Disease detection is at hand Test kits: Local firms are finding a healthy market for on-the-spot diagnosis devices, a lab at the touch of a button.

October 30, 1995|By Mark Guidera | Mark Guidera,SUN STAFF

David Trudil holds in the palm of his hand a marvel of medicine, chemistry and technology that has the power to prevent a major health crisis.

It's called a rapid detection or "SMART" kit and it can determine quickly and accurately whether food, water or a person is infected with cholera, a disease that is highly contagious and if not properly treated, deadly.

It also is helping a small, Columbia-based company ring up millions in sales.

These hand-size diagnostic kits, rarely seen by the general public, are growing ever more popular with medical and health professionals around the globe because it allows them to accomplish on the spot what used to take well-equipped laboratories days to determine.

"To a doctor working in a Third World country far away from the nearest medical laboratory, this kit can mean the difference between a major outbreak of disease and quickly getting a handle on it," said Mr. Trudil, vice president of New Horizons Diagnostics in Columbia.

New Horizons, which projects turning a profit on worldwide sales this year of between $2 million and $5 million, is one of less than a handful of Maryland-based companies in the field.

Yet the market for this diagnostic technology is global and could grow into a multibillion industry in the near future, say experts. The potential is attracting some of the world's biggest medical supply companies, such as Abbott Laboratories, that have developed their own rapid detection kits for infectious diseases, including rubella, AIDS and hepatitis.

As a result, small companies like privately held New Horizons are prospering by developing niche markets. More than half the 15-year-old company's sales last year were to the U.S. military, which buys detection kits for anthrax, botulism toxins, and other biological warfare agents.

And Mr. Trudil expects sales to double next year, a milestone that would likely mean the company could double its staff of 25.

Start-up venture Universal Healthwatch, a medical supplies company based in Columbia, also is developing its own line of infectious disease detection kits.

And BioWhittaker, a publicly held medical supply firm based in Walkersville that had $55 million in sales last year, markets a line of rapid detection kits for infectious diseases as well as autoimmune diseases and allergies. BioWhittaker is negotiating the sale of the division that handles its line of infectious and autoimmune disease kits to medical products giant Carter-Wallace so it can concentrate on its cell culture business. The division had sales of $13 million last year.

Philip Rohrer, chief financial officer for BioWhittaker, said the company plans to retain its allergy test kit business, which had 1994 sales of about $6.9 million.

"There's a godzillion guys out there in this market and there's a tough regulatory environment. Everyone's trying to develop a kit that is a little faster, a little cheaper," Mr. Rohrer said.

"To survive you've got to have a niche or partner with one of the bigger players."

One of the strongest emerging market for the kits is countries where medical diagnostics lag behind the United States.

Privately held Universal Healthwatch has targeted cash strapped countries, where the company will accept goods as payment and resell them for cash. Universal recently struck its first deal with a Russian health care company -- a $60 million, five-year deal the firm said will make it profitable in its first year of business.

Company executives say they also plan an aggressive marketing effort in cash-strapped Latin America countries.

"With the globalization of trade and naturally occurring diseases breaking out and moving to new environments, we see a global market for a rapid method of diagnosis and control," said David Bernstein, Universal's president.

Indeed, said Gary Litman, director of trade policy for Central and Eastern Europe at the U.S. Chamber of Commerce in Washington, declining health care and sanitary conditions in countries of Russia mean diseases like malaria and cholera are re-emerging -- and creating sales opportunities.

"There is a huge market for this type of medical technology. There are spots all over Russia and Eastern Europe, which are seeing outbreaks of cholera and other diseases," Mr. Litman said.

Others, like Universal's co-founder and president Dr. Erick Gray, note the re-emergence of cholera in south Texas as evidence that no area of the world is secure.

"The key for us will be to concentrate on getting the cost of the kits down. Anything that costs over $7 isn't going to sell well overseas," Dr. Gray said.

While Universal and New Horizons have targeted the market of medical professionals, they also have their eye on the consumer market.

Executives at both companies hope the Food and Drug Administration eventually will approve their test kits for strep throat for home use; both, however, expect to have to team up with one of the large medical supply companies because of the expense involved in getting FDA clearance.

Mr. Trudil said the market for them in the United States and Japan alone would be "huge -- easily in the millions annually."

Another niche market the firms have targeted is rapid test kits for food and water contamination.

New Horizons has developed a hand-held device that looks a bit like a calculator without the numeral and function buttons, called a micro-luminometer.

A food test technician uses the device by swabbing a small piece of paper-like material over food or kitchen tables and then places the "ticket" inside a small drawer of the micro-luminometer. The device then provides a reading of how much bacteria is present.

Mr. Trudil says the device will be marketed to the food preparation industry.

His most far out target? Test kits that astronauts could take with them to quickly detect illness while on their journeys in space.

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