NEW YORK (360Dx) – In a strategic move to capitalize on gaining a foothold in emerging markets, Meridian Bioscience recently launched a line of rapid, one-step diagnostic tests consisting of more than 60 assays, primarily for infectious diseases.
Still, a focus on the emerging markets will not come at the expense of the firm's molecular testing expansion, Meridian President and Chief Commercial Officer Rick Eberly said in an interview. He also provided insights into Meridian's strategies to enhance uptake of its Illumigene platform and the firm's menu of seven US Food and Drug Administration-approved tests for marketing in the US, as well as nine tests cleared for marketing outside the US.
Besides a very broad menu, the new diagnostic test line, called TruQuick, will feature simple lateral flow design, Eberly said. The firm is also a top reagent supplier to test manufacturers in developing markets, and as such may have an additional competitive advantage of having both expertise and reagents to rapidly develop new tests.
The Cincinnati-based diagnostics company has subsidiaries in Beijing, China, Singapore, and Sydney, Australia that constitute warehousing, shipping, distribution, sales support, and customer service in the Asia-Pacific region, Eberly said.
These subsidiaries support the multiple arms of Meridian's business, including its diagnostics segment — which supplies immunoassays and the Illumigene molecular platform and tests — as well as its newly-acquired Magellan lead testing business; its BioLine division, which sells the molecular components needed for developing molecular assays; and its Meridian Life Science business that sells the components for building immunoassays.
The firm's first quarter earnings highlighted growth in the life sciences business, particularly in China, but overall decreases in Meridian's core diagnostics business led to a lowered guidance for the year and criticism from some analysts who observed competitive pressures mounting in both the traditional diagnostics and molecular diagnostic arenas.
Eberly noted that the TruQuick launch was part of an overall strategy, which has been in place for a few years, to grow the firm's emerging markets business — specifically in China, India, and regions in the Asia-Pacific, and the bigger markets in South America, including Brazil and Argentina — but that the new product also capitalizes on the fact that Meridian already manufactures and sells the components to make the immunoassays.
"Meridian has invested heavily in the emerging market strategy," Eberly said.
Meridian has always been a global company, but the molecular diagnostic and RDT products have largely been focused on developed markets in the US and Europe, he said, and directed toward key disease states that the firm considers "high-value infectious disease targets." These include Clostridium difficile, Helicobacter pylori, influenza A and B, and respiratory syncytial virus.
For example, H. pylori is the bacterium associated with the majority of peptic ulcer disease, which can potentially lead to gastric cancer. The average selling price for an H. pylori test in the US is more than $15 per test, Eberly said, because it delivers a meaningful test result to physicians.
In emerging markets, however, a $15 test is unaffordable.
"We've found that they're not so much interested in the 'high-value' targets, but they are very interested in menu and [in having] as many rapid tests as they can put into the market through the distribution channels to the point-of-care market," Eberly said. This market includes physician's office labs and hospital labs, although the specific sites of test-use differ by country, he said.
"What we've found is that, in order for us to better compete in the emerging markets, we had to develop a very broad menu of rapid tests, and not necessarily focus in on the high-value targets. Our approach has been to develop a very broad menu of rapid tests for infectious diseases and do it in a way that the emerging markets can adopt it, can afford it, their healthcare economics can build it into their systems, and we can take on the competitors that we have in those markets."
The 60-test menu at launch covers the areas of women's health and infectious diseases, such as HIV, syphilis, and hepatitis B; respiratory diseases and tropical diseases, including dengue, Chagas, and malaria; cardiac immunoassays for creatine kinase-MB, myoglobin, D-dimer, C-reactive protein; and miscellaneous tests for targets like calprotectin and fecal occult blood. Most of the tests are CE-marked and performance data is part of each package insert, Eberly said.
The high-value targets are still available in emerging markets, even though such markets are currently less likely to adopt them than developed markets.
