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Abbott Sees Continued Demand for SARS-CoV-2 Rapid Tests Despite Expected Decline in Cases

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NEW YORK ─ The forecast for COVID-19 diagnostic testing demand remains uncertain but a recent surge in its rapid screening test sales may be sustainable even when COVID-19 cases decrease, Abbott President and CEO Robert Ford said Wednesday.

Speaking on a conference call to discuss the firm's financial results for Q3, Ford said that in the recent quarter, Abbott saw a surge in demand for its BinaxNow COVID-19 Ag antigen test and ID Now COVID-19 molecular assay tests for SARS-CoV-2 screening.

In the third quarter, the Abbott Park, Illinois-based company posted 48 percent year-over-year growth for its overall Diagnostics business. During the quarter, the company sold more than 225 million COVID-19 tests globally, some of which are completed in laboratories while others are completed in decentralized settings.

The firm more than doubled its year-over-year COVID-19 testing-related sales during Q3 to $1.9 billion. Around 84 percent of the sales — $1.6 billion — were for rapid screening tests, including about $1.1 billion for antigen tests.

"During the quarter, as the Delta variant spread and COVID cases surged, particularly in the US, demand for testing increased significantly, most notably for rapid tests," Ford said, adding that since the start of the pandemic, the firm "believed that rapid tests were going to be … a sustainable part" of its overall COVID-19 testing business.

Over the last several months, rapid testing, along with COVID-19 vaccines, has been an important facet of managing the pandemic, he said, adding that while estimates of demand for testing next year are highly uncertain, "it's clear that the screening segment of the market is going to be an important part, even with therapeutics and vaccines."

In recent quarters, the company has obtained a more in-depth understanding of differences between the markets for symptomatic testing and screening and is paying "closer attention to understanding the channels and the platforms" that serve such markets, Ford said.

A noticeable correlation between the amount of testing for symptomatic patients and the number of SARS-CoV-2 cases does not hold true for screening, he said, adding, "Even as cases have started to come down a little bit in the US … screening demand has increased quite a bit."

Sales of tests purchased over the counter and by employers testing employees are growing significantly, and sales of such tests to government entities — including federal and state governments in the US and governments outside the US — also continue to be strong, Ford said.

Though the company's base Diagnostics business grew 13 percent year over year, excluding COVID testing, in the recently completed quarter, molecular diagnostics revenues, which include some of Abbott's COVID-19 test sales, fell 25 percent compared to a year ago.

During Q3, two of the firm's test kits for the molecular detection of SARS-CoV-2 faced scrutiny from the US Food and Drug Administration. In September, the agency warned clinical labs that the kits, the Alinity M SARS-CoV-2 AMP Kit and Alinity M Resp-4-Plex AMP Kit, could result in false positives.

More recently the FDA announced that it has classified the recall of the kits as Class I recalls and updated information on the recall notice to clarify that the issue is with the software used with the molecular kits. FDA's action was not addressed on the conference call Wednesday.

For Q4, Abbott is forecasting between $1 billion and $1.4 billion in COVID-19 testing sales and year-over-year organic sales growth, excluding COVID testing-related sales, in the low double digits.

The sequential reduction in its forecast for COVID-19-related test sales has nothing to do with capacity, Ford said, adding that the company is producing about 100 million tests per month and shipping as many tests as it can manufacture for rapid screening.

Instead, the reduction in its Q4 forecast reflects the potential for a decline in symptomatic testing as SARS-CoV-2 cases decrease, and the possibility of reducing rapid test prices to maintain a competitive position as new companies enter the market, he said.

Overall, Abbott sees "an opportunity to accelerate the strategy of decentralized testing because of COVID," Ford said.

The firm is prioritizing that part of the in vitro diagnostics market for future investment. It expects to develop new assays and expand its pipeline of tests for pharmacies and urgent care centers, not only for SARS-CoV-2 but also for flu, respiratory syncytial virus, and other conditions, Ford said.

Looking toward 2022, Ford expects Abbott's underlying businesses to sustain "strong momentum across the board." However, COVID-19 testing demand will remain difficult to estimate, he said.

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