In early March, Salu Ribeiro, the chief executive of Bay Area Phlebotomy and Laboratory Services, a small mobile bio collection company, had serious trouble getting supplies. No masks, gloves, or collection kits — all necessary to test people for a mysterious disease just recently named Covid-19.
It was soon obvious to him: “There’s something wrong with the system.”
The system was not prepared to test people on a large scale because federal regulations demanded specific tests, state guidelines for opening diagnostic labs were rigid, and state and local authorities were hamstrung by a lack of supplies. At that point, California had only tested thousands of people, without the capacity to test significantly more.
Around the same time, Craig Rouskey, a microbiologist, and Gabriel Paulino, a research and development specialist, had just completed a program at IndieBio, a life sciences accelerator near Mint Plaza.
“We were hanging out, having a conversation, and the World Health Organization declared the pandemic ‘the pandemic,’ Rouskey said. “So we were like, ‘Oh, we should really do something about this.’”
Soon after, Rouskey, Paulino, and Ribeiro got together and decided to take on a considerably difficult task: start a testing lab from scratch.
A week later, they named the company Renegade Bio, and now eight months later, it operates its own lab in Oakland with a daily testing capacity of 2,000 and a goal to provide its clients with results in 24 hours.
Renegade Bio is one of several new testing companies that stepped up in the early days of the pandemic to provide much-needed tests for a population that was flying blind into the storm of Covid-19. These companies seemingly appeared out of nowhere — propelled by a little bit of capital and a lot of heart — to provide testing services wherever they were needed in what then seemed a vacuum.
“If there was a coordinated strategy in the state of California that had been able to move quickly on a testing option, we would not exist — there would be no reason for it,” said Tucker Warner, the chief operating officer of Primary Bio, a testing logistics startup founded this spring. “We saw an opportunity to help more communities, and that was birthed out of a void of answers.”
Warner and Andrew Kobylinski, an alum of the digital health startup Better Doctor who took on the role of Primary’s chief executive, teamed up to provide technology and logistics in UCSF’s Bolinas study, a mass testing of 1,800-odd residents in the coastal middle-class town in Marin County. They were just volunteers then, but following the project’s success, the venture capitalist Jyri Engeström, in a “very small funding round,” provided them with capital. Kobylinski and Warner declined to say how much.
Regardless, Primary Bio is providing logistics — registration, sample tracking, and results delivery, to name a few — to more than 250 testing sites in 12 states, including college campuses, private companies, state agencies, school districts, and community testing sites, such as the most recent Thanksgiving testing campaign at the 24th Street BART station.
Primary Bio has been “cash-flow-positive and self-sustaining ever since” the early infusion of capital, Kobylinski said.
Renegade Bio, which formed a partnership with Primary Bio in June, had a similar trajectory — though starting a diagnostics lab from scratch was considerably more strenuous. After starting Renegade as a public benefit corporation in March, the company raised a small amount of capital — about $1.5 million over the course of six months, Rouskey said — to develop its own assay, the process by which scientists test for the virus.
Rouskey’s method would have allowed him to cut processing time in half, but it was not yet approved by the Food and Drug Administration. And Renegade also needed to obtain a Clinical Laboratory Improvement Amendments, or CLIA, license — an arduous process that requires a lab to clear numerous regulatory hurdles.
In the meantime, Renegade took a job in New York in April, during the height of the city’s crisis, and performed testing for the United Nations offices, using the assay developed by the Centers For Disease Control, Rouskey said. But, during the summer, Renegade obtained its license, opened its lab space within UCSF’s Oakland Children’s Hospital Research Institute and now has more than 40 contracts with private companies, including Dandelion Chocolate and the San Francisco Giants.
Rouskey said the company is sustainable.
Joe DeRisi, the president of UCSF’s Chan Zuckerberg BioHub, also started a lab in the early days of the pandemic, called the “CLIAhub.”
He said that starting up a diagnostics lab is difficult, full of regulatory, staffing, legal, engineering, and personnel challenges. But he was surprised and “disappointed” that only a handful of labs sprung up out of the crisis, whether they were private companies or labs grown out of academic institutions, like his own.
“I would have thought we would have seen a dozen or two dozen labs pop up by April, but that wasn’t the case,” DeRisi said. “We’re the heart of biotechnology. There’s more biotech in the Bay Area than anywhere in the world. If anyone can set up a molecular bio testing lab, it’s the people of the Bay Area.”
But, the labs are so few “you can count them on your hands,” he said.