Specifically, Eberly noted that molecular tests deliver higher sensitivity and specificity compared to rapid immunoassay tests. In the developed markets, where the healthcare economics can accommodate a molecular test and customers desire higher performance, the average selling price is in the $20 to $25 per test range, compared to emerging markets, like India, where the average selling price is between $5 and $6 per test.
"That's why the market is so big in the emerging markets, like Brazil, India, and China, for these rapid tests, because the healthcare economics have not matured like Europe and the US to the point where molecular technologies have been broadly accepted," he said, noting that rapid test unit volume is expected to be high in the markets.
However, even in the emerging markets Meridian will face competition in diagnostics sales. There are local competitors in Asia-Pacific, such as GenBody in Korea, as well as local in vitro diagnostics manufacturers in China, Eberly said.
Alere is also a major competitor in the region, particularly for rapid immunoassays. That firm sells immunoassays and molecular testing products via both direct and distributor channels in the region. "In Asia, we have subsidiaries in Japan, Korea, China, India, Australia/New Zealand, Taiwan, Indonesia, and Malaysia," an Alere representative confirmed in an email.
But Eberly said Meridian may have some advantage over its competitors in terms of flexibility to rapidly develop new tests where there is a need. As an example, the firm was the first to source the raw material to manufacture immunoassays for Zika infection.
"We're supplying infectious disease diagnostics manufacturers all over the world with [Zika-related] recombinant protein," he said, and now, "We're building that into our own products, such as the TruQuick brand."
Eberly speculated that, if there were to be a new emerging infection, for example, that surfaces in the southern part of China, "We have the ability in our life sciences division to quickly isolate, to develop the proteins or the molecular components, [and] to build an assay very quickly."
"It's that flexibility ... [and] speed to the market that we have that we're using to our competitive advantage," he said.
Regarding the firm's molecular diagnostics business in the developed world, Eberly said the firm is emphasizing to customers the size of its approved menu on Illumigene, as well as the uniqueness of some of its offerings.
The Illumigene malaria test, for example, is a rapid molecular test that has been shown to have very high sensitivity compared to immunoassays and microscopy. This test is seeing uptake in Europe, where it is used on travelers who've developed fevers after returning from endemic regions. The firm plans to make this test a centerpiece at the upcoming European Congress of Clinical Microbiology and Infectious Diseases (ECCMID) conference, which happens to coincide with World Malaria Week, Eberly said.
The firm would also like to expand testing in Africa using the molecular malaria test. "In the endemic regions, a child dies every minute from a malaria infection — there are millions of dollars coming in from [group purchasing organizations] and other organizations around the world to help fund the fight against malaria, and yet they are not yet using the most sensitive and specific test available for detection of the parasite," Eberly said.
Mycoplasma pneumoniae Direct, a "high-value" Illumigene molecular test, is another differentiator, he said. It detects a Mycoplasma pneumoniae infection earlier than a serological test. "Meridian has had a serological test on the market to detect IgM antibodies to mycoplasma for 22 years," Eberly said, adding, "We're now going back to those customers and offering a molecular test that detects directly mycoplasma."
The firm also plans to exploit the customer base of its Magellan lead testing business, which consists of about 7,500 customers, primarily in pediatric physician office labs, to initiate co-selling of certain Illumigene products. The Magellan products will also be launching in China soon.
In its annual earnings report the firm reported that Meridian has more than 1,500 Illumigene customers and 65 new assays were adopted by customers during its fiscal fourth quarter, which ended Sept. 30, 2016. "The Illumigene product line now includes 10 tests and we expect three to four new tests to be introduced over the next 18 months, including tests for insect vector pathogens, as well as infectious agents that are important in managing postnatal complications," John Krautler, Meridian's chairman and CEO, said.
The Illumigene placement numbers, however, contrast with those of Alere, which had 5,000 Alere i placements as of the end of 2015, the firm's representative noted. Alere has yet to report its 2016 results.