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Demand for Cepheid SARS-CoV-2 Point-of-Care Tests Expected to Continue Through 2022


NEW YORK – Throughout the COVID-19 pandemic, Danaher subsidiary Cepheid has seen strong uptake for its point-of-care SARS-CoV-2 tests and its GeneXpert instruments.

On a conference call to discuss its first quarter financial results, Rainer Blair, Danaher's president and CEO, confirmed demand for the tests is still going strong and that the company expects demand to continue into next year.

Danaher's Diagnostics business, which includes Cepheid, saw core revenues grow 31 percent year over year in the first quarter, driven largely by Cepheid. Cepheid's revenue growth for the quarter was more than 90 percent, with Blair noting that the company has seen "unprecedented demand" for its rapid, molecular near-patient and point-of-care tests.

Cepheid has received Emergency Use Authorization from the US Food and Drug Administration for a variety of tests, including its Xpert Xpress SARS-CoV-2 DoD test for use by the US Department of Defense, its Xpert Omni SARS-CoV-2 test to detect the N and E genes of the virus, and its multiplex Xpert Xpress test for SARS-CoV-2, influenza A/B, and respiratory syncytial virus. Cepheid was also the first company to receive EUA for a point-of-care SARS-CoV-2 test in in March of last year.

In the first quarter, Cepheid shipped 10 million test cartridges — half of them were the firm's COVID-19-only test, and half were the company's four-in-one test for SARS-CoV-2, influenza A/B, and respiratory syncytial virus, Blair said. Cepheid has continued ramping up its capacity and expects to ship 45 million tests in 2021, up from the firm's previous estimate of 36 million for the year. Blair said the firm also expects $2 billion in COVID-19 testing revenues in 2021.

According to Blair, COVID-19 testing will be endemic and Danaher believes near-patient and point-of-care testing will continue to be a major player for a long time. "While some folks are talking about 2021 being a peak year for testing for the market," he said, "we believe that we'll do roughly the same number of tests in 2022."

Blair also said Cepheid expects the number of tests it will ship to grow by 1 million each quarter, shipping 11 million in the second quarter and increasing from there. He added that Danaher across all its businesses has invested consistently over the past 18 months to expand its capacity and continues to do so.

The mix of tests will also change throughout the year, he said. While the mix for the first quarter was even, the summer months will likely bring higher demand for the SARS-CoV-2-only test, with 80 percent of test orders for the single analyte test, Blair said. As the flu season ramps up in the third and fourth quarters, he expects the mix to even out again.

Although some experts have predicted a decline in the demand for SARS-CoV-2 testing as vaccines roll out across the world, Blair said the process will likely take years, during which testing for COVID-19 will still be necessary. He added that the effectiveness of vaccines is on a continuum and that breakthrough infections in vaccinated people have already been seen, so testing will continue at the point of care and in near-patient settings. Based on conversations with customers on their outlooks for the next two years, Blair said Cepheid expects to maintain its current level of test shipments.

Demand for the firm's non-respiratory tests has also increased, such as those for sexual health and hospital-acquired infections, "demonstrating the broad applicability of Cepheid's molecular diagnostic offering" and signaling a return to pre-pandemic levels of testing, Blair said.

In hospital and reference laboratories, patient volumes have been at or near pre-pandemic levels in most regions, he added, and the firm has seen activity in China return largely back to normal.

As healthcare, in general, and laboratory testing more specifically, becomes more decentralized, testing at the point of care and near-patient will continue to be strong, Blair said. And as the pandemic becomes endemic, he said he expects tests to "wander from more distant testing settings back to the point of care," potentially transitioning away from testing at places such as events and restaurants and returning to physicians' offices.

Growing placements of Cepheid's PCR-based GeneXpert platform, which have increased by more than 40 percent since the beginning of last year, have allowed the company to have a "leading presence" at the near-patient setting and "uniquely positions the business to support customers' testing needs not only for COVID-19 but beyond the pandemic as well," he continued.

The increase in GeneXpert's installed base has allowed Cepheid to enter new healthcare settings that will offer durability in the long term. Blair said the company's broad testing menu will help keep demand for the platform consistent. In the US, Cepheid's test menu includes 20 assays for sexual health, infectious diseases, and oncology, while the global test menu has 30 assays.

Before the pandemic, Blair said the strength of Cepheid's menu kept the company's revenues growing in the low double-digits, and as that menu continues to expand, "at the very minimum we should be able to drive continued low double-digit growth" at Cepheid, before the additional layer of endemic COVID-19 testing.