For a Fredericton life sciences company dating back more than two decades, the pandemic has offered an opportunity to reinvigorate its business and venture into the lucrative world of diagnostic medical testing.
LuminUltra was already an innovation success story. Since its founding in 2003, based on technology that had been in development since 1995, LuminUltra has carved out a market for itself as a maker of bacteria and virus tests for wastewater and industrial facilities.
Last spring, when Prime Minister Justin Trudeau asked Canadian industry to bring its resources to bear on the fight against COVID-19, LuminUltra answered his call. The company began making diagnostic testing kits for SARS-CoV-2, and its business ballooned.
“I was (previously) adamant that we would never get into the clinical diagnostic testing space, because we believed we had a fairly renowned brand presence in the applied diagnostic sector,” said CEO Pat Whalen, who has led the company since 2009. “But when the pandemic made its way across to North America back in March of 2020, we all kind of realized that this was going to be a very, very big deal.
“So, we took a look at our capabilities, at the role that we might be able to play in helping combat the pandemic.”
Until this year, LuminUltra’s main business was to manufacture pathogen testing kits in Fredericton and Baltimore, which it sold to customers around the world. Its clients ranged from oil refineries to toilet paper manufacturing plants.
More than 90 percent of its clients are outside Canada, and about 95 percent of them administer the tests themselves. The five percent that ask LuminUltra to administer tests collect samples and mail them to the company’s facilities in Fredericton or Miami.
Before COVID-19, LuminUltra had about 70 employees, spread across Canada and the United States. Now, with increased revenue and an addressable market larger than anything Whalen’s team has encountered before, the company has grown to about 150 people.
More than 25 million of LuminUltra’s SARS-CoV-2 tests have been administered across Canada, with the federal government being a key customer. And none of those millions were rapid tests. Whalen said LuminUltra has decided to focus on high-end laboratory testing.
“Our area of expertise is around gold standard testing,” said Whalen. “It’s the tests that everybody has always been doing and will continue to always do -- tests that are done in laboratories by trained professionals with sophisticated equipment.”
Despite scaling up its business, LuminUltra has not had to complete a conventional funding round to finance its growth. In fact, since 2016, all of its financing needs have been covered by an ongoing deal with Toronto-based private equity firm XPV Water Partners.
Now, LuminUltra plans to branch out into other forms of human diagnostic testing. Whalen said the addressable market for human testing is at least an order of magnitude larger than his team’s usual market. The wastewater and industrial testing will continue, but will represent a smaller proportion of the company’s overall business.
And with new strains of COVID-19 emerging and the vaccine rollout grindingly slow in many countries, Whalen said he expects a robust coronavirus testing market for years to come.
When the pandemic finally does subside, he foresees governments investing more heavily in infectious disease monitoring, with LuminUltra standing ready to help.
In the wake of previous pathogen scares, such as the original version of SARS, many governments briefly ramped up their infectious disease spending, but subsequently scaled it back in the 2010s. But Whalen said that LuminUltra’s focus on international sales will help insulate the company against that risk.
“It’s going to be about staying ahead and making sure the next epidemic or pandemic doesn’t catch us by surprise,” he said.