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Moving From Reagents Supplier to Test Developer, Meridian Bio Expands Role During COVID-19 Pandemic

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NEW YORK – Diagnostic firm Meridian Bioscience is taking the step forward from just making consumables for other firms developing tests for detecting SARS-CoV-2 to developing its first test for the coronavirus.

It is also partnering to distribute a test developed by another firm.

During the past eight months or so of the COVID-19 pandemic Meridian's involvement in that space has largely been manufacturing reagents and consumables for other firms' SARS-CoV-2 tests, including qPCR chemistries and enzyme master mixes.

The demand for reagents used by diagnostics manufacturers to develop tests led to significant revenue growth in the firm's life science business in its fiscal third quarter – 313 percent growth in life science, with 605 percent growth in molecular reagent product revenues and 149 percent growth in immunological reagent revenues. 

Its diagnostics business, however, took a hit as demand for non-COVID-19 tests, industrywide, shrank during the early part of the pandemic. Meridian's diagnostics revenues retreated 35 percent year over year for the three months ended June 30, 2020 with its molecular assay business down 46 percent and immunoassays and blood chemistry assays down 32 percent.

But now as it prepares to offer its first two COVID-19 diagnostic tests, the Cincinnati- based firm's diagnostic test revenues could be poised for a recovery.

The first test, a molecular PCR test that runs on the firm's Revogene instrument, is currently going through verification for a submission to the US Food and Drug Administration for Emergency Use Authorization, according to Tony Serafini-Lamanna, Meridian's executive vice president of diagnostics. The other test is a rapid antigen test that the firm will be distributing in the US for a company that he declined to identify. The antigen test has received CE marking, and Meridian and its partner are working to submit it for EUA, as well, Serafini-Lamanna said.

The Revogene instrument came into Meridian's hands following the company's acquisition of GenePOC last year, and it has been working to convert its molecular customer base from its legacy Alethia – formerly called Illumigene – system to the Revogene. That process has been accelerated due to the COVID-19 pandemic, as Meridian has installed more than 200 instruments, so far, and contracted for over 300, Serafini-Lamanna said.  

When GenePOC was acquired, there was an immediate "definite spurt" in Revogene instrument placements. While the coronavirus pandemic initially slowed that down, "that kind of momentum is back now to a high degree," he said.

The appeal of the Revogene, Meridian's Strategic Market Manager Jennifer Sayers noted, is its small footprint and efficient workflow, which allows it to be used in small- and medium-capacity hospitals. It currently has four FDA-cleared assays, for groups A and B Streptococcus, Clostridium difficile, and a panel detecting gene sequences in carbapenem-producing organisms most commonly associated with antibiotic resistance. 

The SARS-CoV-2 test for the Revogene platform currently uses nasopharyngeal swabs in viral transport media to detect the virus, although Serafini-Lamanna said Meridian has also looked at using nasal swabs for the test and is considering other sample types. He declined to give data on sensitivity and specificity since the FDA hasn't been notified, but said the data so far is comparable to another SARS-CoV-2 molecular test that is a "longstanding EUA comparator." "All we can say is comparatively, it is looking good," he added.

The Revogene test has even further streamlined the workflow with the sample and transport media loaded directly into the PIE, a microfluidic cartridge or "miniature molecular laboratory" which has all the reagents preloaded, Sayers said. "It's one-stop shopping for the reactions," she added. The PIE is then inserted into the instrument and delivers negative results in approximately 70 minutes, with the option to have an early call in around 42 minutes for positive results only. There is no decline in accuracy with the early result, Serafini-Lamanna said.

Meridian currently has a "sweet spot" in small to medium hospitals and is in a high majority of that segment already, Serafini-Lamanna said. "Some of the larger molecular companies may be serving higher-end customers; we feel … that we can help the customers that we've always kind of helped, and they've been very loyal to us," he added. 

The Revogene's easy workflow is a major selling point, since it can get to people who aren't "experienced molecular users" but want a real-time PCR test that's highly sensitive and specific, he said. 

The question for Meridian whether to get involved in the COVID-19 diagnostic space, Serafini-Lamanna said, centered on its current investments in research and development. "We knew a lot of people, a lot of companies would be jumping in," he said. For the company, developing SARS-CoV-2 tests boiled down to one consideration: "Do we take away from one of our other projects to get this [COVID-19] project, because this would have to be done quickly." Ultimately, the company decided to further invest in R&D for COVID-19, and Meridian's pipeline went from about four products to about 15 products over the course of the pandemic, Serafini-Lamanna said. He added that the firm redirected its efforts on its respiratory panel to "move away from other not-as-critical targets" and add COVID-19. The decision to invest in a COVID-19 test on the Revogene platform was also justified for the firm because the return on investment would be high in the near-term, and because of Meridian's strong fiscal year in its life sciences segment. 

By maintaining a presence in the non-SARS-CoV-2 space, the company has found they could fill a demand not being met by other firms. Its consumables business is helping customers who have needed non-COVID-19-related products, but who haven't been able to get them from Meridian's competitors because they've focused almost exclusively on their coronavirus products, he continued. 

Spending the first months of the pandemic manufacturing reagents and consumables allowed Meridian to maintain its position in other areas beyond COVID-19, such as gastrointestinal and respiratory.

Meanwhile, the antigen-based SARS-CoV-2 test that Meridian plans to distribute leverages an instrument-free, lateral flow format to deliver results in 15 minutes. Meridian will be selling the test, which has received CE marking, in the US and the European Union, as well as other markets. Meridian's collaborator on the test has submitted for EUA and is awaiting FDA's decision, Serafini-Lamanna added.

Beyond wanting to carve a space for itself in the diagnostic industry, where the company has faced difficulty in the past, the development of the coronavirus tests is also to meet the continued high demand for such tools. "There's a huge unmet need out there because everybody who's got a COVID PCR test is not able to fulfill what their commitments are," Sayers said. "We aren't looking to displace existing COVID testing at this time, we're looking to augment other testing that's going on."

To meet the needs of the pandemic and get it under control, some experts estimate the US alone may need 200 million COVID-19 tests per month. "The demand right now can't meet the supply of what any US company can give," Serafini-Lamanna added. 

"We get asked essentially every day by a number of customers 'Hey, when are you coming out with this?'" he added, even if those customers are using another firm's test. Although the company is not entirely sure what its monthly manufacturing capacity will be for the tests, Serafini-Lamanna noted that Meridian added a second manufacturing shift and said there are plans to add a third shift, as well, along with more manufacturing lines for the Pie piece.

The firm had already boosted its instrument manufacturing to triple or quadruple numbers when it acquired GenePOC, he said. In addition, the company is looking to expand capacity to up to five times what it's currently doing. "The scale is a lot tougher to achieve" with real-time PCR compared to antigen testing, he said. 

There are a lot of unknowns for Meridian right now, but the company plans to have more information on its mid-November earnings call. "What we do know there is a huge customer demand and we're working toward that demand," Serafini-Lamanna said.

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