
myLAB BoxAt-home telemedicine testing*150K
Note: * Placed on hold for review by the FDA

 

CHRIS LEW

 

Chris focuses on digital diagnostic, therapeutic, and remote patient monitoring technologies and their impact on personalized medicine and population health. Chris has led market analysis and strategy engagements across the diagnostics and health tech spaces. Connect with him on LinkedIn.

 

Disclaimer: Companies listed above may be DeciBio clients and/or customers