Capital Markets Media Inc.: XPhyto expands infection prevention offering with new acquisition
Life sciences company XPhyto Therapeutics has recently acquired 3a Diagnostics in a bid to advance its infection-prevention solutions.
The move is the latest development in XPhyto’s strategy to become a global leader in the disease detection market. 3a Diagnostics, based in Germany, is recognised worldwide for its medical innovations in disease detection.
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With a focus on the burgeoning multi-billion-dollar disease detection market, XPhyto has just taken a major step towards becoming an industry leader, beginning with the German market. This is Europe’s most populous nation, which benefits from one of the highest per capita rates of regular testing in the world.
XPhyto has announced the acquisition of Stuttgart-based 3a Diagnostics GmbH – a world-leader in developing disease-detecting medical innovations – in an all cash transaction.
Until now, 3a has acted as an exclusive joint venture collaborator in the development of COVID-19 screening diagnostics and other disease-detecting technologies for the European market. It also owns all the intellectual property (IP) for these innovations, which were licensed to XPhyto for commercial use.
Now that the acquisition of 3a has been announced, the process of bringing the company’s disease-detecting biosensor technologies to market will begin in earnest, according to XPhyto’s Germany-based COO, Wolfgang Probst.
3a is a commercial enterprise facility that is singularly focussed on the diagnostics and biosensor markets, having developed plenty of expertise in developing point-of-care screening systems over the past decade.
Probst says XPhyto is already successfully leveraging 3a’s proprietary skill set with the recent commercial launch of what may be the world’s fastest portable PCR (molecular) diagnostic testing system for COVID-19.
Why the Biosensor Business is Booming
3a has developed a pipeline of peptide-based biosensor screening tests for bacterial and viral infectious diseases – which is a burgeoning multi-billion-dollar market segment.
These biosensors are a combination (chemical conjugate) of a pathogen specific peptide and an extreme (but safe) bitter compound. When the peptide is exposed to specific bacterial and viral enzymes, this triggers biosensor activation and the release of the extreme bitter-tasting compound, alerting the user to presence of a specific pathogen.
This oral screening technology is designed to instantly detect a variety of bacterial and viral infectious diseases. 3a’s development pipeline includes biosensor products for influenza A, stomatitis, periimplantitis, periodontitis, and group A Streptococcus.
Even though biosensors may not seem like a familiar term to many readers, it will not remain that way, much as the term coronavirus has become commonplace.
To this point, the market valuation of biosensors is expected to reach $42 billion by 2027, according to the Delaware-based market intelligence firm Global Market Insights (GMI). This would effectively nearly double biosensor marketplace in size within a few short years.
“Increasing numbers of product launches, coupled with rising adoption of novel biosensors will stimulate the global market expansion,” GMI states in a recent research report.
“Early and precise disease diagnosis is essential for the timely prognosis and the survival of the patient. In recent years, the demand for disposable, cost-efficient, and user-friendly devices with fast response time has extensively increased.”
XPhyto’s stated goal is to develop rapid, low-cost, easy-to-use pathogen screening tests for pandemic and other health applications throughout Europe and the Middle East. To this point, XPhyto is integrating 3a’s biosensor technology into its own proprietary oral drug delivery platform, creating ultra-low cost oral dissolvable screening tests.
Global Market says that biosensors are expected to take on an increasingly integral role in containing and curtailing outbreaks of disease.
“Biosensors have emerged in several fields such as diagnosis, patient health monitoring, detection of disease, and human health management, that will further aid in paving robust growth opportunities in the future,” the report also says.
“Their role in fighting coronaviruses cannot be overstated either, according to Global Market. “COVID-19 has positively impacted the global biosensors market…These advanced biosensors are employed not only for real-time COVID-19 detection but also as a global screening tool to address control, surveillance, and preparedness in the event of future outbreaks.”
Covid-ID Lab: A PCR test disruptor
Earlier this year, XPhyto launched Covid-ID Lab in Germany as a commercial in-vitro diagnostic (CE-IVD) test – one that is registered within the European Union. This portable point-of-care PCR testing system makes possible fast, highly accurate testing in a diversity of real-world settings.
It effectively decentralizes the whole testing process, making it logistically possible to provide on-site testing and results at numerous locations simultaneously.
