OraSure Technologies, Inc. - Company Profile, Information, Business Description, History, Background Information on OraSure Technologies, Inc.

220 East First Street
Bethlehem, Pennsylvania 18015

Company Perspectives:

Create, combine and collaborate to be the world's best oral fluid dia gnostics company. Deliver superior diagnostic solutions through the u se of the most user-friendly and technologically advanced sample coll ection, detection and information technologies. Be entrepreneurial, b uild a culture based on our Core Values, and exceed Stakeholder Expec tations.

History of OraSure Technologies, Inc.

OraSure Technologies, Inc. is the leading supplier to the life insura nce industry and public health markets of oral fluid collection devic es for the detection of antibodies to HIV. OraSure is a company that develops and manufactures medical devices and diagnostics. Using thei r four-platform technologies, OraSure provides an ever growing number of diagnostic capabilities, including tests for HIV and drugs-of-abu se. These medical diagnostics are built for and marketed to physician 's offices, clinical laboratories, workplace sites, insurance compani es, public health agencies, and criminal justice and drug rehabilitat ion agencies. OraSure's primary focus is the oral fluid, point-of-car e market. The company is striving to improve the current methods of t esting and provide ways for conducting tests by using oral fluid samp les that return results in a matter of minutes.

Early Beginnings: 1979-93

Epitope, Inc. was an Oregon-based company that focused on oral fluid diagnostics specifically for the detection of HIV infection and for d rugs of abuse. Epitope was formed as a private company in 1979, as Im munologic Associates, and became a public company in 1986, mainly in order to raise money for AIDS research. Prior to becoming a public co mpany, Epitope's main funding came through private stock placement an d research contracts. Through its initial offering, Epitope raised ov er $2.7 million in cash, which was used to finance development of a more reliable way to test for the AIDS virus.

In 1989, Epitope reported that it had developed technology for an ora l fluid-based, rather than blood-based, diagnosis of infectious disea se, allowing for rapid "on-the-street" testing. The Food and Drug Adm inistration (FDA) approved a request by Epitope to begin human testin g of an oral fluid-based HIV test in 1990. The system from Epitope in cluded an oral fluid collection kit called "OraSure" that would colle ct an oral fluid called oral mucosal transudate (OMT) from the mouth. OMT contains large quantities of antibodies and is free of many of t he contaminants that saliva contains. Specimens would be taken from b etween the gums and cheek; the sample was then placed in a tube and s ent to Epitope's laboratory for results. The company cited the conven ience of using oral fluid as opposed to blood-based tests. Although t he actual product lacked full FDA approval and the company had yet to make a penny, its stock was valued at $160 million on the Americ an Stock Exchange.

Approval Granted: 1994-97

In 1994, after a three-and-a-half year journey, Epitope finally recei ved FDA approval for its oral fluid collection device, OraSure, speci fically to be used for the detection of the AIDS virus. OraSure becam e the first medical diagnostic test of its type to be approved by the FDA for use in disease detection. The company projected that it woul d sell a million products monthly, with the cost being $2 to &#36 ;4 per unit, a fraction of the cost of blood tests. However, because the oral fluid test was far less accurate than a blood test, the FDA outlined that the test would only be available through physician's of fices and administered by trained personnel. Under the guidelines for approval, the FDA stated that the test could not be administered at home and could not be used to screen donors. Epitope acknowledged tha t the test was not as accurate as a blood test but stated that its ho pe was that the test would broaden HIV testing and help people to bec ome aware of their AIDS status earlier. Now that FDA approval had bee n received, the question was whether Epitope could begin to make a pr ofit.

Epitope concluded an exclusive licensing agreement with SmithKline Be echam Consumer Healthcare, one of the world's largest healthcare comp anies, in 1995, for distribution of OraSure. Unfortunately Epitope ex perienced a major loss and stocks hit a new low in the fall of 1995. This was due largely to SmithKline Beecham's reluctance to heavily ma rket the oral fluid device. SmithKline cited the need for a confirmat ory test prior to seriously distributing the test. An oral confirmato ry test would allow for the use of the same sample when doing a secon d test for patients who tested positive for the HIV virus. Without an oral confirmatory test, patients would need to undergo a blood test in order to confirm a positive result.

In 1996, the first oral HIV antibody confirmatory test was approved b y the FDA, making a single oral fluid sample adequate for the prelimi nary test and confirmatory tests in samples that tested positive for the HIV antibody. SmithKline Beecham announced plans to begin heavily marketing the OraSure test to health professionals and the insurance industry. By 1997, sales of the oral fluid diagnostic test had doubl ed, following an article in the Journal of the American Medical As sociation (JAMA) that declared OraSure's convenience and comparab ility (with regards to accuracy) to blood testing. In the fall of 199 7, attempting to recover from damage incurred during problems with it s Agritope subsidiary, Epitope reacquired the OraSure diagnostic from SmithKline Beecham. Epitope announced that it would market the diagn ostic through the use of its own distribution channels.

