Ellume set to make more than $1bn from rapid COVID-19 tests

US FDA approves the world’s first rapid Covid test, made by Brisbane-based Ellume, but Australians will have to wait.

Ellume CEO Sean Parsons at the Ellume Production Facility in Brisbane on Wednesday. Photo: Glenn Hunt / The Australian

Brisbane-based biotech Ellume is on track to make more than $1bn a year from its rapid COVID-19 tests and is set to max out its production capacity within three months as the US soaks up all its supply.

The US Food and Drug Administration has approved Ellume’s at home COVID-19 test - the first of its kind in the world - which can detect the highly infectious virus within 20 minutes, hailing it a “major milestone” in the pandemic.

The company has returned the favour to America, placing it on top of its list of potential sites to expand its manufacturing beyond Brisbane.

The US government has been big supporters of Ellume, injecting $US30m into Ellume to scale up its production. This compares with cursory engagement from the Australian government, leading to homegrown technology being commercialised offshore and not available to Australians in the near to medium term.

Ellume’s test will be sold across major US retailers and pharmacy outlets, including Walgreens, Walmart and CVS for about $US30 ($39.72). It will make its first US shipment in the first week of January, sending 100,000 tests and progressively step up deliveries to average more than five million a month by March.

The Australian understands that Ellume will receive an average of $20-25 per test sold, meaning once it hits its five million a month target, it will potentially generate revenue of up to $1.5bn a year - about a 20-fold increase based on Ellume’s current sales.

It comes as coronavirus is killing at least 2400 Americans and infecting at least 213,700 others each day, underscoring the importance of quick testing to halt the virus’s spread.

Ellume recruited advice from former Treasurer and US Ambassador Joe Hockey’s Bondi Partners about entry into the American market and navigating the FDA approval process.

Chief executive Sean Parsons says Ellume’s entire production for at least the next six months will be sent to the US, and the company is considering expanding its manufacturing overseas - drawing up a shortlist of potential sites in the US - to meet demand.

“Our manufacturing capacity is expected to max out in the first quarter of next year where we won’t be anywhere meeting demand for our products,” Dr Parsons said.

“We are evaluating how and where we will expand our manufacturing capability.

“There are good reasons for us to expand our manufacturing capacity in America. We have a shortlist of where would be acceptable, and we also have a shortlist in Australia for where we would expand.”

Clinical trials revealed the tests were on par with current laboratory tests, achieving 94 per cent sensitivity for detecting COVID-19, and 96 per cent for identifying negative cases. The tests uses an analyser connected to a smartphone via Bluetooth which digitally analyses a self-collected sample from the user’s nasal passage. Results are transmitted through a secure cloud connection, generating a digital certificate of the results.

Dr Parsons - a critical care doctor who specialised in emergency and intensive care medicine - said he expected the need for rapid COVID-19 tests to continue at least for the next 18 months and complement global vaccine programs.

“We are believers in the vaccine and I will get the vaccine when I can, so we are definitely pro-vaccine. Our objective is to minimise the number of people who get COVID-19 and the number of people who die from COVID-19 between now and when the community gets vaccinated.

“We think that’s going to take the best part of 18 months to get the community immune to COVID-19 such that these COVID-19 infections subside. And our objective is to provide access to diagnostics and rapid testing to limit the spread and reduce the total number of infections between now and herd immunity.”

FDA commissioner Stephen Hahn said the emergency use authorisations for Ellume’s tests was a “major milestone in diagnostic testing for COVID-19”.

“By authorising a test for over-the-counter use, the FDA allows it to be sold in places like drug stores, where a patient can buy it, swab their nose, run the test and find the results in as little as 20 minutes, Dr Hahn said.

“As we continue to authorise additional tests for home use, we are helping expand Americans’ access to testing, reducing the burden on laboratories and test supplies, and giving Americans more testing options from the comfort of their own home.”

Jeff Shuren, director of the FDA’s Center for Devices and Radiological Health said Ellume’s tests will “play an important role in response to the pandemic”.

“The FDA strongly supports innovation in test development and we have worked tirelessly with test developers to support the shared goal of getting more accurate and reliable tests to Americans who need them,” Dr Shuren said.

“(Ellume’s approval) is a promising step forward and we are eager to continue advancing additional innovation in COVID-19 testing that science supports.

“This test, like other antigen tests, is less sensitive and less specific than typical molecular tests run in a lab. However, the fact that it can be used completely at home and return results quickly means that it can play an important role in response to the pandemic.”