Pivot, Persevere, or Perish: How Ellume Health overcame development and regulatory obstacles to become the first authorized over-the-counter COVID-19 test in the United States

Abstract

The Ellume COVID-19 Home Test from Ellume Health (Brisbane, Aus) became the first COVID-19 diagnostic tool authorized for home use by the United States FDA in December 2020. This early pandemic success was built on over ten years of work on the Ellume Influenza Home Test. Ellume overcame critical technology challenges during the development of their influenza test. In addition, it faced a recall of its COVID-19 home test in 2021 due to false positive results. While Ellume initially persevered through the recall and restarted sales in the United States, the combination of the recall and the wide availability of competitors’ low-cost over the counter tests in the United States led to Ellume entering voluntary administration in September 2022. This paper traces the history of Ellume and how 10 years of experience with a home influenza test allowed the company to quickly develop the Ellume COVID-19 Home Test. We will also provide to diagnostic developers the key strategies employed by Ellume to succeed while highlighting the pitfalls that have challenged the company’s business success.

Ellume Health’s COVID-19 Home Test development journey provides lessons for microfluidic and diagnostic developers.

Introduction | Description of Ellume system

The Ellume COVID-19 Home Test from Ellume Health (Brisbane, Aus) became the first COVID-19 diagnostic tool authorized for home use by the United States FDA in December 2020[1]. The Ellume COVID-19 Home Test is a unique antigen assay that combines fluorescence, optoelectronics, a custom nasal swab, and a mobile application for providing instructions for use and reporting the result to the user and public health authorities in real time.

The Ellume COVID-19 Home Test begins with pre-mixing the patient specimen and quantum dot fluorophore. The user first adds Processing Fluid into a Dropper container which releases antibody-bound fluorophore into solution from a conjugate release pad. A mid-turbinate nasal specimen is collected using the included nasal swab, which has an adapter to ensure appropriate depth if the specimen is being collected from a child. The swab is then screwed into the dropper container, eluting the specimen and facilitating the labeling of any viral nucleocapsid antigen in the specimen.

Next, the user dispenses an aliquot of the sample containing fluorophore-labeled antigen complexes into the Analyzer Sample Port. The sample flows by capillary action across capture zones on the test strip membrane and a tagged viral nucleocapsid protein is bound by capture antibodies. Fluorescence signals in the capture zones are detected using a sensitive single-use optoelectronics reader system, housed within the Analyzer. Finally, the tests and controls are interpreted by the microprocessor contained in the Analyzer. The computed result is communicated to the smartphone application and displayed on the user’s smartphone. An encrypted and de-identified result is transmitted into a secure cloud database for sharing with public health authorities for real time disease surveillance.

“Why isn’t there a home influenza test?” | Origins of Ellume

Ellume founder Sean Parsons, MD, worked as a physician during the 2009 Influenza A (H1N1) pdm09 pandemic in Australia [2]. Rapid response to the H1N1 pandemic was blunted by the lack of ability to diagnose a patient outside of a healthcare facility. In 2009, two influenza diagnostics were available: real-time Reverse Transcription-Polymerase Chain Reaction (rRT-PCR) which was performed in central laboratories and Point of Care (POC) Rapid Influenza Diagnostic Tests (RIDTs) which were performed in doctors’ offices and other point of care settings [3]. Dr. Parsons theorized that earlier diagnosis of influenza at home before presentation to any healthcare facility would improve influenza outcomes and help limit spread of the viruses from infected individuals entering healthcare facilities without proper isolation precautions. However, no such diagnostic test or method was available in Australia. Ellume was founded on this question: “Why isn’t there a home influenza test?”.

Unlike many technology companies with a solution looking for a problem, Ellume focused on the problem: the need for home influenza diagnostics. Their search was guided by five principles: The product needed to be simple, scalable, affordable, accurate, and actionable. The company assessed several potential technologies including molecular platforms and immunoassays and determined that an optoelectronic fluorescent immunoassay coupled with robust digital technology met the five guiding principles, offered a lower limit of detection than non-fluorescent immunoassays, and the optoelectronics were technically feasible based on products commercially available from pregnancy test company ClearBlue and ClearBlue’s digital pregnancy test. In 2011, Ellume began working on a fluorescent immunoassay technology targeted to home-based testing for influenza.

Strategic Decisions in the Development of the influenza and COVID home tests

Guided by the strategic decision to focus on home use, Ellume developed a non-invasive sample collection methodology akin to the user blowing their nose prior to adopting the current mid-turbinate (MT) swab. The company’s initial focus group assessments suggested the non-invasive technique would be both safer and more tolerable with subjects than traditional nasopharyngeal (NP) or mid-turbinate (MT) nasal swabs. In addition, the US FDA had not approved nasal self-swabbing for influenza sample collection [4]. While successful in analytical lab testing and usability testing with customers, the non-invasive collection method failed twice in clinical trials due to the variability of the sample which made dilution and processing of the sample difficult. At this point the Ellume team pivoted away from non-invasive collection and focused on how to make a standard swab-based collection methodology safe and acceptable to the FDA. The solution was a custom mid-turbinate swab with clear step by step instructions provided via mobile application. Startup companies such as Ellume often face “Pivot or Persevere” moments in their growth, where initial strategic assumptions, such as lack of customer engagement or a technical failure of the product, are tested. Pivots occur when the business sharply changes strategic directions based on findings in these learning phases. Ellume’s pivot from non-invasive sample collection to creating a custom sample swab was one such moment[5].