Promising Agreements and New Developments: 1998-2000

The year 1998 brought several new agreements with marketing companies . First there was an agreement with LabOne, Inc., a company that mark eted clinical, substance abuse, and insurance laboratory testing serv ices. The agreement was for LabOne to provide oral testing for the HI V antibody to customers in the public health, corrections, military, and college health markets using the OraSure device. Second, Epitope made an agreement with Altrix Healthcare, plc, a U.K.-based medical d iagnostic provider. The agreement was that Altrix would be responsibl e for the marketing and sales of OraSure in the United Kingdom and Ir eland. Under the terms of the agreement, Altrix was required to meet minimum sales goals in order to maintain the relationship with Epitop e. Having succeeded in increasing product sales, Epitope reported rec ord product revenues and a small profit in late 1998.

Late 1998 also brought another agreement and a variation on the use o f the OraSure fluid collection device. Epitope announced a five-year supply and distribution relationship with STC Technologies, a private ly held company that developed and supplied medical devices and clini cal lab products for use in workplace testing, clinical labs, and phy sician's offices. Under the terms of the agreement, Epitope's OraSure device would be packaged with STC's substance abuse tests. The kit w ould be called "Intercept" by STC. Epitope would be the exclusive sup plier of its collection device for use with STC's drugs-of-abuse test s in the United States and Europe, excluding the United Kingdom and I reland. In turn, STC would be the exclusive distributor of the substa nce abuse tests in the same area. The agreement stated that Epitope w ould sell the OraSure device at a per-unit price to STC. Epitope woul d then receive a percentage of STC's gross revenue from the resale of the Intercept substance abuse tests. It would also be entitled to a percentage of any of STC's revenues that occurred from any future rel ated activities where the OraSure device was incorporated. This colla boration of Epitope's OraSure oral fluid collection device and STC's drugs-of-abuse tests was considered by both companies to be an ideal one, convenient and less invasive for employers and employees without sacrificing accuracy.

Early 1999 brought the formation of an alliance between Epitope and t wo of its partners: STC Technologies and LabOne. LabOne agreed to pro vide oral fluid analysis of STC's Intercept substance abuse tests (wh ich were performed using Epitope's OraSure oral fluid collection devi ce). STC voiced excitement over the alliance, saying that it was an i mportant step necessary to truly market the Intercept device. LabOne also appreciated the relationship, stating that the market was contin uously attempting to find ways to improve the collection of samples. In turn, sales of Epitope's OraSure collection device were sure to in crease, thereby increasing revenue.

The year also brought an agreement with Organon Teknika, Ltd., of Dub lin, Ireland, to work together on the final development of OraQuick, Epitope's one-step, rapid-result oral specimen testing kit. OraQuick would allow health providers to supply results to patients within ten minutes, forgoing the use of a laboratory. Organon Teknika touted ex pertise with tests similar to OraQuick and planned to manufacture Ora Quick at its factories in Ireland. Both companies hoped to reach a fu ture agreement for the manufacturing and distribution of the kit upon completion of development.

In the fall of 1999, Epitope reported that it was supplying the OraSu re oral fluid collection device to seven of the top ten insurance com panies in the United States. Those seven companies accounted for 21 p ercent of ordinary life insurance purchased in the United States in 1 998. Epitope attributed that growth to the industry's increased comfo rt with oral fluid testing devices, cost efficiency as compared to bl ood testing, and the non-invasive aspect of the OraSure device.

Also in 1999, Epitope announced that it had received a two-phase &#36 ;1.1 million grant from the National Institutes of Health (NIH) to de velop a test for syphilis using either oral fluid samples or blood sa mples. Epitope hoped to modify the OraSure device so that it could co llect samples for the syphilis test. The addition of a blood-based al ternative would come as a response to Epitope's expression of a need to broaden its product base. Under terms of the grant, the first phas e would include the company reaching certain, outlined goals. The sec ond phase included clinical trials and submission to the FDA for appr oval. The test for syphilis would allow patients to find out a positi ve or negative result quickly, and, if necessary, get treatment soone r.

In early 2000, Epitope, along with LabOne and STC Technologies, annou nced the introduction of Intercept, the first laboratory-based substa nce abuse test that would look for and find illicit drugs in oral flu id samples. The Intercept test was expected to make a large impact in workplace drug testing, with negative results being available within 24 hours of receipt at the laboratory and positive results being con firmed within 72 hours of receipt. In addition, it would also be mark eted to the criminal justice and public health markets. The Intercept drugs-of-abuse test was marketed as one of the most efficient, cost- effective drug testing alternatives available.

An Integration of Technologies; OraSure Is Born: 2000-02

In May 2000, STC Technologies and Epitope announced that they had sig ned a merger agreement. The newly formed company would be called OraS ure Technologies, Inc. and would combine the developers of the foremo st oral fluid collection device and the leaders in oral fluid analysi s. STC Technologies was the owner of the Histofreezer Cryosurgical pr oduct line, a safe, effective means for removing skin lesions, and of the Uplink products, one of which was a point-of-care product used t o detect the use of illicit drugs through oral fluid samples. Joining Epitope's OraQuick rapid fluid assay platform and the OraSure collec tion device along with STC's Histofreezer Cryosurgical and Uplink pro ducts created a four-platform technology that would allow for the com panies to come together to become the world's utmost oral fluid diagn ostic company. In September 2000, the merger was completed.

