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ABBOTT LABORATORIES

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Companies Rush to Shore Up Covid-19 Testing Ahead of Flu Season

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08/30/2020 | 08:15am EDT

By Sarah Krouse and Brianna Abbott

In a Boston lab where technicians have programmed yeast to produce cannabinoid molecules for medical-marijuana products, scientists are now working to develop a Covid-19 testing system that searches for the virus's genetic code. The company, Ginkgo Bioworks Inc., hopes by the fall to create a system that will use analyzers the size of washing machines to process 100,000 tests a day.

Meanwhile, scientists at Sonora Quest Laboratories LLC are assembling new equipment that might soon deliver a 10-fold increase in molecular coronavirus-testing capacity at one of Arizona's largest private labs. Other companies including Abbott Laboratories and public-health authorities are aiming for broader Covid-19 diagnosis and screening with large-scale production of rapid antigen tests that don't need to be shipped to laboratories for processing.

The combined goal of these efforts is to quickly diversify and grow the U.S.'s Covid-19 testing infrastructure as the flu season approaches. This fall, doctors are concerned about a potential swell of people with respiratory symptoms who might seek testing to figure out which virus they have, stressing capacity and supplies of components needed for both kinds of tests.

"I see this like us ramping up as a nation after Pearl Harbor was bombed, " Emily Volk, president-elect of the College of American Pathologists, said of the U.S. building up Covid-19 testing capacity. "I think right now, it's the calm before the storm with the fall flu season."

Dr. Volk, who is also the senior vice president of clinical services at University Health System in San Antonio, said she is pushing the lab's suppliers to ensure there will be enough swabs and transport liquid -- needed both for flu and Covid-19 laboratory tests.

Flu season complicates Covid-19 testing efforts, public-health officials say, because both ailments can have similar symptoms like fever and fatigue, along with other viruses such as respiratory syncytial virus, or RSV.

Tests that can detect several pathogens such as the flu and Covid-19, called multiplex tests, are also slowly coming to market and might help doctors avoid diagnostic trial and error.

Companies including Salt Lake City-based BioFire Diagnostics have received emergency approval for a test that detects several pathogens, in addition to a multiplex test from the Centers for Disease Control and Prevention. San Diego-based Quidel Corp., which is ramping up production of its Covid-19 rapid antigen test, which looks for virus proteins, aims to introduce a test that simultaneously checks for coronavirus antigens and the flu by the end of next month.

Supply shortages persist for chemicals needed to process tests, and are likely to continue, in part because most flu tests rely on the same components, equipment and personnel as Covid-19 tests, pathologists say. Around 30 components feed into a Covid-19 test, said Eric Blank, an official at the Association of Public Health Laboratories. A shortage in any one of the components holds up capacity.

A surge in demand for testing in July as the new coronavirus spread in the South and West of the country strained capacity and led to weekslong delays for some test results, stymying contact-tracing and containment efforts.

The virus spread fast as states reopened before hitting public-health checkpoints -- and as some Americans refused to wear masks. Efforts to expand testing capacity couldn't keep pace, supply-chain constraints persisted, and big diagnostic companies, including Quest Diagnostics Inc. and Laboratory Corporation of America Holdings, or LabCorp, were quickly overwhelmed with demand.

Quest didn't respond to requests for comment.

A significant increase in demand and supply-chain constraints in early July meant LabCorp's average turnaround time for results briefly shifted to four to six days, but is now one or two days, a company spokeswoman said. It is expanding capacity as equipment and supplies are available, she added, and preparing for flu and Covid-19 testing.

Testing capacity in the U.S. expanded through the end of July, but it wasn't enough to meet a wave of demand for tests.

Some states have since revised criteria for who should be prioritized for a test, which, along with long wait-times, has tamped down some demand for testing. The CDC has also dialed back guidelines for who should be tested, saying close contacts of those with confirmed Covid-19 cases don't necessarily need to get tested if they don't have symptoms. The agency didn't say the guideline was changed as a result of capacity concerns.

Cases have also fallen in states that had outbreaks earlier in the summer. The seven-day average of new daily tests in the U.S. was 696,886 as of Friday, down from 812,260 a month earlier, according to the Covid Tracking Project.

Experts say that prevention efforts could yet mitigate both Covid-19 and the flu season, but they aren't counting on that and say the U.S. must prepare for surges in Covid-19 cases along with similar-looking respiratory viruses.