Taking only 25 minutes to generate a definitive diagnosis, this portable Covid-ID Lab has the capacity to simultaneously process up to 96 test samples within 25 minutes, depending on the equipment and staffing.
According to Probst, Covid-ID Lab’s differentiating appeal is its uniqueness.
“Covid-ID Lab is a specialized product that is designed to fill the market gap between disposable antigen tests and centralized automated PCR systems,” he said.
“Examples of target customers are airports, cruise lines, pharmacies, medical clinics, and any industrial or education site that requires rapid, definitive results. It is also ideal for pop-up testing centres. In fact, with our technology, we expect to be able to run small satellite labs. This opens up many potential testing labs throughout Germany.”
Probst explains why he believes Covid-ID Lab is a superior product to widely-used lateral flow assay antigen tests.
“Our tests find coronavirus-infected people before an antigen test can, which only kicks in when a higher viral load is reached. As a result, many people with the disease have a negative test, feel safe, go shopping and spread the virus in the process.
With XPhyto’s test, the genetic material of the viruses is amplified to such an extent that SARS-CoV-2 can be detected even if only small amounts are present. This is how PCR works and why it is the diagnostic standard.”
Probst expects that this test will have strong adoption in densely populated metropolitan areas and at transportation hubs such as train stations and airports where the need for rapid, accurate and cost-effective tests is high.
According to Professor Ali Mokdad from the Institute for Health Metrics and Evaluation (IHME) at the University of Washington, “We’re not going to reach herd immunity. It’s going to be seasonal, and it’s going to be like the flu, and we’re going to need to be ready for it.”
It is therefore no surprise that the market for coronavirus testing is growing exponentially. By the estimation of Allied Market Research, it is likely to grow by almost 9% per annum until 2023, swelling to $39.1 billion.
The key takeaway here is that the widespread adoption of ultra-fast, ultra-reliable PCR testing at a wide diversity of point-of-care settings, including pop-up facilities, could be critical to helping break the chain of transmission. It will also prove helpful in monitoring the effectiveness of the vaccines that are being widely administered in Europe and North America.
Taking Rapid Testing to the Next Level
In recent months, the go-to protocol for fast COVID-19 testing in real-world situations has been antigen testing – a fast and inexpensive test that relies on a nasal swab or sample of saliva.
The drawback to antigen tests is that they have been shown to generate substantial false positive readings, as well as a smaller percentage of false negatives. However, they had generally been considered as a first line of defence and better than nothing by some European health authorities.
In the UK, the government has run out of free lateral flow tests due to continued strong demand. Similarly, in Germany, lateral flow tests have become ubiquitous with millions of tests being conducted every day. However, the opportunity to make these tests more effective and more reliable is something that has Probst excited.
Indeed, as countries tentatively re-open their economies, there is growing consensus that rapid PCR testing in point-of-care settings, as well as rapid, self-administered screening, will both be integral to keeping economies open while still protecting the world’s population – particularly vulnerable citizens.
By being able to test, trace and quarantine anyone who is sick, health authorities should also be able to break the chains of transmission and finally bring COVID-19 infection rates and their variants under control.
XPhyto expects to play an important role in taming the pandemic in Europe and elsewhere. At the same time, it also aims to facilitate the early detection of many other bacterial and infectious diseases with its enzyme-based biosensor technologies.
The acquisition of 3a Diagnostics promises to further heat-up XPhyto’s story, which is why this enterprising start-up is already being closely followed by Germany’s media.
The best source of information about XPhyto is the company itself, SEDAR or CSE profile pages for regulatory filings and news releases.
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ABOUT THE AUTHOR: Marc Davis has a deep background in the capital markets spanning 30 years, having mostly worked as an analyst and stock market commentator. He is also a longstanding financial journalist. Over the years, his articles have appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, The Times (UK), Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post, AOL, City A.M. (London), Bloomberg, WallStreetOnline.de (Germany) and the Independent (UK). He has also appeared in business interviews on the BBC, CBC, and SKY TV.
Marc is also an enthusiastic investor in XPhyto Therapeutics and his commentary is not intended to be a solicitation for other investors to purchase this stock. Investors are always advised to consult a professional investment advisor before making investment decisions.
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