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A Year After Pandemic Engulfed Europe, IVD Firms Reflect on an Industry Transformed


NEW YORK – The COVID-19 pandemic has disrupted, reshaped, and transformed European makers of in vitro diagnostic tests in many ways since it began a year ago in the region.

While the human toll of the disease has been terrible, IVD makers also report there have been some positive developments, as demand has spiked and familiarity with testing has grown. Test design and production has also been streamlined.

Yet there have been downsides too – smaller IVD firms have had to delay or shelve projects in order to focus on serving immediate health needs, while some companies have scaled up manufacturing, the demand for which could dissipate when the pandemic ends. Some also say that resources have been diverted to tackle the pandemic that are badly needed for other efforts.

"Much is talked about the positive impact of drawing more attention to the importance of diagnostics – particularly early in a new epidemic, and now pandemic, while vaccines and treatments are being developed and investigated," noted Joe Fitchett, medical director of Mologic, a UK manufacturer of lateral flow and rapid tests with a focus on infectious diseases. 

"However, little is raised on the deleterious effect of diverting the supply chain away from important tests that are not related to COVID-19," he said. Fitchett referred to increases in the prices of raw materials, as well as "delays in delivery of non-COVID-19 materials" as outcomes. "Profiteering from the pandemic is a reality, and one that needs to stop," Fitchett underscored.

Fitchett also highlighted the manufacturing scale-up that has accompanied the pandemic, as test makers have ramped to churn out orders. The UK Department of Health and Social Care, for instance, recently inked contracts to supply 200 million lateral flow COVID-19 kits by May.

"Massive manufacturing capacity for diagnostics runs the risk of dissipating quickly, should demand for COVID tests decline," warned Fitchett. "Considering major investments to scale manufacturing, this could lead to a race to recuperate part of the sunk costs."

Brendan Farrell, founder and CEO of startup Luas Diagnostics, raised similar concerns about manufacturing capacity related to the pandemic. Luas is currently developing a point-of-care antibody test for SARS-CoV-2.

"If you look at what the British government has done, they have appointed several companies to manufacture lateral flow products for them, and those companies are going to produce allegedly 40 million tests per month for the UK market," said Farrell, who is also CEO of Birmingham-based Linear Diagnostics and was founder and CEO of Dublin's HiberGene.

"These companies have bought equipment, geared up, and hired people," said Farrell. "My question then is, what happens with vaccination? What is going to happen to this market, what is going to happen to these companies that have built up their resources?" he said.

A change in mindset

Like other test developers, Farrell noted that the COVID-19 pandemic has had diverse repercussions. The public is more literate in relation to infectious disease testing, as well as the different technologies used to test people for SARS-CoV-2, the virus that causes COVID-19.

"Everybody you meet nowadays, not in the industry but outside the industry, has suddenly become an expert in COVID-19 testing," said Farrell. "That has had a positive impact, because it has raised awareness of the importance of diagnostic testing," he said. "Especially when you are fundraising it opens doors just a little more easily than would have before been the case."

He also noted the growing comfort with different kinds of tests, with the public warming to using lateral flow tests, whereas at the start of the pandemic PCR was beheld as the gold standard. "That has been a rapid shift in mindset, it's been even difficult to keep up with that shift," he said.

Chris Toumazou, CEO of DnaNudge, a UK firm developing point-of-care and at-home tests, similarly noted an evolution in perspective among users, such as hospital labs. "It has disrupted the whole field of personalized medicine and allowed decentralization that would never have happened in my lifetime, even though I've spent 25 years trying to get there," said Toumazou. 

He pointed out that the idea of screening people within hospitals, including healthcare workers, and preventative testing versus testing people who display symptoms, has also become the norm during the pandemic, as has allowing people who are not technicians to carry out such testing. 

"The ability for nontrained people or even minimally trained people to run these technologies would have never happened without COVID-19," remarked Toumazou.

Another sign of change caused by the pandemic is how workers within IVD companies feel about their roles. According to Robert Reitze, a spokesperson for German molecular diagnostics firm Qiagen, employees of the Hilden-based company have felt empowered due to the crisis.

"We always say that Qiagen wants to make improvements in life possible," said Reitze. "Our employees have now lived that and got a response for that," he said. "All of a sudden they are the guys making the COVID-19 tests and people know what they do." 

The effects of the surge

One way in which the IVD market in Europe has transformed during the pandemic has been in size. Manufacturers have seen a spike in demand for SARS-CoV-2 tests, one which they have scaled to meet in terms of not only manufacturing capacity, but also new hires. At the same time, lockdown measures have meant a new way of working for IVD companies, who have had to switch to working remotely, all while working faster than ever before to meet tight deadlines. 

"If you go back to December 2019, the size of the diagnostic market globally was about $70 billion and growing steadily at between 4 and 6 percent per annum," said Farrell. "Along came COVID-19, and all of a sudden within 12 months the size of the market was doubled, and you had more than $140 billion of a diagnostic testing market absolutely driven by COVID-19."

Qiagen's Reitze said the firm has experienced an "extreme rise in demand" for its products, in part because Qiagen's RNA extraction kits were early on viewed as standard reagents, just as some of its automation instruments, such as the EZ1, were mentioned in first-generation testing protocols disseminated by the World Health Organization and the US Centers for Disease Control and Prevention.

