NEW YORK – Accelerate Diagnostics is planning to target broader markets and expand its reach as it launches and commercializes a new system for MALDI mass spectrometry and an update to its Pheno platform, the firm's executives noted on a conference call for the company's Q1 earnings results.
Both the Accelerate Arc system for microbial identification and Pheno II instrument are expected to open new markets and opportunities for the company, CEO Jack Phillips said on the call.
The Accelerate Arc Module and its BC Kit, which rolled out as a research-use-only system at the end of the quarter and has been registered as an in vitro diagnostic with the US Food and Drug Administration, allows for automated and rapid microbial identification of positive blood cultures through MALDI mass spec instruments. The module uses inline centrifugation and automated sample prep techniques that work together with the blood culture kit to provide a suspension of cleaned microbial cells that can be directly transferred to a MALDI spotting plate.
According to Phillips, there has been early interest in the platform "consistent with our expectations." He added "numerous" evaluation deals have been struck, and the potential market opportunity could reach $300 million. In addition, the "rate of contracting is accelerating in the second quarter" for the platform.
The system has the chance to increase Accelerate's presence in a new market, with Phillips noting that MALDI is the preferred method for microbial identification for much of the microbiology market because of its large library of organisms, the instrument’s accuracy, and its low operating cost. Almost 60 percent of the firm's prospective customers in the space have MALDI devices, with the number growing as smaller and more inexpensive MALDI instruments become available, he noted.
However, MALDI has a key drawback: It takes between 18 and 24 hours to return a result. To get around that hurdle, the Arc automates the front end of the device to deliver results in a little over an hour, thus creating "an entirely new razor/razor-blade revenue stream" for Accelerate, Phillips said. The new market opportunity will also "greatly benefit our ability to bundle the Pheno with AST test kits."
Almost all of the evaluation deals inked so far have been signed with customers new to the company, a "good early sign that Arc will provide a gateway to more Pheno business," he said.
Beyond the FDA registration, the company is also pursuing regulatory approval in Europe, the Middle East, and Africa, and expects In Vitro Diagnostic Regulation approval in the EU later this year. The company saw interest in the platform during meetings with customers at the 32nd European Congress of Clinical Microbiology and Infectious Diseases in April, which "confirmed our sizable opportunity" in the European market where "MALDI is the dominant method for bacterial identification," Phillips said. Access to customers in Europe is improving as the continent has relaxed COVID-19 restrictions and the firm expects the business to continue to grow in 2022.
Accelerate Arc is also meeting a need with a solution that few other companies offer, Phillips said. While there is significant competition in the microbiology market, the Arc offers an automated end-to-end solution that can interface with customers' existing MALDI instruments.
The other key instrument launch Accelerate is planning, although it is still a ways off, is its Pheno II instrument — a next-generation version of its existing Pheno platform. With clinical trials planned for 2023 and a US launch scheduled for 2024, Phillips said that the instrument will allow Accelerate to target the "entire rapid AST market," by being able to run not only positive blood cultures but also "all other isolated colonies" on one platform.
"Today's microbiology lab relies principally on culture plates and decades-old automation," using instruments that "have labor-intensive and complex workflows that produce slow results," he said. The Pheno II instrument is designed for random access and for a variety of organisms across multiple sample types to be run simultaneously, decreasing the workload and speeding up the results process.
So far, the company has locked in its consumables design and established a pilot manufacturing line for the consumables. It has also finalized the design for its development instruments that are currently being manufactured. Having a solution for the whole AST market "in a single integrated platform" will also allow for "larger instrument annuities at higher gross margins," benefiting the company's overall bottom line, according to Phillips.
Accelerate has high hopes for the Pheno II's potential and will continue "to invest in our next-generation platform, which will open up a much, much broader segment of microbiology for us … the segment around isolate testing and other specimens," Phillips said.