As many as 45 million people in the U.S. get the flu every year, leading to more than 34,000 deaths, according to the CDC. Not everyone is typically tested for it.

Testing capacity continues to grow, said Brett Giroir, the Trump administration's testing coordinator, and the U.S. should have more than 90 million coronavirus tests available in the month of September compared with 25 million done in July. The U.S.'s growing testing capacity is adequate, he said, but isn't enough for every American to regularly get tested.

One major lesson from July: The lab-based molecular tests that comprise the bulk of the U.S.'s current testing infrastructure can't scale fast enough to keep up with large surges in demand. That makes additional forms of testing key, some pathologists and public-health officials say.

At Sonora Quest, Chief Executive David Dexter formed a plan in late June to expand the number of Covid-19 tests the company could process from 6,000 a day -- which was lower than usual because of limited reagent supplies -- to 15,000.

When he presented his idea to state health officials and executives at one of the lab's parent companies, they urged him to boost capacity to 60,000 within the next two months, he said.

The lab hired 200 additional staff members and built new equipment as testing demand surged. By early August, the company had cleared a backlog that had grown to 65,000 tests the month before, and shortened turnaround times to one to three days from a week or more.

Sonora Quest can now handle about 30,000 tests a day and expects to meet a goal of 60,000 by mid-September.

"I'm not spiking the ball and saying it's a complete success because we still have a lot of work to do," Mr. Dexter said.

To turbocharge U.S. testing capacity, some biotechnology and life-science companies are also developing new testing methods that can process thousands of samples simultaneously.

Ginkgo is planning to use technology that looks for the virus's genetic material in a large number of samples at the same time. It is one of several companies that has received funding through a National Institutes of Health competition meant to speed up the development of diagnostic technologies.

"We saw this as essentially a logistics and scale problem," Jason Kelly, Ginkgo's founder, said of U.S. Covid-19 testing.

Rapid antigen testing is also growing in the U.S., with many public-health experts pushing for more widespread use of the technology.

A coalition of more than two dozen states, cities and tribes has partnered with the Rockefeller Foundation to place large orders of antigen tests and the analyzers that run them.

Accurate, rapid antigen tests can help doctors quickly determine whether a person has Covid-19, making them a critical tool for the coming flu season, said Rachel Levine, health secretary at the Pennsylvania Department of Health at a media briefing earlier in August.

Several companies are also working on rapid tests that could be done at home like a pregnancy test, though those aren't yet on the market.

Abbott last week received emergency authorization for a $5 rapid antigen test the size of a credit card that is run by a health-care professional and intended for people with symptoms within seven days of their onset. The Trump administration has agreed to buy 150 million of those tests, an order an Abbott spokeswoman said the company plans to fulfill.

Write to Sarah Krouse at sarah.krouse@wsj.com and Brianna Abbott at brianna.abbott@wsj.com

  

Corrections & Amplifications

This article was corrected at 5:47 p.m. ET to reflect that Emily Volk is president-elect of the College of American Pathologists. The original version incorrectly said she is president of the organization.

 


Stocks mentioned in the article
ChangeLast1st jan.
ABBOTT LABORATORIES -2.24% 105.93 Delayed Quote.21.95%
LABORATORY CORPORATION OF AMERICA HOLDINGS -1.00% 203.16 Delayed Quote.20.09%
QUEST DIAGNOSTICS -0.40% 122.83 Delayed Quote.15.02%
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Financials (USD)
Sales 2020 33 380 M - -
Net income 2020 5 012 M - -
Net Debt 2020 11 533 M - -
P/E ratio 2020 40,8x
Yield 2020 1,37%
Capitalization 188 B 188 B -
EV / Sales 2020 5,96x
EV / Sales 2021 5,17x
Nbr of Employees 107 000
Free-Float 88,8%
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Number of Analysts 23
Average target price 116,76 $
Last Close Price 105,93 $
Spread / Highest target 28,4%
Spread / Average Target 10,2%
Spread / Lowest Target -22,6%
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Robert B. Ford President, CEO, Chief Operating Officer & Director
Miles D. White Executive Chairman
Robert E. Funck Chief Financial Officer & Executive Vice President
Roxanne Schuh Austin Independent Director
Samuel C. Scott Independent Director
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