A second pivot occurred when the Ellume team switched from outsourcing to internal development of the key fluorescent nanoparticle technology. Like many early stage companies that must focus their limited internal resources, Ellume outsourced the development of this particle to a group of nanoparticle production experts. The assay design required quantum dot labels (~5nm) because the large Stokes shift and photo-stability of the nanodots [6]. However, a single quantum dot by itself was not bright enough thus the company created a multi-quantum dot particle consisting of ~1000 quantum dots. Creation of these multi-quantum dot particles had been successful in academic lab settings, but no commercial product existed [6]. However, the multi-dot particle these outside experts produced lacked sufficient signal-to-noise to achieve analytical sensitivity that could rival nucleic acid amplification assays. Recognizing that development had stalled using the outside experts, the Ellume team made an organizational pivot to develop the quantum dot particle “in-house”. Through multiple iterations and an increased learning rate directly informed by product criteria, Ellume scientists succeeded in developing a fluorescent nanoparticle with the required signal-to-noise ratio. This fluorescent nanoparticle is a critical component of the intellectual property that enables the Ellume Test.

The third and most important moment occurred in February 2020. With growing realization that SARS-CoV-2 would become a global pandemic, the company redirected their entire product development pipeline to the creation of COVID-19 diagnostics. The company began developing five assays simultaneously, including a point-of-care (POC) COVID product, a serology product, and a home-based test based on the influenza test technology. Ellume was also awarded $30M in funding from the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) program (Contract No. 75N92020C00034) which provided funding for manufacturing scale-up and the analytical and clinical studies needed for Emergency Use Authorization (EUA) [7]. In December 2020, the Ellume COVID-19 Home Test became the first home COVID test authorized for use in the United States which led to an additional contract with the US Department of Defense for $231M to increase domestic production capacity [8].

Technology pivots, like switching from influenza to SARS-CoV-2, are often associated with software products, not biotechnology products. Software companies can modify or rewrite software easily, and thus change the product, based on new information. Biotechnology companies however do not often have this same product development speed advantage as biotech products are usually physical products, highly regulated, and may be underpinned by years of basic science research. These features make “pivot or persevere” decisions even more important to a biotechnology company. Because the Ellume Flu Home Test was designed as a platform technology for the home use case, the company had developed a robust digital infrastructure including a digital analyzer and a mobile app that integrated instructions for users and results reporting. This digital infrastructure allowed the company to quickly pivot their focus from Flu to SARS-CoV-2.

In a final critical moment, Ellume persevered through a class I FDA recall of their products. The recall was started on October 1, 2021, and affected over 2.2 million devices out of 3.5 million devices available in the United States [9]. Due to travel restrictions, the company was managing supply chains remotely from the company headquarters in Brisbane, Australia. The company was using a quality control (QC) method on a raw ingredient that had been validated successfully for the initial influenza assay but was not appropriate for coronavirus. This led to a loss of specificity with specific batches of the Ellume COVID-19 Home Test and manifested as 35 false positive reports to the FDA. Company leaders ultimately perceived the root cause of this problem could be attributed to the speed of development and scale-up of the COVID-19 Home Test which took place in several months of compressed timelines. Instead of pivoting at this critical moment, the company chose to persevere through the recall by quickly identifying and fixing the QC problem and restarting sales in the United States.

Success Followed by Failure | What Changed?

In late 2022, Ellume faced insolvency and no easy prospects for reversing the company’s fortunes. On August 31^st 2022, the board of directors elected to enter ‘voluntary administration’ (similar to Chapter 11 bankrupcy in the US and Administration in the UK) as an attempt to recover some value from the business for creditors. Despite its market leading position, Ellume lost money from 2018 to 2022 and finances were negatively impacted by two significant events. First, the recall in the United States cost the company $43.0M in direct cost such as refunds and reverse logistics[10]. Due to the recall, Ellume also lost its first mover advantage, allowing numerous other assay developers to gain market entry. The recall also occurred during the Omicron surge in the United States, which cost the company in lost revenue from increased COVID-19 test demand during the winter of 2021. An additional change that adversely affected Ellume was the market for rapid home COVID-19 tests changed significantly in the United States. The US government announced on January 14, 2022 that 500 million tests were to be made available for free to US residents and the tests were easily ordered and shipped directly to homes. This action, which impacted the sales volume and revenue for all manufacturers of rapid home COVID-19 tests who operate in the United States, had significant detrimental effect on Ellume as the US was the only market where its product was actively sold. In total, the company was estimated to have liabilities between $186.5M and and $229.5M. In the final chapter, Ellume’s creditors agreed on December 22^nd, 2022 to a sale of the company to diagnostics rival Hough Consolidated for US $38M[10]. While now owned by Hough Consolidated, Ellume is currently continuing to operate and support its products and customers.

