Interest in Biomerica Inc. and its stock has taken off in recent weeks after the Irvine-based maker of medical diagnostics and therapeutic products said it began shipping samples for a 10-minute test to determine if a person has the antibodies to the coronavirus, which means they have already been exposed to it.
Its shares (Nasdaq: BMRA) have tripled to about $7.45 each and a $74 million market cap after it said on March 17 it has begun shipping samples of the test that utilizes blood from a finger prick.
The company said it expected to sell these disposable, single-use devices for less than $10 per test.
“What our test tells you is whether you’ve been exposed to COVID-19 and are producing antibodies to COVID-19,” Biomerica Chief Executive Zack Irani told the Business Journal.
“There are some published studies that suggest that these antibodies will enable a likely immunity to the coronavirus.”
Clinical, Home Use
Biomerica, founded in 1971 under the name Nuclear Medical Systems Inc. and with more than 50 employees, manufactures an array of specialty diagnostic tests for clinical settings and home use.
Some of its home diagnostic tests include those for pregnancy, drug abuse or prostate or breast cancer. Its home test for colon cancer is one of its more significant products and is being sold at pharmacy chains like CVS and Walgreens.
Last June, the company said China signed a $17 million deal over seven years for an at-home test to detect colorectal cancer and other similar diseases.
Before the coronavirus pandemic, Biomerica’s H. pylori product to detect bacterial infections was its principal focus. If approved, the company could produce its product, which is currently in clinical trials “at a significant discount” to a rival product and still earn a 90% gross margin, according to an investor presentation on its website.
Another product scheduled for a clinical trial, InFoods, is designed to allow physicians to identify specific foods like eggs or wheat that cause problems in patients’ stomachs.
Biomerica began to receive increased interest from investors earlier this year, before the pandemic took hold in the U.S.
In February, the company received a $2 million investment by issuing convertible preferred stock to Palm Global Small Cap Master Fund LP. Its shares, issued when the stock was trading around $2.73, were convertible at $3.50. The company said it’s using the proceeds to obtain FDA clearance and launch its H. pylori product.
“We are impressed that Biomerica has created a formidable suite of diagnostic products across the gastrointestinal spectrum,” Joshua Horowitz, a Palm Global portfolio manager, said at the time of the investment.
In the past four years, the company’s annual sales have been in the $5 million to $6 million range. It hasn’t reported a profit in the past four fiscal years as it has concentrated on research and development and is now moving into the commercialization of its products.
1M Tests Per Month
Biomerica’s main campus on Von Karman Avenue, next door to a distribution facility used by Amazon, runs 23,000 square feet and includes FDA-registered manufacturing facilities. It also has a 10,000-square-foot facility in Mexicali.
The company said earlier this month that it “has the equipment and capacity” to manufacture over 1 million antibody tests per month at its Irvine facilities.
“The entire Biomerica team is working tirelessly to make our low-cost tests available to the hundreds of requests we have received,” Irani said.
Irani, a 1995 MBA graduate from the University of California-Irvine, has been with the company for 23 years. The management and board own about 25% of the company.
Mount Sinai Deal
Biomerica utilizes serologic blood tests to determine if a patient is infected with SARS-CoV-2, the virus that causes the COVID-19 disease.
The 10-minute test is a basic antibody test that doesn’t reveal whether you are COVID-positive or not.
Instead, the tests detect antibodies that “show up in detectable quantities in approximately eight days following infection and remain detectable for as long as three months or more,” the company said.
The customers for this test will be employers who want to know it is safe for specific workers to go back to work. Hospital organizations are the most obvious customers while other organizations may value it as a way to get people back to the job who are minimally at risk for contracting COVID-19, he said.
The test is being sold to customers overseas and the company is hoping to have approval to sell it in this country, Irani said.
The company on April 1 said it entered two deals to license technology from the Icahn School of Medicine at Mount Sinai in New York, the country’s epicenter for the outbreak.
Biomerica will use the school’s technology to scale up and manufacture a laboratory version of the serological test.
This test uses a format called ELISA microplate that can run on existing open system equipment found in most hospitals and clinical laboratories in the United States. The non-exclusive license agreements provide for royalty payments to Mount Sinai.
Race to Test
Irvine-based Biomerica Inc. is not the only local company focused on a diagnostic test for the novel coronavirus.
• Brea-based Beckman Coulter Inc. has designed its own coronavirus test using IgM and IgG antibody tests that have been submitted to the Food and Drug Administration for an Emergency Use Authorization (EUA). The antibody test is different from other standard tests in that it can determine past exposure or the time frame of current exposure.
“This test also could allow those without immunity to be identified and kept safe until the pandemic subsides” Chief Medical Officer Shamiram Feinglass said in a press release last week.
• Irvine-based Fluxergy LLC has designed a PCR-based nasal swab coronavirus test that can deliver results in an hour at most hospitals and urgent cares with a lab facility. It submitted its EUA to the FDA last Monday after passing its validation tests conducted by Davey Smith, M.D., head of the UCSD Division of Infectious Diseases and Global Public Health.
• Irvine-based Innovative Health Diagnostics is offering private corporations COVID-19 testing through gold standard PCR-based nasal swabs. IHD also provides its clients with antibody testing. They come to your place of work where the testing is performed by a certified medical professional.
Samples are processed in a CLIA and FDA-certified laboratory, with results in 3-4 business days. The company test has received EUA.
IHD was founded in 2010 and also provides fertility and comprehensive clinical testing to patients all over the country.
—A. Leigh Corbett
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