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Unitaid Provides $30M to Lower Cost of Cepheid TB Test in Developing World

NEW YORK (GenomeWeb News) – Global non-profit health advocacy organization Unitaid said today that its board has approved $30 million in funding to increase access to Cepheid's Xpert MTB/RIF diagnostic test for multi-drug-resistant tuberculosis in resource-poor areas of the world.

Under the agreement between Unitaid, the US Agency for International Development, and the Bill & Melinda Gates Foundation, Cepheid is expected to reduce the price of its Xpert MTB/RIF diagnostic cartridges to $10 from the current compassionate pricing of approximately $17, Unitaid said.

The price reduction will allow an "accelerated roll-out" of the test, Unitaid said, adding that the agreement will apply to more than 145 purchasers in low- and middle-income countries, including those with a high burden of multi-drug-resistant TB and co-infection of HIV and TB.

The World Health Organization and the Stop TB partnership will administer the Unitaid grant and will help distribute Cepheid's test in approximately 20 countries, according to Unitaid.

In addition, the TB Reach initiative of the Stop TB Partnership, supported by the Canadian government, will co-fund up to $10 million to help implement the tests in certain countries. The TB Reach Initiative has already assisted with the early introduction of Xpert MTB/RIF in select countries.

In a statement, Cepheid said that it "welcomed" the Unitaid funding, and that it was "honored" that Xpert MTB/RIF is increasingly viewed as an important tool in the global fight against TB, but noted that a final agreement had not yet been reached.

"While discussions with UNITAID, USAID, and the Bill and Melinda Gates Foundation are ongoing at this time and the final agreement is not yet completed, we believe that all parties are committed to working together to enable [high-burden developing country] programs to access the test at around $10, which should accelerate adoption in the countries where it is most needed."

In late 2010, the World Health Organization endorsed the use of Xpert MTB/RIF in resource-poor countries after conducting an 18-month assessment of the test's field-effectiveness to diagnose early TB, MDR TB, and HIV-associated TB.

The WHO followed that endorsement with a call in July 2011 for countries to eliminate the use of traditional serological testing for TB and instead rely on WHO-recommended microbiological or molecular tests.

In a research note today, Oppenheimer's David Ferreiro said that Cepheid placed more than 400 systems as part of its high-burden developing country TB program in 2011, the first year the company had the program, translating to about $20 million in revenues. Current guidance for HBDC is for revenue growth of between 30 percent and 50 percent in 2012, and Ferreiro estimates Cepheid will record $29 million of revenue from the placements of 286 new systems this year.

"Unitaid funding could alone drive HBDC results beyond expectations," he said. "In addition we believe normalized consumable pull-through on HBDC placements will surprise."

More comprehensive coverage of Unitaid's decision can be found at GenomeWeb Daily News' sister publication, PCR Insider.