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Quidel to Unveil Two New MDx Platforms at AACC as Company Ramps Up Molecular Business

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NEW YORK (GenomeWeb) — Quidel said this week that it will officially unveil two new molecular diagnostic systems at the American Association of Clinical Chemistry annual conference and expo in Chicago next week.

The first platform, called Savanna, is a cartridge-based, sample-to-answer system that can run both real-time PCR and isothermal helicase-dependent amplification assays. Quidel has been developing the system for a few years, initially in collaboration with Northwestern University, and aims to initially launch the system with a quantitative HIV assay in resource-poor areas of the world.

The second platform, Solana, is designed to run up to a dozen of the company's HDA-based assays simultaneously, and is scheduled to commercially launch some time next year.

Quidel CEO Douglas Bryant discussed these initiatives and other business matters in a conference call this week summarizing Quidel's second quarter earnings, a full recap of which can be found here.

Until recently, Quidel's core business had been antibody-based testing, including a large influenza diagnostics component. Sofia, the company's new fluorescent immunoassay testing platform, continued its rollout in Q2, Bryant said. Revenues were up 136 percent over the prior year and were helped by recent CLIA waiver of the firm's respiratory syncitial virus test and gains in the hospital segment. On a trailing 12-month basis, sales of instruments and cartridges were $21.4 million, he said.

The company also submitted a CLIA waiver package for Sofia strep A in Q2 and continued development of two quantitative assays, which are scheduled to launch in 2015.

The company generated $24 million of new product revenue in the last 12 months, $5.1 million of which was from non-influenza products, Bryant said. This includes a growing molecular products line.

Quidel already has several molecular assays on the market for use on existing commercial PCR platforms, as well as several handheld isothermal assays based on technology it previously acquired along with BioHelix.

However, it has also been developing its own molecular testing systems, the most advanced of which is Savanna. Last year the company won an $8.3 million milestone-based grant from the Bill and Melinda Gates Foundation to support the development, validation, and manufacture of a low-cost quantitative nucleic acid test to monitor HIV drug treatment that will run on Savanna.

During this week's conference call, Bryant said the company had now achieved the milestone of demonstrating that an HIV test performed well in a Savanna cartridge on a fully integrated system. The company has now increased spending in an effort to pull forward the timeline for HIV quantitative studies in Africa, he said.

Quidel is also in the process of setting up cartridge manufacturing in Ohio, which it expects to be operational this summer. The company is building Savanna alpha units now and expects to start studies in Africa later this year.

"The same alpha unit that we would be building in order to accomplish all that, now also becomes available for development work on the assays that we would be launching [in the US]," Bryant said.

In response to a question about how Quidel is positioning itself relative to other small-footprint molecular platforms on the market, such as Cepheid's GeneXpert and Alere's new Alere-i, Bryant described three advantages of Quidel's system.

He emphasized that the graphical user interface is "state of the art and it's as easy as it's going to get to run an assay." This means it could ultimately be CLIA waivable.

Second, while the system can run real-time PCR with shorter cycling times for quantitative assays, qualitative assays demanding faster turnaround time will use the HDA technology, possibly making them quicker than competitors' assays. "Having assays that run in the 20 to 40 minute timeframe versus an hour to an hour and a half has a significant advantage," Bryant said.

Finally, Bryant said he believes Quidel's cost of goods sold will be dramatically less than competitors'. Because of novel extraction technology and simpler cartridge design, cost to manufacture the instrument and test cartridges is low, he said, which will enable Quidel to launch with a reagent agreement plan strategy.

"I also think we have a pretty good track record of developing menus. We are behind at the moment, but I'm pretty confident we can catch up pretty quickly, in the infectious disease space specifically," Bryant said.

He noted that Quidel had "acquired the Alere product" and is currently running studies. "We'll be able to comment further when we get the performance data" comparing the two, he said.

During the call, Bryant also disclosed for the first time that another molecular platform called Solana is in the works. He declined to comment extensively on this, beyond saying that a user would be able to mix and match Quidel HDA assays on it and run up to 12 assays at a time. "A customer that might run, let's say 30 a day ... could effectively, just as the samples come in, put up to 12 on Solana and run those assays very quickly and very economically," he said.

Bryant also noted that this program had been in the works at BioHelix for some time, and "all the R&D expense was and is in the current run rate. We're just now, we believe, well within a year of launch and we think therefore the AACC [conference] would be a good venue to tell customers about it."

The company already has three molecular product lines commercially available ─ AmpliVue, Lyra, and Lyra Direct. In Tuesday's call, Bryant reported results and progress for each of these.

AmpliVue – a handheld platform Quidel acquired along with BioHelix for $10M just over a year ago – now has three US Food and Drug Administration-cleared assays, for Clostridium difficile, Group B strep, and herpes simplex viruses 1 and 2. The company submitted a fourth AmpliVue assay to the FDA in May, and it is wrapping up clinical trials for submission of the next two tests "sometime in the back half of this year." The tests are HDA-based assays and use lateral flow detection.

Bryant also said during the call that Quidel will "continue to develop relationships with AmpliVue ... to find the right customer for the product," adding, "We had originally thought that it was exclusively smaller labs who were doing [immunoassays]. We have now modified our thinking a bit and we are actually working with some fairly large customers who like to run things in off-shifts one or two at a time."

The Lyra and Lyra Direct tests, meantime, are meant to run on existing PCR platforms, two of which — the QuantStudio Dx and 7500 Fast Dx from Thermo Fisher Scientific — are marketed on the company's website via Thermo brand Life Technologies.

Prior to the second quarter, two Lyra tests — influenza A and B plus RSV, and hMPV viral RNA — had been FDA cleared. In Q2, Quidel received FDA clearances to market two new Lyra assays: group A plus pyogenic C or G streptococci, and HSV-1 and -2 plus varicella-zoster virus.

"In both cases, the assays address unmet needs," Bryant said. "As a result, we have seen early interest from several higher volume clinical laboratories. Based upon the traction we're seeing to this point, I believe the two assays will be meaningful contributors to revenue and gross margin in the near term," he said.

In addition, work on these products could be leveraged as Quidel develops assays for Savanna, Bryant said.

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