Rocky road for firms in race for Covid-19 test

Singapore

SINGAPORE companies are stepping up in the race to produce cheaper and less-invasive Covid-19 testing methods. This comes as demand is expected to surge with the rollout of travel bubbles globally.

However, succeeding in the market for test kits will be tricky due to intense price competition, industry players told The Business Times.

The latest local player to make the headlines is Breathonix, a spin-off from the National University of Singapore, which is vying to commercialise its 60-second Covid-19 breathalyser test next year.

At a press conference on Thursday, Du Fang, Breathonix's co-founder and chief operating officer, said that the startup is targeting to receive provisional authorisation from the Health Sciences Authority (HSA) for its test platform by the first quarter of 2021.

To date, the HSA has granted provisional authorisation for over 140 Covid-19 tests.

Breathonix is eyeing a service model for commercialisation, with a price point of US$20 per test, which it says is 70 per cent cheaper than a traditional polymerase chain reaction (PCR) test. The startup expects that it will need a high volume of tests - at least 5,000 monthly per machine - to sustain the low price.

The market for Covid-19 tests is a tough one to crack. While Singapore firms have been agile in innovating, price competition may create a race to the bottom.

"It's not clear (if) despite the early start, Singapore-made products would account for a meaningful market share in future," said Chik Wai Chiew, chief executive of Heritas Capital, which has backed biotech firms.

"(The) nature of the market is such that the key to success shifts to scale and cost factors rather quickly when technical barriers are not necessarily high. In addition, regulatory process in bigger markets can take time and effort, and the Singapore market is rather small," he added.

As such, speed is key. While deep tech research is usually like a marathon, developing Covid-19 test kits is more of a sprint, said Lawrence Ho, director of National University Health System's Centre for Innovation in Healthcare.

"The companies need to go for speed and scale in terms of gathering safety and effectiveness data, and sharing this information in as many markets as possible. Realistically, each country will choose only one product and stick with the same one," Prof Ho said. "Our competitive advantage is Singapore's trusted brand. However, this may not be enough without speed and scale."

Singapore-based biotech firm Mirxes, which manufactures and distributes the Fortitude Kit Covid-19 test, has coped with the challenging market by stepping in early to secure orders, according to its chief investment officer Isaac Ho.

Acknowledging the challenges of the business, he said that the next milestone for firms in the test-kit space is to integrate the entire workflow for efficiency.

"Standardisation is one of the major touch points that everyone is looking at. Governments will be looking for aggregators who can (pull) everything into one package," he noted.

Another challenge companies face is in getting access to samples for validation. "(A) key question is whether such test kits' development should be public sector-led or how actively private companies are involved as collaborators," said Mr Chik.

While the market prospects themselves are challenging, industry observers have lauded local companies for innovating fast.

Breathonix, for instance, was "impressive" in how it rapidly applied its existing innovation - designed for detecting lung cancer - for Covid-19, said Jussi Salovaara, co-founder and Asia managing partner of venture investor Antler, which has backed the company.

"The targeted commercial launch in Q1 2021 will bring the company one step closer to expanding into international markets," he added.