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Linda-EverywellCaseStudybyLinda1.pptx
Case Study: Covid-19 testing at everlywell
Linda Petry
Biotech Operations
22Feb2021
Outline
Julia Cheek, CEO
Background of Everlywell
In-vitro Diagnostics Market
3 Options
Lessons Learned
Conclusion
Julia Cheek, CEO
Grew up in Dallas, TX
Won a full scholarship to Vanderbilt University
Worked at Deliotte as a consultant
2009, entered Harvard Business School-height of recession
George W. Bush Institute (Strategy and Operations) and Moneygram (VP Corporate Strategy)
Jan 2015 - health problems led to a start up idea
August 2015 –Launched everlywell
She ended up having a hormone and vitamin imbalance, which led to her idea of a creating a start company for in-vitro diagnostics. She was both passionate and felt the timing was right.
An interesting point is that she was told to dye her hair to differentiate herself from Theranos’ Elizabeth Holmes
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SWOT ANalysis
Strengths
Weaknesses
Opportunities
Threats
everlywell Strengths
Developed tests that used human blood, fluid, or tissue samples to identify diseases/medical issues
In-vitro Diagnostics (IVD) industry (classified as medical devices)
FDA evaluated IVD tests prior to release to verify accurate results and clinically useful
Everlywell tests were considered LDTs-Laboratory-developed tests
$67 Billion (2019); forecast $91 Billion (2027)
everlywell Weaknesses
People without a healthcare background could lack the skills to collect a proper sample, leading to incorrect results
Potential errors for contamination, incorrect sample sizes, mislabeled samples, failure to store at proper temperature
Partnering with independent labs makes everlywell the middleman
IVD industry scandals: LabCorp’s Ovasure accuracy rate less than 7%, Theranos fraud
Hard time raising money, only been in business since 2015
threats
Changing Landscape due to COVID-19
OpEx reductions needed-12% - 35% (Exhibit 4)
Dow dropped 13%
Orders down 50%
Temporary Hiring freeze
In Vitro Diagnostics = Devices
Federal law (FD&C Act, section 513) established the risk-based device classification system for medical devices, based on the level of control to provide reasonable assurance safety and effectiveness
3 Classes of Devices:
Class I (low to moderate risk): general controls
Class II (moderate to high risk): general controls and Special Controls
Class III (high risk): general controls and Premarket Approval (PMA)
Federal Food Drug and Cosmetic Act (FD&C ACT)
2020 = 37,000 Medical and Diagnostic Labs in the US
27,000 Different Companies
Generated $52.3 Billion in revenue
Major players:
LabCorp- 50 labs – $9.4 Billion = 18% market share (2019)
Quest Diagnostics – 80 labs – $7.2 Billion = 14% market share (2019)
Third party vendors such as Abbott Labs
37 states allow patients to order their own lab tests
In vitro diagnostics are tests done on samples such as blood or tissue that have been taken from the human body. In vitro diagnostics can detect diseases or other conditions, and can be used to monitor a person’s overall health to help cure, treat, or prevent diseases.
Like most heath care services in the US, most lab tests are ordered by health care professionals and paid for by insurance companies, based on negotiated rates. These are often “back-door”
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FDA notification
New notification from the FDA: “…The FDA has not authorized any test that is available to purchase for testing yourself at home for COVID-19…fraudulent health claims, tests, and products can pose serious health risks.”
4 choices or “Opportunities”
1. Postpone Everlywell’s Covid-19 test launch and wait for further guidance
2. Reserve the test kits for health care providers and frontline workers (high risk of exposure), while continuing to engage with the FDA to secure permission for a consumer launch
3. To continue the launch based on grounds that the FDA’s statement referred to at-home testing sample collection kits like Everlywell’s
4. pivoting away from this brief flirtation with COVID-19 testing and returning her focus to her core business across the myriad of other important test categories
Choice #1: Postpone the test launch
The World was waiting for a test kit for COVID-19
You couldn’t get tested for COVID-19 as there were no kits (February/March 2020)
Engage the FDA in conversation to keep open communication
Everything was shutting down
Zoom/Skype/online interaction
Julia Cheek could postpone everlywell’s COVID-19 kit test launch and wait for guidance from the FDA. However, the world was waiting with baited breath for a test. In March 2020, you could not get a COVID-19 test even if you wanted one and even if your doctor ordered one. There just weren’t any tests at that time and everyone needed it developed immediately. To keep lines of communication open with the FDA, I think she should engage them in a conversation as quickly as possible over zoom or skype as everything was closed down in March 2020. She would have to file a 510K for medical devices in order to receive Emergency Use Authorization (EUA).
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Pursue a middle ground, by continuing launch, but restricting access to health care workers (greatest exposure), while lobbying the FDA for home use authorization
You still need FDA approval for front line workers
Choice #2 Proceed with only high-risk patients
She could reserve the test kits for healthcare providers and frontline workers who have been exposed. However, reserving the kits for healthcare workers does nothing if the kit does not have FDA Approval. In order for a consumer to get access to the kit, they have to answer the questions that are asked on everlywell’s website in order to even get their hands on a kit.
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Choice #3: Continue with Launch
To continue the launch based on grounds that the FDA’s statement referred to at-home testing sample collection kits like Everlywell’s
Continue with launch by keep pushing for FDA approval, but do not engage in sneaky behavior based on semantics of “at-home testing kits and not-at-home sample collection kits
everlywell could continue with the launch based on the grounds that the FDA’s statement referred to at-home testing kits, not-at-home sample collection kits like Everlywell’s. I think that everlywell should continue their work as much as possible, but hold the launch until they have clarification from the FDA that they can indeed launch the device as an intro diagnostic.
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Choice #4 Focus on core business
Could pivot and focus on the other 35 tests that they offer
Keep moving forward with original plan to market Covid-19 test
Everlywell could pivot and focus on the other 35 tests that they have to offer. They have testing in food sensitivity, allergy indoor and outdoor testing, thyroid testing, women’s health (ovulation, hormone panels (FSH, LH, Progesterone, estradiol, cortisol, DHEAS, TSH, Free T3, Free T4, thyroid peroxidase antibodies, and total testosterone), metabolism test, testosterone for men’s health, vitamin testing (B and D), inflammation, perimenopause, postmenopause, Hepatitis C, Syphilis, Chlamydia & Gonorrhea, HIV, Trichomoniasis, Cholesterol and lipids, Lyme disease, heart health, HbA1C, Folic acid, Colon cancer screening, heavy metals screening, and Sleep and Stress test.
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Emergency Use Authorization
Outcome
Who should get tested for Covid-19?
Lessons learned
DON’T Mess with the FDA. You can’t win and you have a lot to lose. Do as they say.
Communication is of utmost importance with the FDA
Hire the right people
‘Shark Tank’ is a great way to become known
Conclusion
The Everlywell COVID-19 test home collection kit has demonstrated sample stability and usability that is acceptable to the FDA
They are marketing their Covid-19 test as of 9-4-2020
They are staying afloat despite financial issues
