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WHO Endorses Cepheid's TB Test

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – The World Health Organization today endorsed Cepheid's Xpert MTB/RIF test for rapid testing of tuberculosis, calling it "a major milestone for global TB diagnosis and care."

WHO is now calling for the fully-automated nucleic acid amplification test to be rolled out under defined conditions as part of national plans for TB and multi-drug resistant TB care and control.

Launched in April 2009, Cepheid's test was developed in collaboration with the Foundation for Innovative New Diagnostics and the University of Medicine and Dentistry of New Jersey.

In a statement, WHO said the test "could revolutionize TB care" by providing accurate results for patients in about 100 minutes, compared to a waiting period of up to three months with current tests.

Many nations still rely on sputum smear microscopy, a method developed more than 100 years ago. WHO noted that Cepheid's test can be used outside of a conventional laboratory setting and that its full automation makes it easy and safe to use.

Evidence suggests that the test could lead to a three-fold increase in the diagnosis of patients with drug-resistant TB and a two-fold increase in the diagnosis of HIV-associated TB cases in areas with high rates of TB and HIV, WHO added.

"We have the scientific evidence, we have defined the policy, and now we aim to support implementation for impact in countries," Mario Raviglione, director of WHO's Stop TB department, said in a statement.

WHO is endorsing the Cepheid test after an 18-month assessment of its field effectiveness in the early diagnosis of TB and multi-drug resistant TB, as well as HIV-associated TB.

In conjunction with the endorsement, policy and operational guidance are being issued based on findings from expert reviews and a global consultation held last week in Geneva. WHO is releasing recommendations and guidance for countries to incorporate the test in their programs, including testing protocols or algorithms.

WHO also said that test co-developer FIND has negotiated with Cepheid a 75 percent discount for the test for countries most affected by TB. Preferential pricing will be given to 116 low- and middle-income countries where TB is endemic.

In a research note, Quintin Lai, an analyst at investment firm RW Baird, said that Cepheid has indicated the test will be offered initially at a price of $18.40, with further reductions as test volumes increase. Four-module GeneXpert instruments will also be offered at $17,000 to $17,500 as part of the program, said Lai.

FIND will drop the price of the test to $16.86 once test volumes exceed 600,000, expected in 2011, and further reduce the price when volume exceeds 1.7 million, which is expected in 2012, and 3.7 million anticipated in 2014, Lai said.

Cepheid management has indicated the program is expected to result in non-GAAP operating margins between the company's cost of capital and its long-term target of the low- to mid-20 percent range, he noted.

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