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EKF Diagnostics Counting on Partnerships, Non-Core Products for Future Growth

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NEW YORK – EKF Diagnostics is embarking on a number of initiatives in a research and development plant it recently opened in Cardiff, Wales, which company executives said represents a single component of a multiprong strategy to drive future revenue growth.

EKF's new R&D plant, the fifth such facility worldwide, will provide a basis for developing testing applications that the firm expects will enable it to enter veterinary diagnostics markets, Gary Dowthwaite, special projects coordinator at EKF, said in an interview.

The firm is also banking on growth from recent partnerships it has established to expand within new geographic markets, the executives said, and it is developing a lactate test for sepsis diagnosis that it anticipates marketing globally in about two years.

In the R&D facility, the firm has plans to repurpose a recently launched lactate point-of-care analyzer, Lactate Scout 4, that it sells outside the US to athletes and sports enthusiasts who are looking to improve performance by monitoring lactate levels.

EKF has a presubmission with the US Food and Drug Administration as part of an initiative to obtain clearance to market the test for use by sports enthusiasts in the US. However, the same technology can be used to measure lactate levels in dogs, as an indication of their overall health. That, Dowthwaite said, has prompted EKF to launch an R&D project to adapt it for such use.

Similarly, he noted, the firm is adapting technology it uses in its Biosen series of lactate and glucose tests, which are also used to improve performance by athletic sports institutes and professional sports teams. To that end, EKF is engaged in an R&D project with the Royal Veterinary College in London to measure glucose and lactate concentrations in cell culture media used to grow mammalian cells for research.

Outside of adapting its existing products for new applications, the firm also anticipates using the Cardiff facility for sales support, including doing price comparisons for products, such as its hemoglobin instruments, and conducting new technology evaluations involving comparing new diagnostic equipment sourced from external companies with its own products. Further, the firm expects to use the Cardiff facility to perform regulatory activities that it can't handle at other sites because of the existing burden of work at those settings.

EKF's executives noted that the plans laid out for the Cardiff R&D facility could take a few years to translate into increased revenues, but they see that recent strategic activities are bearing fruit.

Cardiff-based EKF posted revenues of £21.4 million ($26.1 million) during the first half of this calendar year, up 5 percent from £20.4 million in the first half of 2018. For the first half of 2019, EKF reported a profit of £1.4 million, up 40 percent from £1 million in the first half of 2018.

For 2019, the firm anticipates revenues of between £44 million and £46 million, the executives said, which would represent an increase of between 4 percent and 8 percent year over year, and reflects expectations for significant revenue contributions from some of its some existing products, such as its beta-hydroxybutyrate assays running on clinical chemistry analyzers, as well as increasing revenues stemming from strategic moves the firm has undertaken in recent years, including inking agreements with Irving, Texas-based McKesson Medical-Surgical; Raritan, NJ-based Ortho Clinical Diagnostics; and Tokyo-based Asahi-Kasei Pharma.

The company has three primary areas of business — point-of-care diagnostics, clinical chemistry-based central laboratory diagnostics, and life sciences. In its point-of-care diagnostics business, which usually accounts for about 50 percent of its revenues, the firm markets rapid hematology, diabetes, and lactate tests and analyzers to physicians for point-of-care use, Martyn Lewis, the firm's Asia-Pacific sales director and group head of marketing, said in an interview.

Its clinical chemistry analyzers and tests marketed to laboratories account for about 35 percent of revenues, and its life sciences products, which account for the rest of its revenue, are enzymes marketed for use in in vitro diagnostic reagents, including EKF assays.

For the first half of 2019, EKF posted £7.4 million in revenues for its central laboratory analyzers, up 13 percent from £6.6 million in the prior half year; £4.8 million for its diabetes analyzer revenues, up 9 percent year over year; and £6.7 million for its hematology analyzers, up 2 percent from the prior-year period.

In the Pipeline

Dowthwaite said that for its future product pipeline, EKF is developing the lactate biomarker technology used in its Scout 4 sport tests as a near-patient test for use in the detection of sepsis. EKF recently started developing the test at an R&D facility in Leipzig, Germany.

The firm anticipates getting CE marking, IVDR approval, and FDA clearance so that it can launch the test within about two years, but it did not disclose specific timelines for anticipated clearances.

