Market for IVD to reach $83.3B

2020 08 10 15 31 8350 Coronavirus Business Graphic2 400

The world market for IVD will reach $83.3 billion in revenues in 2020, according to an upcoming report from Kalorama Information, a sister company of The COVID-19 pandemic has dramatically shaped the market, driving growth for some IVD tests while suppressing demand for others.

Bruce Carlson from Kalorama Information.Bruce Carlson from Kalorama Information.

Kalorama's "Worldwide Market for In Vitro Diagnostics" is the 13th edition of the report and is due to be published August 26. The report reveals that the 2020 market for IVD was substantial and growing, even before the COVID-19 pandemic hit.

IVD tests for cancer and infectious disease detection, transplant success, and pharmaceutical selection have added value to healthcare and improved clinical outcomes. Genetic tests for rare diseases and prenatal assessment are increasingly utilized.

And now, the COVID-19 pandemic has highlighted how important in vitro testing is in a way that could not be imagined last year. Of the total IVD market, $9 billion is estimated to be COVID-19 testing, both molecular and antibody.

Substantial and growing

Prior to the COVID-19 pandemic, the IVD market was substantial and growing, and that portion of the market is estimated to reach $74.3 billion dollars. Growth areas apart from COVID-19 include other infectious diseases (particularly respiratory pathogens), liquid biopsies, companion diagnostics, and critical care and hematology tests.

Some areas of in vitro testing have been negatively affected by the pandemic, however. These include noninfectious disease immunoassays, diabetes, and histology/cytology tests, which originate with doctor visits. Doctor visits have been impacted by social distancing and lockdowns during the year, though some catch-up visits and resulting tests are expected later in the year and in regions where COVID-19 has had less impact.

IVD tests based on polymerase chain reaction (PCR) make up a disproportionate share of revenue in the market this year, as PCR is the gold standard for COVID-19 detection. Where the most common type of nucleic acid test has represented approximately 10% of the market in past years, in 2020 it has surged to over 19% due to the technology's favored use in COVID-19.

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IVD Market

The IVD market in 2020 compared to prior years. Image courtesy of Kalorama.

Financial results from major IVD vendors in the second quarter of 2020 have produced mixed results reflective of this topsy-turvy market. Sales of COVID-19 tests are brisk, but other test areas were down in volume due to social distancing and reduced physician visits.

This affects different companies in different ways. Quidel, specializing in respiratory tests and point-of-care, announced that second-quarter revenue increased 86% and rapid immunoassay product revenue increased 270%.

Meanwhile, worldwide sales at Abbott Diagnostics took a hit despite the company bringing in about $615 million in revenues from COVID-19 diagnostic testing during the second quarter of 2020 (end-June 30). The company reported sales dropped 8.2% to $7.3 billion in the second quarter of 2020.

Finally, Bio-Rad Laboratories also experienced a setback, reporting in its second quarter that the COVID-19 pandemic negatively impacted its revenue by 6.2%. How well these players perform in the full year will depend on their ability to capture test volumes from reopenings of offices and hospitals.

Molecular diagnostics will continue to drive growth in the IVD market, according to the Kalorama report. In 2019, there was still a degree to which vendors were persuading laboratories of the benefits of molecular approaches. In 2020, the challenge has been how fast systems can be set up and how much throughput they can offer as a war room-like mentality sets in at major IVD companies and the labs they service.

Real-time PCR systems have been highly utilized and supplies strained. Polls of labs even in July 2020 were still showing supply shortages.

New companies help to drive growth and 2020 is certainly no exception. There has also been a huge influx of product introductions from small, obscure companies. These have mostly targeted the low end of the price range and often had poor performance, while a small number of high-end automated systems are mostly limited to certain segments of the market, such as independent reference laboratories and centralized hospital laboratories.

Low-quality products from fly-by-night companies are the predictable result of shortages and the relatively basic resources needed to produce mediocre antibody test kits with a low level of quality control. However, according to most sources, the leading companies such as Abbott, Roche, Cepheid, DiaSorin, Hologic, Thermo Fisher Scientific, and Quidel currently account for the majority of the COVID-19 tests being performed in the U.S.

How long will this surge in revenue last? Kalorama analysts speculate that testing COVID-19 continues well into 2021, but it is too early to tell. A vaccine, or a global reduction in cases due to virus pass-through of the population, could theoretically reduce test IVD volumes, but it is not likely to eliminate the need for COVID-19 testing in its various forms.

The effect of the publicity that IVD has received as a result of the COVID-19 pandemic is difficult to measure but should pay dividends down the road, particularly with more serious preparation for new infectious disease threats. Machines designed for COVID-19, such as Abbott's ID Now or Cepheid's GeneXperts, may be removed from labs if the threat is perceived to have passed, but most likely systems will be converted to other purposes. This presages strong continued growth in testing and IVD test supplies.

Bruce Carlson is the publisher of Kalorama Information, part of Science and Medicine Group.

Disclosure: is a sister company of Kalorama Information.

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