That’s one result of the past year that Tony Lemmo believes will have a lasting impact on the diagnostics industry, and where the sector goes as the country comes out of the pandemic.
The chief executive of Irvine-based BioDot Inc., a maker of ultralow-volume chemical and fluid dispensing systems used to produce diagnostic tests that recently entered an agreement to be acquired for $84 million, sees the direct-to-consumer channel as a big opportunity.
While over-the-counter tests without a prescription for pregnancy, cholesterol, and even HIV have been approved, “the channel didn’t exist for [most of] these infectious disease tests before,” Lemmo said.
It’s good news for BioDot, whose products—which range in price from $20,000 to $1 million—are used by large in vitro diagnostics companies to manufacture more than 3 billion diagnostic tests worldwide each year.
“We’re following the lead of our customers [who are] invested in using the OTC regulatory pathway to offer other value-added and highly in-demand tests for the flu and other infectious diseases,” Lemmo said.
Furthermore, as more companies pursue home testing, there will be a “need for more point-of-care equipment, because those tests are not currently sold in volumes that would be likely for the over-the-counter channel.”
Emerging OTC products and a return to more normalized business for the company’s base of life sciences and clinical diagnostics clients are expected to lead to another year of double-digit growth for BioDot, according to Lemmo.
That puts BioDot on the path to exceed $40 million in annual revenue in 2021, up from $36 million in 2020.
In addition to the diagnostics industry, the company’s customers include those in the industrial, life science and medical product markets.
Lemmo isn’t the only one taking notice of testing opportunities on the horizon.
Last month, ATS Automation Systems Inc. of Ontario, Canada said it inked a deal to acquire BioDot for $84 million. The transaction, expected to close in the second quarter, will boost the automation company’s positon in point-of-care and clinical diagnostics end-markets, the buyer said.
It’s the second sale of BioDot in a little more than a year; in April 2020 it was sold to Boston-based private equity firm Artemis Capital Partners on undisclosed terms.
“Given the transition toward near-patient and at-home diagnostic testing for a broad range of infectious diseases including COVID-19, and other medical and non-medical testing applications, the acquisition of BioDot will allow us to play a bigger role in supporting the needs of our Life Sciences customers for the long term,” Andrew Hider, chief executive of ATS, said at the time of the announcement.
The pending acquisition was a result of both “inbound interest” as well as “our recognition that the business could expand further with the right size, support and structure behind it,” Lemmo added.
ATS bills itself as a leader in the development of sophisticated manufacturing automation systems, with a number of capabilities for making the same type of product, efficiently and rapidly, over and over again, for a variety of industries.
The backing of ATS, which is valued at about $2.3 billion, gives BioDot access to resources such as over 1,200 engineers who have “the unique skills to bring custom solutions and new products to bear,” Lemmo said.
Spirit of Service
BioDot doesn’t expect the transaction to impact its local operations footprint or its employees. On the contrary, it will enable “growth and cross-training opportunities” for employees, which as a small company, have been limited in the past, Lemmo said.
BioDot has grown from about 60 employees to 94 in the last year, scaling to help test manufacturers produce hundreds of millions of COVID tests since the onset of the pandemic.
The company’s key edge lies in its combination of products, product capabilities, and support provided on a global scale, according to Lemmo.
“A lot of equipment makers don’t have the commitment and infrastructure that we do from a service and support perspective. Under ATS, we’ll do even more, so that’s a continually evolving competitive advantage.”
Lemmo, who will remain chief executive, joined BioDot two years after its founding, in 1996. He returned in 2006 as vice president of R&D, following BioDot’s acquisition of his own company Entevis Inc. He was promoted to chief operating officer in 2011, added the title of president in 2017, and took over as chief executive in 2020.
Lemmo succeeded founder and former CEO Tom Tisone, who stepped down from his position last March after BioDot was acquired by Artemis.