Oxford Immunotec and Tuberculosis Blood Tests
According to an article by Fierce Biotech, 2013 has been a hot year for biotech IPOs with a total of 39 biotechs having gone public so far this year, raising close to $3 billion and displaying the best IPO year for the biotech industry since 2000. Yesterday yet another biotech company, Oxford Immunotec, debuted their IPO which at the close of trading was up 28% from the IPO price of $12 per share giving the Company a market cap of around $250 million.
Founded in 2002, UK based Oxford Immunotec (NASDAQ:OXFD) has received around $107 million in funding from the likes of Invesco Perpetual, Imperial Innovations, Wellington Partners, Draper Fisher Jurvetson, and Dow Chemical among others. The company is a global business with over 140 employees on three continents with 1,000 active customers in over 40 countries with 50% of their revenue derived from outside the United States for the year ended December 31, 2012.
Immunotec’s proprietary T-SPOT® technology platform allows them to measure the responses of specific immune cells, known as T cells, to inform the diagnosis, prognosis and monitoring of patients with immunologically controlled diseases. The Company’s first product is, T-SPOT.TB, a tuberculosis (TB) blood test that targets a combined market size of 50 million tests annually, 90% of which are currently performed using the 100-year-old Tuberculin Skin Test (TST).
The test is protected by 12 issued U.S. patents and more than 20 issued patents in other jurisdictions which are either owned or licensed. Some of the problems of the traditional TST test include variation in reading test results, multiple patient visits required, false negatives, false positives, and potential scarring, all of which are mitigated by using the T-SPOT.TB test which is cheaper and requires no special lab equipment. Oxford Immunotec estimates the potential market opportunity of their T-SPOT.TB test to be well in excess of $1 billion. The Company is also focusing on assays that would help transplant physicians better manage patients at risk of rejection and infection, a market opportunity they believe could be as high as $500 million annually.
The Company’s revenue increased by 86% to $17.8 million for the six months ended June 30, 2013 compared to $9.6 million for the same period in 2012. The company has a large potential market opportunity for the T-SPOT.TB test, however they are not alone as Quest Diagnostics also has an approved blood test for TB, QuantiFERON. Strong revenue growth each quarter will be a good indicator as to just how successful they are in displacing the widely used 100-year-old TST test and competing against Quest. It will also be interesting to see how quickly they move to diversify into other varied applications of their T-SPOT technology.
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