While the world faced a major pandemic, diagnostic companies and biomedical device makers alike innovated to help our healthcare system through COVID-19. Now, as vaccines become more widely available and conditions of the pandemic change, these businesses wonder: how can the industry sustain this growth going forward?
It’s the question everyone in the industry is asking themselves, according to Doug Bryant, president and CEO of Quidel Corp., a local diagnostics company that has experienced massive growth over the past year with its lineup of molecular diagnostic COVID-19 tests leading the way.
Growth and Innovation Amid the Pandemic
Bryant said that for companies like, Quidel he sees the future life sciences landscape as a place where telemedicine and point-of-care diagnostics go hand-in-hand. The company recently received approval from the U.S. Food and Drug Administration (FDA) for the Emergency Use Authorization (EUA) of its QuickVue At-Home OTC COVID-19 Test — something that would allow people to test at home.
“We actually expect and envision a paradigm shift for telemedicine that’s coupled with what we call telediagnostics,” Bryant said. “We think we’re incredibly well positioned to leverage what we’ve done, and built over the past year and propel the company into the borderless diagnostic marketplace of the future. I think this has created something that would have taken many years to come to fruition, but it’s sad that we had to have this happen to our communities across the country. But at the same time, it is sort of propelling medicine forward, in my opinion.”
According to life science executives surveyed for the 23rd edition of the EY Global Capital Confidence Barometer, they are increasing investment in “digital transformation (67%) and customer engagement (65%) to help grow long-term value.”
In the short-term, companies like Illumina have managed to grow revenues during the pandemic with the ultimate goal of strategically reinvesting in future growth.
“Illumina achieved its first billion-dollar revenue quarter in company history and delivered a very strong start to 2021, exceeding our expectations,” said Illumina’s CEO, Francis deSouza. “Our core business is growing strongly, with both clinical and research customers exceeding pre-pandemic activity levels. As the world continues to move through the pandemic, we’re seeing global investment in the creation of a genomic epidemiology infrastructure to combat COVID-19 as well as monitor for future pathogen outbreaks.”
Investing in Technology Beyond the Pandemic
Across the industry, the wide embrace of digital transformation has been swift and necessary during the pandemic. But for biomedical device makers like NuVasive, Inc., the integration of technology has always been a part of its mission and the broader recognition of med-tech highlights the effective application of these solutions for doctors and patients alike.
“Despite the challenges of 2020, NuVasive made key investments in infrastructure, talent, and technologies to execute on its long-term strategy and deliver the strongest innovation pipeline in spine,” said Chris Barry, CEO of NuVasive. “Along with the dedication and hard work of our employees around the world, this foundation positions us well to drive further value for our stakeholders as we build the largest spine technology company in the world.”
Not only is having technology integrated into patient care necessary for future growth and evolution, but investing in the digital infrastructure of the company is also a crucial sticking point from a year of telecommuting and doing business from home, said the Chief Administrative Officer of Tandem Diabetes Care, Inc., Susan Morrison.
“With regards to COVID-19 specifically, we happened to make an investment in remote work technology in 2019 (video conferencing, virtual meetings, etc.),” Morrison said. “Obviously, that investment paid off in 2020, and continues to be a huge asset in 2021. Tandem also has the only virtual insulin pump trainer app in the industry. This is great for patients new to our technologies, especially during a pandemic.”
Mick Farrell, CEO of ResMed, which produces cloud-connected CPAP machines and ventilators, said that “as a result of the pandemic, we’ve seen accelerated awareness of the importance of respiratory health, growing adoption of digital health, and an increased focus on the importance of healthcare delivered at home – three focus areas that have long been at the core of ResMed’s business.”
The company pivoted manufacturing to produce and deliver more than 150,000 ventilators to countries in need — representing a 3.5 times increase in its ventilator production, Farrell said.
“We are seeing increasing demand for our digital health solutions from patients, physicians, providers, and healthcare systems around the world, as they embrace remote patient engagement and adopt population health management,” Farrell said. “The incredible data assets we have allow us to unlock value for all of our customers: patients, physicians, payer-providers, as well as private and government insurers around the world.”
Joining Forces for Accelerated Growth
With the pandemic demanding life science companies to innovate, at scale and fast, it makes sense that approximately half of the executives in the EY report cited acquisitions as a main way to achieve future growth, “such as new types of products from adjacent business (27%) and talent (22%).”
