By Mak Yuen Teen

On April 26, I published an article called “Battling Disclosure Viruses” on this website where I discussed the placement of shares by Biolidics in March and its disclosures between March and April about its COVID-19 rapid antibody test kits. Coincidentally, later that same evening, the company published its responses to another set of SGX queries and its answers to questions posed by shareholders and SIAS for its AGM.

In addition to looking at the issue of the placement by Biolidics in March and its disclosures, I have also been trying to determine who actually developed its test kits and the potential market for its products. In terms of who developed it, Biolidics itself in its announcements or press releases has not to my knowledge claimed that it developed it. It only uses terms like “launching” its test kits or signing an agreement with a kit manufacturer (in some sources, named as Nanjing Vazyme). When SIAS asked about the value it is adding for the test kits given that they are manufactured in China, it replied that this information is commercially sensitive.

On Nanjing Vazyme’s website, I found that Nanjing Vazyme holds the certificate for the test kits and it covers “design and development, production and distribution”, which would seem to confirm that Nanjing Vazyme, and not Biolidics, developed it.

But there is some conflicting information out there. Biolidics happens to be an NUS startup established in 2009. NUS on its website publicised the test kits under “Research – Impact”, which would suggest the Biolidics developed it as research should not be just distributing (or even manufacturing) a product. I also found a Nas Daily video promoting the kit on a Facebook page which seemed to be linked to NUS, which said that Biolidics developed it.

Based on the documentary evidence I found, I believe the test kits are clearly developed by Nanjing Vazyme.

I was watching CNN a couple of days ago and there was an interview with the CEO of Roche, the giant pharma company. He was talking about the Covid-19 tests based on blood draw that they are producing – the plan was to have 100 million tests by the end of the year. He also mentioned how such tests are more accurate than finger prick tests, which are what the rapid test kits are.

So the market is changing very quickly and getting more competitive by the day. There are many reports about the lack of reliability of rapid antibody test kits and concerns about unapproved ones. While Biolidics test kits made by Nanjing Vazyme in China are approved for export, as of April 2, 2020, there were 19 approved exporters for the various types of antibody test kits just from China alone.

Most countries have taken a relatively liberal approach to allowing these test kits to be sold, and provisional authorisation or approval is granted quite quickly by relevant authorities in various countries. So while the kits can be sold in an increasing number of markets, the relatively liberal approach by authorities will also accelerate the entry of new players and products.

From my research, it looks like Biolidics is able to sell its test kits, either under the “Biolidics” or “Vayzme” brand, in Singapore, Philippines, Hong Kong, EU and US so far. Nanjing Vazyme’s website shows that Biolidics is the “exclusive agency” for the test kits in Singapore and Philippines. There is another company which is listed as “exclusive agency” for Indonesia. There was a question from shareholders as to whether Biolidics has applied for approval for its test kits in Indonesia. The  company said it has not but will keep shareholders updated about developments in Indonesia. It would seem Indonesia is out of bounds for the company at least for now.

For EU, Biolidics disclosed that it has obtained the “CE marking”. However, since Nanjing Vazyme disclosed other “agencies” for various EU countries on its website and Biolidics is not named among the agencies (exclusive or otherwise), it does not appear that Biolidics has exclusivity for EU.  Nothing is mentioned for Hong Kong on Nanjing Vazyme’s website but it would be surprising if Biolidics has exclusivity there.  Biolidics has a 3-year non-exclusive agreement with CK Life Sciences, Inc. in Hong Kong for the latter to distribute its kits.

As for US, it has an “exclusive distribution” agreement with Aytu Bioscience, which has committed to buy 1.75 million kits within the first 3 months from Biolidics. However, prior to this, Aytu had imported test kits from China which were not approved for export and it is now facing possible class action there. After the announcement of the “exclusive distribution” agreement, Aytu announced on April 30 that another 500,000 test kits (separate from the deal with Biolidics) that it had ordered from China, which had been held back by a shipment delay, are on their way. Therefore, while Aytu has an exclusive distribution agreement with Biolidics, it does not appear to preclude it from ordering similar test kits directly from China.

One thing that has not been disclosed so far by Biolidics are revenues and profits that can be expected from these test kits. Based on searches I have done, I have seen prices mentioned in online marketplaces and news media reports that are as low as about S$4.50 each, and reports that a test administered at point of care may be US$25 per test.

The fact is that we just don’t know if these test kits will be profitable given the highly competitive market and the fact that Biolidics is just one player in a COVID-19 rapid test kit value chain where (a) it appears that it is neither the developer nor the manufacturer, (b) it is also not an exclusive agent in most countries, and (c) its distributors may be able to distribute similar products produced by competitors.

I have attached an illustration of Biolidics’ role in the value chain for the Biolidics/Nanjing Vazyme Covid-19 rapid test kits  based on my research so far. This is just one of the many value chains in an extremely crowded market out there.

Download (PDF, 750KB)

Copyright: Mak Yuen Teen