Ellume’s early engagement with the US FDA prior to the pandemic gave the company a speed advantage compared to other companies during the early period of the pandemic. However, this early engagement came with drawbacks as the Ellume COVID-19 Home Test includes features that increase the cost of the product compared to competitors. These features were required for a de-novo 510k authorization but during the pandemic, requirements for OTC products were relaxed under the Emergency Use Authorization (EUA). Example features include digital reporting of the results to government agencies, non-visual interpretation of results, Limit of Detection (LOD) comparable to laboratory based tests, and an endogenous Human Serum Albumin control which were requirements for a de-novo 510k but were no longer strictly required for antigen based assays under the EUA.

Business Keys to Success for Diagnostic Developers

Despite the eventual turn in business fortunes, five key strategies for success were identified by Ellume leadership through interviews with the authors.

1. Deeply understand the use scenario and regulatory framework of the use scenario

Ellume focused specifically on home use (over-the-counter) diagnostics for influenza. The intended use influenced the sample collection device, which was designed to prevent injury, the use of digital instructions for users to make them easy to understand and follow, inclusion of the internal control Human Serum Albumin (HSA) assay to prevent failure modes created by poor sample collection, and even adding color to the buffer solution to prevent accidental ingestion. These design decisions were driven by numerous formative and summative human factors studies and iterations of the hardware and software and Ellume’s early and frequent collaboration with the FDA. Frequent collaboration with the FDA was also key to the authorization of the Ellume COVID-19 Home Test, as the FDA had already vetted many of the product and safety features of the test.

2. Partnering with a large, strong diagnostic company for process/systems, distribution, and scientific affairs

Ellume partnered with a large global multi-national consumer product organization during the development of the Ellume Flu Home Test in 2019. Partnering with an established and successful diagnostics developer and manufacturer allowed for the transfer of skills and best practices such as manufacturing processes, quality control practices, product distribution, and scientific affairs management.

3. Technical excellence led to a differentiated product with high sensitivity

The Ellume COVID-19 Home Test is highly sensitive due to the use of optoelectronics, tight integration of electronics, a proprietary firmware/algorithm for reading fluorescence, and the proprietary quantum dot nanoparticle.

4. Building a platform technology allowed business options and pivots

The core platform technology enabled Ellume to develop variations of their COVID-19 assay in parallel in response to the COVID-19 pandemic and business uncertainty about which tests methods, modalities, and settings would be important. These included serology assays and point of care products distinct from the eventual over the counter (OTC) success of the Ellume COVID-19 Home Test.

5. Iterative development is critical for OTC products

The development of the Ellume Flu Home Test took many years and continued dialog with the US FDA. Iterative development, particularly in the digital companion application allowed the company to respond to both regulatory and user expectations. In addition, this iterative development strategy aided the company when pivoting to the Ellume COVID-19 Home Test, allowing it to develop the product quickly in a changing environment.

Conclusion

Here we have described the history and development of the Ellume Flu Home Test and how this positioned the company for success developing the Ellume COVID-19 Home Test. Ellume’s history contains important lessons for future microfluidic and diagnostic developers both in the successful development of the Ellume COVID-19 Home Test and, in the company’s eventual business failure.

Figure 1.

Ellume COVID-19 Home Test Kit Components

Table 1 -.

Keys to Success by Business Role

Role	Keys to Success for Ellume
Chief Executive Officer	– A Long productive working relationship with the FDA – Setting a specific product strategy (home use) and selecting technology for that use
Chief Operating Officer	– Keeping manufacturing in mind, even early in product development – You can outsource technology development to a point, but you have to bring it in house to make significant progress – Fast failure is key
Director of Engineering	– Strong, supportive board of directors who believed in company vision – Create a culture of Objectives and Key Results (OKRs)
Director of Marketing	– Focus on user experience through continuous user studies and iterative development

The NIH-funded Atlanta Center for Microsystems Engineering POC Technologies (ACME POCT) is focused on microsystems-based and microfluidics-based diagnostics. The center’s experience with the Rapid Acceleration of Diagnostics (RADx) program to speed the development, validation, and commercialization of innovative SARS-CoV-2 point-of-care and home based tests has brought the ACME POCT team into contact with amazing leaders of diagnostic technology companies. This experience has taught the team tremendously about the business and technology of microfluidics commercialization. As such, we aim to disseminate this knowledge to our microfluidics community by publishing a series of “lessons learned” case studies focused on the technical, clinical validation, regulatory, and commercialization lessons that led to company success or company failure.

Our second case in this series discusses the development and commercialization of the Ellume Flu Home Test and Ellume COVID-19 Home Test.

Wilbur Lam, MD, PhD co-leads the ACME POCT with Oliver Brand, PhD and Greg Martin, MD.