Diagnostic tests are critical to the delivery of timely and cost-effective health care, especially in the developing world where infectious diseases are prevalent, non-infectious disease rates are rising, and health care resources are limited. Inventors, investors, and company executives are slowly recognizing the opportunity to develop and sell diagnostic tests specific to the developing and emerging market countries. Here’s my summary of some several notable events over the past year in the global health diagnostics business.
Last April, Lumora, a ten-year-old, 13-employee spin-out of the University of Cambridge in the UK, announced a collaboration with the non-profit Foundation for Innovative New Diagnostics and financed by the German Federal government to develop a rapid field assay for malaria (Lumora press release and FierceMedicalDevices article). The test will use the company’s BART (Bioluminescent Assay in Real Time) technology that it claims is simple and robust and its proprietary sample preparation system that is also simple and requires no outside power. Lumora has sales of products through licensees, one of whom is about to launch a low-cost HIV assay, and closed a second, $1.1 million round of funding in 2013. I could not find any report of progress on the malaria assay.
Also last year in May, a team of researchers from Michigan State University and the University of Malawi published a report on the use and assay for a malaria-specific protein to identify those children who are most likely to progress to the cerebral and likely fatal form of malaria (FierceMedicalDevices article, MSU Today article and Fox et al 2013). A commercial version of this assay could be used to differentiate rapidly between those cases needing only oral drugs and those needing hospitalization (about 1% of all cases resulting in about 100,000 deaths in children under the age of 5 years). The lead investigator, Karl Seydel of MSU, reported that he and colleagues are developing an inexpensive, portable test that I am guessing will utilize the widely-used ELISA format. For anyone or company interested in licensing this technology and speeding its commercialization, the MSU technology transfer office lists it as available (Quantitative Test for Malaria).
Last November, another company joining the biotech IPO gold rush was Oxford Immunotec Global plc which had its first day selling on NASDAQ (FierceDiagnostics article). Immunotec is a 12-year-old, UK-based company whose primary product is the T-SPOT.TB rapid blood test for tuberculosis screening that is an alternative to the skin puncture test with which many of us are familiar. The test is approved for sale in 50 countries, including the US, EU, Japan, and China, and its sales contributed to the company’s $20 million in product revenue in 2013 (total revenue was $39 million, an 87% increase over 2012) (Immunotec press release). The stock opened at $14 per share with sales generating about $75 million, and it is now trading in the mid $17 range. The T-SPOT test detects latent cases of TB, that is, when the patient is asymptomatic, and is therefore most attractive for screening in the developed world, but long term the company sees its lower-cost alternative being used more widely in Asia, starting with China and Japan (Immunotec JP Morgan presentation).
Closer to home and just last week, Cambridge (MA)-based Daktari Diagnostics closed a C round of financing by raising $13 million, primarily from Merck’s Global Healthcare Innovation fund, Norwich Ventures, and Partners Innovation Fund (FierceMedicalDevices article and Boston Business Journal article). The company has raised about $30 million since its founding in 2008 and will use the new funds to bring its CD4 monitoring system for HIV patients to market. According to the BBJ article and Daktari’s CEO, Bill Rodriguez, the system was first launched in Africa a couple of months ago. Also recently, the company received a $2.7 million grant from UNITAID, the Swiss-based NGO that is part funded by a tax on airline tickets of nine countries, to commercialize its system in seven African countries (Daktari press release). UNITAID primarily subsidizes the purchase of medicines and diagnostic tests for HIV/AIDS, malaria, and tuberculosis by governments and NGOs in developing countries (UNITAID About), so this grant looks to be the first of its kind for the organization, that is, to assist a company enter a market. It will be interesting to see how Daktari uses this infusion of private capital to generate revenue.