"We've had some good initial results, but we're looking at various ways of making the lactate sensor strip more robust in its ability to handle changes in temperature and hematocrit levels, and to better deal with interfering substances," Dowthwaite said.

He noted that no single biomarker or clinical indication is suitable for detecting sepsis. "Its diagnosis requires a range of clinical indications, and an elevated level of lactate is one of those," Dowthwaite said.

Further, EKF spinout business RenalytixAI raised roughly $29 million in 2018 to support the launch of its kidney disease test KidneyIntelX next year.

The company is developing KidneyIntelX, an artificial intelligence-based platform that analyzes electronic health records, predictive blood-based biomarkers, and other genomic information to aid in the identification, prediction, and risk stratification of progressive kidney disease patients that it anticipates launching later this year. Renalytix is developing and commercializing the test with Mount Sinai Health System and plans to submit it to the FDA.

Gavin Jones, global head of product management at EKF, said that a number of agreements the firm inked in recent years are starting to contribute to its US revenues. In July 2018, Asahi Kasei Pharma entered into an exclusive distribution agreement with Stanbio Laboratory, a wholly owned subsidiary of EKF, for the marketing of Lucica Glycated Albumin-L in the US.

Asahi Kasei developed the in vitro diagnostic assay for glycated albumin several years ago and launched it in Japan, China, Korea, Indonesia, Taiwan, and Europe. It received 510(k) clearance for the assay from the FDA in 2017.

EKF's Stanbio has started placing the product with key opinion leaders in the US and is targeting large reference laboratories for sales, Jones said. Under a distribution agreement, EKF's subsidiary is doing marketing, promotion, and distribution, and Asahi Kasei Pharma is manufacturing the assay.

"[The test] has some uses within diabetes but also outside of diabetes and in places where other tests would not work," Jones said. "Asahi Kasei came to us to launch it in the US."

Glycated albumin is among various measurements used for glycemic control required for the treatment of diabetes. Its measurement provides an indication of the glycemic level for two to three weeks prior to testing. That is a shorter term than is indicated by HbA1c, the most commonly used measurement, which indicates the glycemic level during the preceding two to three months.

By providing an intermediate-term indicator, a glycated albumin measurement is considered to be especially useful for the confirmation of shorter-term therapeutic efficacy when treatment is newly initiated and when there is a change in the treatment regimen, EKF said. Further, the biomarker is useful in the testing of pregnant women; patients with dialysis; patients with diseases that reduce the lifespan of erythrocytes, such as hemolytic anemia and renal anemia; and hemoglobin variants.

Another agreement driving EKF US business growth was signed in August 2018. EKF inked a US distribution agreement for its DiaSpect Tm reagent-free hemoglobin analyzer with McKesson Medical-Surgical. The handheld test uses a broad-spectrum photometric method to provide hemoglobin measurements within about one second of a filled microcuvette being placed into the analyzer. It received US FDA clearance and a CLIA waiver earlier in 2018.

Under the terms of the deal, McKesson Medical-Surgical is marketing the device in the US.

"Point-of-care testing for hemoglobin, reflected in the deal with McKesson, is a growing part of our business," Lewis said. "[McKesson] is switching from HemoCue, which is probably the premier brand in the market, and putting their name on one of our analyzers."

McKesson's large sales teams are targeting "physician offices, clinics, and hospitals" in their assigned territories to achieve analyzer placements, he said.

In 2017, EKF announced a deal with Ortho Clinical Diagnostics to provide patients expanded access to its beta-hydroxybutyrate assay for the diagnosis of ketoacidosis. The assay has been available for use on Ortho's Vitros 4600 chemistry system and the Vitros 5600 integrated system.

EKF’s Beta-Hydroxybutyrate LiquiColor Assay (B-HB) has become one of its biggest sellers in recent years, the firm said.

B-HB is the main ketone-body produced during diabetic ketoacidosis and is a useful adjunct biomarker for diagnosis of ketoacidosis and monitoring of therapy. LiquiColor B-HB is used in more than 1,300 laboratories in the US and brings in about £8 million in annual revenues.

With that test, "we've had a lot of success in the US during the past five to six years by moving  people away from using urine dipstick testing," Lewis said.