NEW YORK – With the ongoing COVID-19 pandemic showing scant signs of slowing down, Abbott reiterated on Wednesday its commitment to the continued development and rollout of rapid tests for help mitigate the spread of SARS-CoV-2.
The ongoing COVID-19 pandemic has driven demand for scalable, accurate, and rapid testing, and despite the rollout of SARS-CoV-2 vaccines that demand will likely continue throughout the rest of the year. During Abbott's fourth quarter earnings call CEO Robert Ford drove home the importance of rapid testing to the firm's revenues and long-term strategies beyond COVID-19.
The company has seen significant revenue growth thanks to its COVID-19 testing portfolio, with total revenues increasing 29 percent year over year to $10.7 billion in Q4 2020 and diagnostics revenues up 111 percent to $4.35 billion from $2.10 billion last year. A huge component of that revenue was rapid diagnostics, with revenues of $2.41 billion, an increase of 334 percent from the year-ago quarter.
Ford added on the call that during the Q4 2020, the largest contribution in COVID-19 testing sales came from the company's rapid tests, including the BinaxNow, Panbio, and ID Now platforms. Of the $2.4 billion in COVID-19 sales, rapid tests made up $1.9 billion.
Ford said Abbott has also ramped up its manufacturing capacity, providing more than 100 million SARS-CoV-2 BinaxNow and Panbio COVID-19 rapid antigen tests combined per month. Despite this increase, he added there is still more room to increase production as Abbott hasn't utilized all of the manufacturing capacity it has built with much of that capacity built around rapid tests.
Abbott has been able to leverage the joint development of the BinaxNow and Panbio tests since they use the same lateral flow technology just in a different format, Ford said. The BinaxNow test is available in the US, while the Panbio test is available everywhere besides the US and has global supply chains. "The demand that we're seeing internationally I would characterize also as probably just starting, it hasn't even peaked either," he said.
Ford also emphasized the importance of thinking globally when considering COVID-19 demand. Because countries are facing different cycles of disease and vaccination strategies, with some in the throes of the pandemic and some getting back to business as usual, "this is not going to be something that will just be done in the next couple of quarters," Ford said.
One concern, that the antigen tests won't be able to detect new variants of the SARS-CoV-2 virus, such as those found in the United Kingdom and South Africa, hasn't been a problem for Abbott's tests, Ford said. Abbott's rapid antigen tests target the nucleocapsid protein, while the other variants seen globally have had mutations on the spike protein. Ford mentioned that Abbott is collecting samples and "constantly studying to ensure that there's no change in the sensitivity of the tests that we've developed."
The focus on rapid testing has sped up Abbott's long-term strategy to decentralize laboratory testing and open new testing channels, which started with the company's acquisition of Alere in 2017, Ford said. The pandemic has accelerated that strategy by about two years and has placed the emphasis on point-of-care testing. "Everything we're doing in fighting the virus has not only a direct impact of helping reopen the economy, etc., but it's also seeding the market and it's building these new testing channels," he added.
Although Abbott started developing COVID-19 tests for laboratory-based systems, such as the SARS-CoV-2 molecular test that runs on both the Alinity m and m2000 RealTime instruments, due to the existing placements of those instruments in labs, the firm "knew that in a pandemic you were going to need to add on top of that testing infrastructure," Ford said. "You would have to add faster testing and testing that could be done at a much significant scale and that was more affordable, which is why we developed those two lateral flow tests."
The testing channels being built, such as those in airports, retail settings, schools, and other congregate settings, aren't going to go away once demand for COVID-19 testing decreases, Ford said. And that demand likely won't decrease for a while, even while the vaccine is being rolled out across the globe. "Even if COVID testing starts to mature a little bit in 2022, we believe there's a significant portion that's still very sustainable," he said. PCR testing, which usually has longer turnaround times, might not be as in demand in a post-vaccine world, but "fast, easier, much more scalable tests, digital tests that are priced for more accessibility and affordability, I think that's the sustained kind of business we see here," Ford said.
In addition, Ford noted that the clinical utility of the firm's rapid tests is strong, and that they can reliably find people who are infectious and actively spreading the virus, rather than those who previously had the virus and still have some remnants of virus DNA in their systems. A study from the US Centers for Disease Control and Prevention released last week found the BinaxNow test is less sensitive than PCR but could be useful when PCR tests aren't available or when quicker turnaround times are needed.
Subsequent to the $2.4 billion in COVID-19 testing sales during the fourth quarter, Ford said he is expecting Q1 2021 sales to be "in the $2.5 billion range," culminating to about $6.5 billion to $7 billion for the full year.
Beyond COVID-19, Ford said Abbott is investing in expanding its rapid testing portfolio and taking advantage of the new channels to "increase the penetration with different assays," such as those for respiratory syncytial virus, Streptococcus, sexually transmitted diseases, and the recently 510(k)-cleared rapid concussion test. The firm is also developing a rapid test using whole blood to detect concussions at the point of care, which will likely require another year and a half to come to market but is a "great opportunity" and could be used in high schools, universities, and sports leagues across the US, Ford said.