A Brisbane-based company that has targeted the premium end of the COVID home diagnosis boom has officially opened its 20,000-square-metre facility in the US, but its founder is now nervous about a potential flu pandemic as "vaccine weariness" sets in.
Ellume founder and CEO Sean Parsons tells Business News Australia the opening of the facility in Frederick, Maryland moves "moves us into pretty rarefied air" of companies that have massive capability for manufacturing tests for COVID and other viruses, at around 500,000 per day.
With its fluorescent detection technology originally made for treating diseases like influenza and tuberculosis, Ellume swiftly applied its technological expertise as the pandemic broke out and developed the first over-the-counter (OTC) rapid antigen test to receive emergency use authorisation from the US Food and Drug Administration (FDA).
The US National Institutes of Health (NIH) then backed Ellume with $40 million to scale up production from Ellume's 4,400sqm Brisbane facility, and a few months later this was followed up by a $304 million agreement with the US Department of Defense (DOD) to develop the premises that have just launched.
Parsons says Ellume will be delivering on the DOD deal through the 2022 calendar year.
"It's [the contract] still got a bit of a ways to run yet – we expect that to be mostly completed this year, and we’re working that all out with the Department of Defense," says Parsons, who was also the Brisbane Young Entrepreneur of the Year 2020.
"We certainly want to be continuing to sell product in the major pharmacy chains and pharmacy channels in the US. We also very much want to be partnered with the US Government to be able to respond to this pandemic and future pandemics, so for us it’s really a dual-use capability.
"We’re certainly the premium product in the category, that's for sure, and we've got a different value proposition than some of the others that are out there. But even with the additional manufacturing capability, we don't have enough to supply everyone."
This means that despite the significant increase in capacity from the US, there is still ample demand for product exported from Ellume's Brisbane operations as well.
"Certainly consumers understand the need for home testing much more than they did beforehand, and that the majority of diagnoses happening in America now are actually home tests, so we’re seeing this incredible flourishing of home diagnostics in the US which has been nothing short of amazing," he explains.
"We are still shipping product from here in Australia to the US. There’s still lots of manufacturing for the US that will be happening here from Australia.
"We are looking to take the product beyond Australia into other markets, and so a lot of that will be coming from the Australian facility."
He says the initial hope was to be able to deliver the home tests to the Australian market this year, but US demand has "really soaked up everything".
"So the launch of the home COVID test isn’t going to be quite ready for this coming winter here in Australia. We'll be looking to leverage this capability here in Australia for other markets while we prepare for following winters," he said, projecting confidence approval will come from Australia's Therapeutic Goods Administration (TGA) as Ellume collects additional data in the States to support its application.
Parsons notes Ellume's scientists are always doing tests to prove the company's tests can detect new variants that emerge.
"We did a lot of testing with that internally to prove that we’re detecting the strains internally. We very much are detecting Omicron," he says.
"There will be future waves of this pandemic – I don’t think we’re done yet, but I also want to make sure that should a flu epidemic happen at the end of this year, that we're as far down the road as we can be to respond."
The qualified doctor believes there is a high likelihood of an influenza outbreak in the United States later this year or early in 2023.
"I'm worried about flu in the next the next northern winter. I think we’re going to see a significant flu epidemic. It’s very hard to select the right strain for the vaccine," he says.
"I think there's a fair bit of vaccine weariness going on now from COVID, and no one’s had flu for a couple of years, so I think it’s ripe conditions for flu to spread swiftly through the community, so I’m concerned about what’s happening for the flu."
With that in mind, the entrepreneur whose business was born from his observations of testing unpreparedness in the face of the 2009-10 swine flu pandemic, is now aiming to launch a combined Flu-COVID test later this year, subject to FDA authorisation.
"We're keen to see a flu-COVID combination test get done, so we’re working towards that at the minute and we think that’ll be the right next product for us," he says.
"But very much we want to keep building on the capability we have and keep delivering breakthrough products for consumer health."
Ellume to mount vigorous defence against class action complaint
Following an FDA recall of two million tests manufactured by Ellume which were identified by the company as delivering false positive results last year, two US consumers have filed a class action complaint in the Maryland District Court over the matter.
The plaintiffs Karen Kerschen and Wallace Lovejoy allege Ellume failed and refused to refund purchasers of recalled COVID tests, alleging the company was unjustly enriched at the expenses of the plaintiffs, who claim to be also representing others who are "similarly situated".
An Ellume spokesperson said the company had provided refunds to most customers who used an affected test and received a positive result, even if the positive test result was accurate.
"Ellume is aware that it has been named as a defendant in a lawsuit challenging the adequacy of the reimbursement program that Ellume announced months ago in connection with its voluntary recall of some of its COVID-19 Home Tests, after Ellume noted an increased chance that these tests might provide an incorrect positive result," the spokesperson said.
"The tests worked as intended for the majority who used the products, including those who received a negative test result.
"Ellume also has provided refunds to most customers who used an affected test and received a positive result, even if the positive test result was accurate. The claims in this lawsuit are wholly without merit, and Ellume intends to mount a vigorous defence."
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