The new company was off to a running start when, in October 2000, it received the first international order for the OraQuick HIV Rapid tes t. The order was placed by a sub-Saharan African company and represen ted OraSure's push to provide the test to all of sub-Saharan Africa. The company cited the opportunities for OraQuick in that area as bein g enormous and stated that it felt the test was ideal for an area in which an estimated four million AIDS-affected individuals live.

Also in 2000, OraSure announced that it had finished phase one of the NIH grant received in 1999. The NIH approved almost $1 million i n added funding for the oral fluid-based syphilis detection test. The syphilis project focused on developing a device that would both scre en and confirm the result using the OraSure oral fluid collection dev ice. In the future, the company hoped to extend to point-of-care syph ilis testing using its OraQuick test. OraSure intended to use the Ora Quick rapid fluid assay platform, the OraSure collection device, and its Uplink technology to maximize the market coverage achieved from p rojects including the research on syphilis. In this manner, the compa ny hoped to broaden the range of users, extending from lab-based test ing to street corner testing.

Early 2001 brought a new agreement with one of the largest drug testi ng laboratories, Bendiner & Schlesinger, Inc. of New York, New Yo rk. OraSure would be providing its Intercept drug testing system to t he company, which would, in turn, offer the system to the drug rehabi litation market of the New York metropolitan area. The annual revenue from this agreement was expected to reach $500,000 annually. Ora Sure also announced that the FDA had given approval of the Intercept fluid assay for barbiturates and methadone. These new assays would jo in the test panel that already tested for opiates, cocaine, PCP, mari juana, amphetamines, and benzodiazepines. The new clearance would all ow for OraSure to meet the demands of the rapidly growing market of d rug rehabilitation customers.

In 2002, OraSure submitted for and received clearance from the FDA fo r the Uplink test system for detecting opiates in oral fluid. This be came the first oral fluid point-of-care test cleared by the FDA. Upli nk provided instrument-read results in ten minutes and was expected t o increase accuracy and efficiency of drug testing. The company annou nced its intention to submit for the full five-drug panel of assays i n an oral fluid specimen. The drugs in the panel would include cocain e, PCP, marijuana, methamphetamines/amphetamines, as well as opiates.

Advancements in HIV Testing: Late 2002-05

In the fall of 2002, OraSure received approval from the FDA for its O raQuick Rapid HIV-1 test. The test was to be done with whole blood sa mples acquired from a finger-stick, and was cited as being highly acc urate. Clinical studies showed the test to have 99.6 percent accuracy in detecting positive samples and 100 percent accuracy in identifyin g negative samples. The results would be available in about 20 minute s, making it the fastest test of its kind.

Once FDA approval was received, an agreement made in 2002 allowed for Abbott Laboratories, a leader in HIV/AIDS research, and OraSure to b egin co-exclusively distributing the OraQuick Rapid HIV-1 test. Both companies announced the availability of the test to physician's offic es, hospitals, and other healthcare facilities in 2003. The Centers f or Disease Control and Prevention (CDC) created further acceptance an d interest in the product by announcing that it would incorporate the use of the OraQuick test into its new HIV testing initiative. OraQui ck was cited as being a convenient test that could conform to nontrad itional test settings as well as provide rapid results. Further valid ating the test, OraSure announced that the OraQuick Rapid HIV-1 test had received the Gold Medical Design Excellence Award in the "In Vitr o Diagnostics" category in the sixth annual Medical Design Excellence Awards (MDEA) competition.

Furthering its testing capabilities, in 2004 the OraQuick test was ap proved by the FDA to test for HIV-2. The approval allowed for simulta neous detection of HIV-1 and HIV-2 antibodies by using one sample. Al though the instances of infection with HIV-2 were believed to be rela tively low in the United States, HIV-2 testing was part of the requir ed drug testing regimen in many foreign countries. Allowing for simul taneous HIV-1 and HIV-2 testing created an added convenience and quic ker detection and treatment of the viruses. Additionally, the OraQuic k device was approved by the FDA for use in detecting HIV-2 in oral f luid samples. This made OraSure's OraQuick Rapid HIV-1/2 test the onl y test approved by the FDA to detect antibodies to the HIV-1 and HIV- 2 in oral fluid, whole blood, and in plasma samples.

At the beginning of 2005, OraSure continued to be the market leader i n oral fluid technology, signing an agreement with Abbott Laboratorie s to distribute the OraQuick Rapid HIV-1/2 test. The company announce d its long-term goals, namely, moving into global markets, developing more products for point-of-care testing, and seeking government appr oval to sell products, specifically OraQuick, directly to customers w ithout professional assistance. These goals reflected OraSure's commi tment to broadening its product base and constantly looking to the fu ture.

Principal Competitors: Bio-Rad Laboratories, Inc.; Johnson &am p; Johnson; LabOne, Inc.; Laboratory Corporation of America Holdings; Nabi Biopharmaceuticals; Roche Diagnostics Corporation; Schering-Plo ugh Holdings; Trinity Biotech plc; UBS AG.


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