While much of the healthcare industry suffered layoffs due to interruptions in elective procedures, the diagnostics industry saw no shortage of demand.
The sector—a collection of test makers and laboratories for infectious diseases and various cancers, specialized equipment manufacturers, and testing product suppliers—counted a local worker base of about 4,400 at the beginning of the year.
That’s up 7% compared to last year, according to this week’s inaugural list of OC diagnostic companies, which features 14 entries.
Urgent Need
Employment gains were led by a number of high-volume testing providers that supported the urgent need for COVID-19 tests and related supplies.
DiaSorin Molecular LLC of Cypress increased its local workforce by more than 80% to 325, with a large number of hires in production.
The firm, a unit of Italy-based DiaSorin S.pA., partnered with Toyota Engineering and Manufacturing of Long Beach to scale its operations, even gutting office space to make room for high-volume manufacturing, according to President John Gerace.
“We were able to successfully scale up operations to supply over 1 million tests per month, which enables us to rapidly expand our installed base of instruments while still maintaining 100% service level of our supply commitments,” Gerace said.
Gerace is one of several local execs who believes COVID testing will become a mainstay of the industry.
“Every year we have a strong business testing for the flu,” Gerace said. “I think COVID will follow the same trajectory.”
Likewise, BioDot Inc., an Irvine-based maker of ultra-low-volume dispensers that are used in the process of making tests, has grown as it’s continuing to fill orders that will translate into the production of about 500 million tests in the coming months. Its local base of workers increased by nearly 60% to 63.
“Reality has set in,” Tony Lemmo, chief executive of BioDot, told the Business Journal in September.
“We, as a society, won’t go back to not knowing whether we have the flu, COVID-19 or another infectious disease.”
Investors Interested
Investments in the diagnostics sector have continued to flow.
Fluxergy LLC, an Irvine-based startup developing a new test analyzer system for use by physicians at the point-of-care, received a $30 million investment from Kingston Technology Corp. co-founder John Tu last May.
The company grew its workforce nearly 90% to 75 as it pivoted from equine testing to COVID.
Though well-funded, it is still waiting on emergency use authorization for its analyzer’s software, which requires additional inspection by a specialist at the Food and Drug Administration, Chief Commercial Officer Ali Tinazli told the Business Journal in December.
Funding hasn’t been limited to COVID endeavors.
Hycor Biomedical LLC of Garden Grove has raised about $100 million since 2017, after an undisclosed investor acquired the company.
About half of the funds were raised last year, in support of validation activities and commercial expansion for the company’s new NOVEOS System.
“This system is the first breakthrough in over 20 years in routine lab allergy testing,” Chief Executive Fei Li told the Business Journal via email.
The system was designed to improve lab efficiencies via reductions in labor needs, cost of products and waste generated. Most importantly, the technology improves the patient experience because it requires a very small amount of blood sample for analysis, Li said.
Irvine-based liver cancer test maker Helio Health Inc., formerly Laboratory for Advanced Medicine, has also raised a large amount of funds—nearly $120 million since inception in 2015.
Bright Future
Growth is expected to continue in 2021 for COVID test suppliers and specialty diagnostics firms.
Ambry Genetics Corp., a unit of Japan-based Konica Minolta Inc., now has business in both of those areas. The Aliso Viejo-based firm, which maintains one of the largest clinical labs on the West Coast, decided to provide COVID tests after a request from the state to help boost testing capacity.
While Ambry is primarily known for sophisticated tests for hereditary diseases such as cancer, it developed a saliva-based COVID test that allows patients to provide a sample at home, and receive results within 24 to 48 hours.
It has been offering tests to OC residents in partnership with the OC Health Care Agency for the last few months, and its software platform has engaged with over 120,000 local patients since the program launched, the company said.
At the same time, Ambry said its hereditary testing business has recovered rapidly, after a brief pause in business last spring due to the temporary closure of specialty physicians and providers.
Breast cancer diagnostics firm Agendia Inc. of Irvine experienced a similar lull in business in May and June before test volumes returned to pre-COVID levels over the summer.
The company still anticipates a public listing in the coming months, which will allow the firm to “promote a new strategy and accelerate our growth,” Chief Executive Mark Straley told the Business Journal in August.
“We’ve hit a rhythm in terms of execution and [we’re] reaching a size and scale where [the business] becomes attractive to larger institutional investors and public markets.”
