Chembio settled its legal disputes and found a marketing partner for its recently approved rapid HIV tests in a three-party agreement announced Oct. 5.

Under the deal, Inverness Medical Innovations will be the exclusive worldwide distributor of Chembio's Sure Check HIV 1/2 test and will have exclusive U.S. marketing rights for its HIV 1/2 Stat Pak .

In addition, Inverness co-led a Series C financing round for Chembio with a $2 mil. investment, announced the same day. The financing round totaled $8.15 mil.

As part of the marketing arrangement, Chembio and StatSure Diagnostic Systems have agreed to end their patent disputes over the "barrel" technology used in the Sure Check test and will split the profits from Sure Check and any future HIV test using that technology. Chembio will remain the exclusive manufacturer of such products.

The barrel technology refers to a sampling mechanism by which the blood from a patient's finger prick is absorbed directly into the test through a capillary tip, thus removing the need to transfer the sample to the test with a pipette or other device.

According to Lawrence Siebert, Chembio's CEO, the three-party agreement with Inverness and StatSure was necessary to move forward into the HIV test market.

Between 2001 and 2003, Chembio had an arrangement under which it paid royalties to StatSure (then Saliva Diagnostics Systems) for any barrel-type tests that it manufactured.

Following a business dispute in 2003, StatSure indicated it would move its manufacturing to a different partner, at which point Chembio determined that it could continue to manufacture the product without infringing on StatSure's barrel technology patent, Siebert said.

Chembio began FDA clinical trials for Sure Check and in 2005 submitted PMAs for both it and the Stat Pak test, which relies on a different sampling technology.

Meanwhile, StatSure cried foul, alleging patent infringement.

According to Siebert, the issue came to a head when Chembio began discussions with potential marketing partners upon FDA approval for the products in May 2006 (¹ Also see "Chembio Joins The Race For Over-The-Counter HIV Test" - Medtech Insight, 12 June, 2006., p. 21).

StatSure was pursuing its own barrel-type HIV test, and "everybody agreed that had we continued to litigate, there would be the possibility that there would be more than one barrel-type product on the market," Siebert told "The Gray Sheet."

"Inverness would not have been interested in marketing a product where there was going to be another look-alike in the market," he explained.

Firm Anticipates CLIA Waivers Soon

Chembio applied for Clinical Laboratory Improvement Amendments (CLIA) waivers for Sure Check and Stat Pak in July. The waivers, still pending, will allow the firm to enter the public health arena and market the tests to doctors' offices and clinics.

Orasure ( OraQuick Advance ) and Trinity ( Uni-Gold Recombigen ) currently market the only CLIA-waived rapid HIV tests.

Inverness and Chembio plan to launch the Sure Check and Stat Pak in the U.S. by early next year, with the hope that the tests will be CLIA-waived by then.

The firm is optimistic that new guidelines from the Centers for Disease Control & Prevention will boost the tests' uptake. The guidelines, released Sept. 21, support HIV screening for all patients age 13-64 as part of routine medical care (² Also see "CDC Guidelines Will Expand HIV Testing If Physicians, States Follow Lead" - Medtech Insight, 25 September, 2006., p. 16).

Chembio also has a new, patent-pending Dual Path Platform in development upon which it intends to create another HIV test. That diagnostic could use oral fluid, as opposed to blood samples, and incorporate other added features, but there is "nothing definite at this point," said Siebert.

Currently, Orasure's HIV test is the only product approved for oral fluid testing.

- Chloe Taft

Chembio Clears Path For HIV Tests With Patent, Marketing Agreement

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