Cepheid said today that it has signed the first in a series of agreements with various government agencies and non-profit organizations to buy down the price of Cepheid's Xpert MTB/RIF test in a bid to drive widespread adoption of the assay in the developing world.
Under the initial agreement, the Bill & Melinda Gates Foundation, the United States President's Emergency Plan for AIDS Relief, the United States Agency for International Development, and Unitaid will fund the buy-down of the Xpert MTB/RIF from $16.98 to $9.98 per cartridge in so-called "high-burden developing countries."
The first agreement will see the Gates Foundation make an initial payment of $3.5 million to buy down the price of the test. Cepheid will recognize this funding as revenue of $6.88 per test, pending the execution of agreements with the remaining collaborators, at which time the remainder will be recognized straight-line over 18 months, Cepheid said.
"We are pleased to be working with the Bill & Melinda Gates Foundation, PEPFAR, USAID, and Unitaid to make our innovative Xpert MTB/RIF test available for patient management in 145 HBDCs at less than $10 per test," Cepheid CEO John Bishop said in a statement.
In June, Unitaid said that its board had approved $30 million in funding to back a buy-down of Xpert MTB/RIF, noting that the World Health Organization and the Stop TB Partnership would administer the grant and help distribute the assay in approximately 20 countries (PCR Insider, 6/14/2012).
In addition, Unitaid said at the time, the TB Reach initiative of the Stop TB Partnership, supported by the Canadian government, was expected to co-fund up to $10 million to help implement the tests in certain countries.
However, Cepheid also noted at the time that this particular agreement had not yet been finalized. It is unclear whether the new agreement for Gates Foundation funding is separate from the proposed agreement with Unitaid.
Cepheid developed Xpert MTB/RIF in collaboration with the Foundation for Innovative New Diagnostics and the University of Medicine and Dentistry of New Jersey, and with funding from FIND, the National Institutes of Health, and the Gates Foundation.
The test runs on Cepheid's automated sample-to-answer GeneXpert system, which integrates sample processing and PCR in a disposable plastic cartridge containing all reagents required for bacterial lysis, nucleic acid extraction, amplification, and amplicon detection. The only manual step is adding a buffer to sputum before transferring a defined volume to the cartridge. The test cartridge is then inserted into the GeneXpert device, which provides results in about 90 minutes.
In December 2010, the World Health Organization endorsed the use of Xpert MTB/RIF in such regions after conducting an 18-month assessment of the test's field effectiveness to diagnose early TB, MDR TB, and HIV-associated TB.