With COVID testing on the wane, small diagnostics companies shift focus

Small companies that won big testing contracts earlier in the pandemic are now seeing COVID-19 testing shift to the home.

Next to big-name brands like Abbott Laboratories and Becton Dickinson, a swath of lesser-known companies are selling COVID-19 tests to schools, hospitals and corporations.

Buoyed by the pandemic, these small firms and startups have seen their revenue multiply from selling the tests, but as large institutions wind down mass testing programs, many of these companies are having to rapidly change the way they do business in order to survive.

With the need for over-the-counter antigen tests unlikely to wane soon, according to public health experts, some firms are teaming with drugstore chains and distributors to target consumers. Others are leaning into diagnosing other diseases.

All of them are considering what will happen at the expiry of the U.S. Food and Drug Administration’s emergency-use authorizations for most of the tests once the public health emergency ends.

“The paradigm for testing has shifted most definitively to the home right now,” said Bala Raja, CEO of Clip Health, a testing firm created in 2014 with funding from Y-Combinator and the National Institutes of Health. 

“There is a slowdown in demand across all of these segments — not to say that it doesn’t exist, but over the last several months, it’s been a gradual waning demand in traditional healthcare settings or where somebody has to go out and stand in a line, or go to a drive-thru and get a swab collected and get results,” Raja added.

The Silicon Valley-based company’s tests are used in doctors’ offices, urgent care settings and some pharmacies, as well as by companies that have a license to provide testing for events and employers. Now, seeing demand for testing shift to the home, Clip Health plans to seek authorization for an at-home antigen test with a reusable reader.

“We see COVID being a meaningful part of our business for at least the next couple of years” despite the shift, Raja said.

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