Skip to main content

Luminex Responds to FDA Warning Letter While Ramping SARS-CoV-2 Test Manufacturing

NEW YORK ─ Luminex on Wednesday provided details of its response to a warning letter issued in late June by the US Food and Drug Administration related its Verigene SP instrument, one day after company officials said on a conference call that it was taking action to mitigate issues outlined in the letter.  

During the call, officials also provided color on Luminex's progress in the COVID-19 testing space as it reported a 32 percent uptick in revenues on sales of SARS-CoV-2-related tests and platforms. Demand in non-coronavirus product segments was down, however.

The FDA issued its warning letter to the Austin, Texas-based firm alerting it to a malfunction in its Verigene SP instrument, saying a "medical device report … was filed after a patient died and [after] a malfunction which resulted in a delay of therapy due to false-negative results of the firm's assays using the Verigene SP instrument was reported."

The agency further noted that the "false negative device result may have led to a missed opportunity to initiate effective treatment earlier. The risk of false-negative results could be the inappropriate de-escalation or lack of escalation of antibiotic therapy until subculture sensitivity testing was completed."

In a document filed with the US Securities and Exchange Commission on Wednesday, Luminex said that it "believes it is taking appropriate measures to address the items identified by the FDA with respect to the Verigene SP instrument and its hybridization heater" and that it has responded to the FDA outlining these measures. The company said in the SEC document that in response to the warning letter, it is recalling all non-Luminex temperature verification fixtures from the field and intends to replace them by September 18 this year with fixtures built and verified by Luminex.

"Additionally, we are executing a field action to ensure all Verigene SP instruments deployed in the field are recalibrated with these in-house built and verified temperature verification fixtures to ensure no out-of-specification conditions exist by March 18, 2021," the firm said, adding that it further continues to evaluate the kind of corrective or preventive action that may be required.

Luminex President and CEO Nachum Shamir said during the conference call on Tuesday that the FDA warning letter did not restrict the manufacturing, production, or shipment of any of the company's products, and didn't require the withdrawal of any products from the marketplace.

Instead, Luminex is expanding manufacturing capacity for its MDx assays from approximately 1.8 million tests per quarter to approximately 3 million tests per quarter. The company sold approximately 2 million tests for use with its MDx platforms in the second quarter, more than half of which were related to COVID-19, Shamir said.

The company's manufacturing ramp-up assumptions don't include capacity for its serology tests, which Luminex is scaling up in anticipation of customer demand, Shamir added.

In July, the FDA granted EUA to Luminex for its xMap SARS-CoV-2 Multi-Antigen IgG Assay, which detects IgG antibodies against SARS-CoV-2 on Luminex systems.

In March 2020, the firm received FDA EUA for its new NxTag CoV Extended Panel, a high-throughput test for detecting SARS-CoV-2 that provides results for up to 96 samples in about four hours. The following month, the company received FDA EUA for its Aries SARS-CoV-2 assay, which provides test results in about two hours, according to Luminex.

Shamir said that he anticipates the planned manufacturing expansion should be completed by mid-August.

By the end of the summer, Luminex also anticipates obtaining FDA EUA for other SARS-CoV-2 tests that it has developed, including two for which the company recently submitted EUAs ─ a NxTag RPP plus SARS-CoV-2 consolidated panel and a standalone assay with its Verigene I instrument. It also plans to soon apply for EUA for a next-generation Verigene II respiratory assay with a SARS-CoV-2 target, Shamir said.

In the meantime, the firm's expectation that new assay launches could revivify its revenues in 2020 began to materialize in Q2.

As a result of the loss of a Laboratory Corporation of America-associated business about two years ago, Luminex experienced a revenue slump in recent quarters, curbing the company's growth. With the LabCorp drag behind it and the emergence of pandemic-related demand, the firm is exceeding previously established revenue goals. In the second quarter, its molecular diagnostics sales surged more than 100 percent year over year to $64.9 million in response to demand for its SARS-CoV-2 tests. On Tuesday, the company raised its guidance for 2020, bumping expectations to $415 million or more, compared to $362 million or more that it had previously announced.  

"We find ourselves 21 percent ahead of prior expectations for the first half of 2020, with the prospect of continued success given the likely continuation of the COVID-19 pandemic," Harriss Currie, the firm's CFO, said on the conference call. He said "two primary factors should be taken into account when thinking about the back half of the year. The first is a tailwind associated with the pandemic, primarily in our molecular diagnostics business and also modestly in our partnership business. The second is a corresponding headwind affecting both our flow [cytometry] revenues and also our partners who operate in the academic research marketplace."

In contrast to growth in other business segments, Luminex said its clinical tools and life sciences products continue to be adversely impacted by the COVID-19 pandemic. Research-based flow cytometry revenue of $7.4 million in Q2 was down 44 percent year over year, primarily due to the firm's inability to access potential customers and current customer sites to install its systems.

In a research note on Wednesday, William Blair analyst Brian Weinstein referred to Luminex as "a bit of an enigma … as the various COVID-19 offerings it has and the pipeline opportunities have not been as impactful to the testing tapestry or to the company's results as it has been for others."

Though the company is showing good growth, it is not yet a "core or pure-play COVID-19 beneficiary," he said.

Referring to the firm's guidance for Q3, Weinstein noted an approximately $10 million decrease over revenue booked in Q2. "We find it difficult to think there will not be an acceleration in COVID-19 revenue in the third quarter," he said.

Luminex entered Q3 with "an order book of approximately $29 million, the majority of which was COVID related," Currie said. That included orders the company was unable to deliver by the end of the second quarter and orders placed for future delivery. "Prior to the onset of the COVID pandemic, our average order book entering the [new] quarter was approximately $5 million," he said.