"They all included some products they recommended be used that were already approved in the market and demand surged because of that," said Reitze. Qiagen for its part parlayed that demand into crafting a whole catalog of COVID-19 testing products, including its multiplex PCR QIAstat-Dx Respiratory SARS-CoV-2 Panel, which covers SARS-CoV-2 plus more than 20 other respiratory pathogens, as well as antibody tests for rapid testing and a next-generation sequencing panel for surveillance. The company also hired more people to support production and test development during the pandemic.

Addressing concerns that a future decrease in demand could hurt Qiagen, Reitze noted that Qiagen developed its portfolio with an eye on sustainability, meaning that the new products could be adapted for use after the pandemic ends.

"COVID-19 is going to stay with us," said Reitze. "In the future it is going to be relevant to know whether it is COVID-19 or if it is something else and how to treat that person, especially if it becomes part of the respiratory season," he said. "The kind of cartridge that we have [for the QIAstat panel] will stay relevant, and we have invested in production lines that will definitely stay relevant after demand [for COVID-19 testing] decreases."

A shift in test mix

Johanna Fraune, head of marketing for Euroimmun, a Lübeck, Germany based provider of laboratory tests, said the company was well poised to respond to the pandemic given its background in serological infectious disease testing, and noted the firm debuted products for SARS-CoV-2 early on in the pandemic in March 2020.

Like Qiagen, Euroimmun, which is owned wholly by PerkinElmer, moved swiftly to build out a COVID-19 portfolio and now offers real-time PCR tests, an antigen detection assay, multiple antibody tests, as well as more tailored offerings, such as an interferon gamma release assay to determine T-cell response to SARS-CoV-2, and a surrogate virus neutralization test to gauge the inhibitory effect of antibodies.

These development efforts were prioritized, Fraune noted, but that did not mean that other tests in development were shelved, although the company did see a slump in orders for other products.

"There was a decreased demand for laboratory diagnostics for other medical areas, such as allergy and rheumatology in spring 2020," noted Fraune. "At that time, production capacities were maximized to meet the high demand of assays for COVID-19 diagnostics."

Reitze said Qiagen also saw demand skew toward COVID-19-related products while it declined in other segments. Noting the company's expansive portfolio – ranging from HIV and tuberculosis test products to sequencing panels for use in cancer research – he said the firm experienced a "priority shift from the customer demand side," which led to an increase in production of COVID-19-related products, and a decline in production of other kinds of assays.

"We saw a decline in demand for latent TB testing that we saw throughout last year, and at the same time incredible rise in demand for RNA extraction," noted Reitze. "I would definitely say there was a shift to COVID-related products internally but that was with market demand, but there was nothing shelved or that we had proactively put on hold to focus our attention on that."

A growth in capacity

Last spring appears to have been a transformational time for the industry as a whole. Reitze said that because of concerns about supply chain and access to consumables, some laboratories doubled up on equipment or acquired instruments from different vendors. That has led to an increase in laboratory capacity, which could lead in turn to an expansion of testing in the future.

"Because of the demand and supply situation, labs doubled up with different producers because they didn't get the full reagent demand for one producer," commented Reitze. "So they doubled up their testing lines or sample prep lines, automation, whatever they wanted to have, and will need to use that now," he said. "The question becomes does that lab capacity get used or will it scale down again."

Karl Trygve Kalleberg, CEO of Oslo-based Age Labs, also noted the build-up in real-time PCR capacity in Europe, which could present future opportunities for test developers when the pandemic ends.

"People have been buying PCR machines hand over fist, and those who didn't have them upgraded to the biggest models money could buy," he said. "I think platform owners are looking at pushing out other kinds of tests on that PCR capacity."

This bulk up in capacity isn't limited to PCR, he added. Labs during the pandemic have also invested heavily in new sequencing instruments to carry out variant detection. "That increases the capacity for doing sequencing, which translates into having more sequencing-based diagnostics because the installed base is already there."

Like other small diagnostics firms, Kalleberg said Age Labs refocused temporarily when COVID-19 struck to aim its efforts on serving the public health need. The company has been developing epigenetic signatures related to age-related diseases. He noted the company has since refocused its core team back to its programs. "As you can imagine a lot of brain power went toward COVID-19, which would have otherwise been put into any other project," said Kalleberg.

Yet he also said that small European IVD companies had advantages that firms operating in other geographies perhaps lacked – an ability to quickly turn new tests around, trial them with partners, and liaise with regulatory authorities, many of whom were probably close contacts.

"Europe was technically well equipped to deliver new diagnostics," said Kalleberg. "If you look at the number of companies that pushed out new CE-IVD marked tests during this pandemic, it's an astronomical number."

The boost in platform capacity could continue that trend of hammering out and deploying new tests in the clinic, he noted, but the region is also moving to a new regulatory regime focused on the EU's In Vitro Diagnostic Regulation, which calls for more oversight of IVDs. Companies are expected to bring their tests in line with the IVDR by next year. "It will be interesting to see how the new regulations will affect that flexibility and that nimbleness in the future," said Kalleberg.