For GenMark Diagnostics, being acquired by Roche has been a positive move for the company and San Diego as they are actively hiring and expanding manufacturing capabilities, said GenMark CEO, Scott Mendel. In March, the Carlsbad-based diagnostics company announced that Roche would acquire the company for approximately $1.8 billion.
GenMark develops and manufactures syndromic tests that are used to identify which of dozens of bugs that could be causing a patient’s symptoms, from a single sample, Mendel said. He added that GenMark’s “expanding customer base and increasing menu of tests are expected to sustain growth in 2021 and beyond, given the strong market growth for molecular diagnostic testing.”
“Roche’s global commercial infrastructure can help drive adoption of GenMark’s syndromic tests around the world to address unmet medical needs,” Mendel said. Our syndromic molecular platform is a perfect strategic fit within the already existing Roche molecular portfolio, and we can accelerate our innovation and priorities as part of Roche.
Kevin Thornal, division president, diagnostics solutions at Hologic said that in recent months, the company has expanded and diversified its diagnostics business through strategic acquisitions which were made possible by its strong cash flow.
The public company has shipped approximately 100 million COVID-19 tests to 40 countries and in the second quarter of 2021, Hologic reported worldwide molecular diagnostics revenue of $935.3 million.
“These include Biotheranostics, a San Diego-based leader in molecular tests for breast and metastatic cancers, which enabled us to expand into the adjacent growth market of oncology,” Thornal said. “Shortly after that, we acquired Diagenode, a Belgian developer and manufacturer of molecular diagnostic assays and epigenetics products. Most recently, we announced plans to acquire Mobidiag, an innovator in near-patient, acute care diagnostics, a large, rapidly growing area that we don’t compete in today.”
For Thermo Fisher Scientific, their growth strategy is focused on innovation in high-growth and emerging markets and its mergers and acquisitions strategy hones in on expanding its customer offerings, said Executive Vice President and Chief Operating Officer, Mark Stevenson.
“The recent acquisition of Mesa Biotech is an example of our commitment to that strategy,” Stevenson said. “Adding gold-standard PCR technology in a rapid point-of-care offering creates additional opportunity for rapid diagnostics. Thermo Fisher is rapidly scaling manufacturing volume to bring the innovative Mesa diagnostics platform to market faster.”
Acquisitions are not the only path for expansion — strategic partnerships such as the collaboration between Thermo Fisher Scientific and Biocept Inc. have also led to mutual growth for companies.
During the pandemic, biomedical device maker, Thermo Fisher Scientific and diagnostics company Biocept Inc. expanded their commercial collaboration to execute COVID-19 testing solutions. Using Thermo Fisher Scientific’s TaqPath SARS-CoV-2 assay, Biocept, a liquid biopsy company, processes the specimens at its local labs.
“We’re the laboratory provider, so the specimens come in here to our lab and we turn around the test nowadays in less than 24 hours on average, and historically well less than 48 hours for the vast majority of the specimens we process,” said Michael Nall, president and CEO of Biocept. “Currently we process over 350,000 specimens in the last public reporting … around the first week of April.”
In the broader community, Biocept is also partnering with the Foundation for California Community Colleges to provide COVID-19 testing to the 116 colleges in the state. Within San Diego County, the company plans to work with local schools such as San Diego City College, Mira Costa and Miramar College to provide tests to college athletes immediately as well as students and staff in the fall.
Growth Requires Space
With the current demand for products such as COVID-19 tests, companies need more space for a growing workforce, more lab space and manufacturing facilities. For instance, Quidel has expanded its manufacturing facilities in Carlsbad and is hiring an additional 700 employees for its workforce.
Downtown San Diego is also at the center of meeting the life science industry’s need for expansion and a growing workforce. Betsy Brennan, president and CEO of the Downtown San Diego Partnership — a nonprofit organization that promotes the economic prosperity of downtown — said that this expansion makes sense with the central access to transportation and neighboring research institutions.
In fact, CBRE released a report that illustrates the momentum behind the San Diego life science industry as the pandemic has accelerated innovation and venture capital funding.
“In 2018, VC investment jumped 151% from the previous year, with 2020 being the second strongest year on record,” Brennan said. “The region has seen sustained strong venture capital as investors recognize the potential of the San Diego life sciences environment.”
“Downtown has had the majority of the recipe for the expansion of the life science industry into our neighborhoods for some time,” Brennan said. “The thing that has always been anticipated would spur that expansion is space designed for the specific needs of the life science industry and we are fortunate to have several exciting projects with those specifications coming online in the coming years. With this new frontier of desirable space and opportunity for new tenants, the future of downtown as an industry cluster is bright.”