OraSure tacks on another $109M in DOD funding to churn out rapid COVID tests

After a steep drop in COVID-19 cases in the U.S. earlier this year sent test makers scaling back production of their rapid antigen and PCR offerings, they’re now scrambling to catch up with the sudden increase in testing demand caused by a simultaneous rises in cases and widespread returns to in-person work and school.

That mad dash is being helped along by the federal government. So far, it has doled out hundreds of millions of dollars to support diagnostic developers’ manufacturing costs.

Among the recipients is OraSure Technologies, which was recently awarded a $109 million federal contract to boost production of its InteliSwab rapid antigen COVID tests. The funds were allotted by the U.S. Department of Defense in coordination with the Department of Health and Human Services (HHS).

With the contract, OraSure will be able to increase its manufacturing output by an additional 100 million tests per year by March 2024. It’ll do so by retrofitting one of its existing Pennsylvania facilities with the necessary equipment to ramp up production and by opening a new facility in a still-undetermined location.

The added capacity will build on OraSure’s ongoing, internally funded efforts to reach a production level of 120 million tests per year by the second quarter of next year. Originally, when the InteliSwab tests received emergency clearance from the FDA in June, the company said it was able to manufacture 55 million tests annually and outlined its goals to bump that up to 70 million by the third quarter of this year.

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The three-part emergency use authorization made OraSure’s tests available for both over-the-counter and prescribed at-home use as well as in point-of-care settings. Each test stick includes a built-in swab that, after collecting a sample from the inside of a patient’s nose, is inserted into a pre-measured solution included in the kit. The test result is displayed on the stick within about 30 minutes.

A clinical study of the test kit that compared its performance to that of a “gold standard” PCR test found InteliSwab detected positive COVID cases 84% of the time, comparable to other rapid antigen tests. Meanwhile, its negative test results agreed with those of the PCR test 98% of the time.

“Home testing options prevent the risk of further spread of the virus and minimize the burden on the individual, making them an ideal cornerstone of any national pandemic preparedness strategy,” said OraSure CEO Stephen Tang, Ph.D. “As a company we stand ready to aid in the government’s efforts to allow individuals to return to work and school safely. Beyond that, this funding will allow OraSure to respond to future public health crises.”

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OraSure and InteliSwab have been helped along by the government since the earliest days of the pandemic. In April 2020, the company received its first dose of federal funds, locking down $710,310 from the HHS’ Biomedical Advanced Research and Development Authority (BARDA) to develop a rapid, at-home COVID test for regulatory approval.

More recently, in just the last two weeks, OraSure was allotted about $218 million more in government funding. It's slated for two tranches, beginning with a $205 million contract from the Defense Logistics Agency to supply its tests to up to 25,000 sites throughout the country until September 2022.

That was followed only days later by another $13.6 million from BARDA, which set aside the funds to help OraSure achieve full 510(k) clearance for the InteliSwab tests, ensuring the rapid testing technology’s long-term viability even after the emergency authorizations of the pandemic have expired.