He mentioned Renegade Bio. He also mentioned Color, the molecular biology startup that processes the tests at San Francisco’s two largest testing sites at the Embarcadero and the Alemany Farmers Market. Yet, while Color made a quick pivot into covid testing, it already had a lab and the infrastructure, so it could jump in quickly.
DeRisi also mentioned a relatively new company called Summer Bio, which was founded in August in Menlo Park and raised $7.2 million. The company, which did not make a representative available for an interview, announced in November that it will be able to run 10,000 tests per day by the end of the year.
But aside from the handful of companies and a few labs started at universities like UC Davis and UC Santa Cruz, DeRisi said he’s dumbfounded that California did not see a “tidal wave” of labs launch to provide much-needed testing.
“I wish I knew. I’m really perplexed,” he said. “It’s not like it couldn’t be done. We did it.”
One possible explanation is: “We’re not operating in a government situation where those things are easily funded,” he said.
And in keeping with viewpoints of the other companies, he spoke of a lack of “leadership” at all levels of government that left scientists, community organizations, and even business people to figure things out on their own. The cavalry never arrived, and by and large, efforts have been “grassroots,” he said. “The reason why we spun up in March is the realization that no one is going to help.”
To be sure, the state has vastly ramped up its testing capacity. In total, labs across the state are conducting around 320,000 tests per day, and as of Dec. 22, it had conducted more than 30.1 million tests. In December, approximately 41 percent of those tests were performed by six large laboratories, according to data provided by the California Department of Public Health.
At the top of the list is KorvaLabs, a 4,000 square-foot lab that teamed up with Curative, Inc. in April to provide Covid testing. According to the state, KorvaLabs averaged more than 39,000 tests per day in December. Close behind were Quest, Kaiser’s Southern California Permanente Medical Group, and LabCorp, each processing more than 20,000 tests per day.
In late October, the state opened a lab in Valencia, partnering with the diagnostics company PerkinElmer to run as many as 150,000 tests per day. However, as of late December, it was running just over 17,000 tests per day, according to the state health department.
Compare that to Renegade Bio, which processes around 1,000 per day — half of its overall capacity, so that it can turn around results in a day.
A state health department spokesperson said in an email that smaller labs are important in filling the gaps in under-resourced areas and also provide testing to private companies.
While companies like Renegade and Primary jumped into the testing market quickly, it remains to be seen whether they can adapt in a post-pandemic world. In December, the first vaccine doses were injected into the arms of Americans, and Dr. Anthony Fauci, the country’s top infectious diseases expert, has predicted the general population would start receiving vaccines by the summer 2021.
So when Covid-19 testing is no longer needed on a large scale, where does that leave the companies?
Most of the business leaders Mission Local interviewed said that testing will be crucial throughout 2021 to test for the vaccine’s effectiveness. But few had a firm idea of their place in a completely immunized America.
Kobylinski, Primary Bio’s chief executive, said the what-next conversation comes up frequently. “If it disappears in three months, we might be all out of a job,” Kobylinski said. If it comes to that, however, he and his staff are assured that, “We made a difference.”
Ribeiro, of Bay Area Phlebotomy Laboratory Services and Renegade Bio, said, “It’s a question that I think will be answered next year.”
And Rouskey, Renegade’s chief executive, said: “I see ‘mission complete’ as when the pandemic is over.”
However, most of them spoke in broad terms about how the pandemic exposed major cracks in the country’s healthcare system. And their companies, having facilitated fast and relatively low-barrier diagnostics to thousands of people, could be a starting point in fixing the country’s barriers to basic healthcare.
Caroline Savello, the chief operating officer at Color, said she saw the heightened access to testing during the pandemic as an “a really important opportunity” to move past “how critically awful the situation is of health care delivery in this country.”
Color, a Burlingame-based startup, that focused on genetic testing and counseling, a process that can notify a person of certain health risks earlier in life, pivoted to Covid tests and logistics, all in a matter of months. Color’s labs process the tests for San Francisco’s two largest testing sites and deliver those results in under three days. A state health department spokesperson called Color an “influential partner.”
“Rather than defaulting to the way things were before, [we] demonstrated that you actually don’t need to wait to see a doctor to get a test,” Savello said.
And this, she said, should be true for all basic healthcare.
But testing companies may need to adapt before the pandemic ends, DeRisi said, as he sees “antigen testing” — a process that can deliver results in close to 15 minutes — as the only effective way to test. “I’m now of the opinion that 24 hours or 48 hours is too slow,” he said. “It has to be minutes.”
And to that end, companies that rely on standard PCR testing — most of them — “better [adapt] or shut down.”