Goa-based Molbio Diagnostics recently announced an $85mn fund raise from Singapore’s Temasek at an enterprise value of $1.5 bn reportedly making it India’s first ‘unicorn’ in the medical devices sector. Its flagship Truenat is a relatively low-cost, portable and miniaturised polymerase chain reaction (PCR) technology platform or micro PCR. The platform takes molecular biology testing for life-threatening infectious diseases such as tuberculosis (TB) and Covid-19 out of central laboratories and closer to the patient enabling timely detection. Since 2020, Molbio has made strides in supplying Truenat to the country’s National TB Eradication Programme as a viable and more accurate replacement to the legacy smear microscopy test. It claims a distribution network in 40 countries. In 2020-21, it claims to have delivered 4 million TB tests and 8 million Covid tests and placed over 3500 machines across the public and private sector.
About a decade ago, Sriram Natarajan, already a successful entrepreneur having founded Goa’s Tulip Diagnostics, a leading maker of in-vitro diagnostic kits, teamed up with Chandrasekhar Nair whose Bengaluru-based Bigtec Labs had created a prototype of what is now Truenat, to form Molbio. Earlier, in 2005, Bigtec had been a beneficiary of funding from the Council of Scientific & Industrial Research (CSIR)’ s New Millennium Indian Technology Leadership Initiative (NMITLI). This is a public-private partnership in research and development launched in 2000-01 with the ambition of catalysing disruptive innovation and building technology leadership in niche areas. For several years, Bigtec was a tenant of the Indian Institute of Science, Bengaluru’s Entrepreneurship Centre. Since 2014, it has been a subsidiary of Molbio, and also its research engine, while Sriram is all in, having sold his stake in Tulip to the US-based PerkinElmer Inc.
Last April, while researching for an article in Shaastra on point-of-care diagnostics, I had spoken in some detail with Sriram, Director & CEO, Molbio and Nair, Director & CTO on Molbio’s journey and on the imperative of taking accurate, reliable testing closer to the patient. Both underscored rigorous validation of the technology as a sine qua non of making an impact. I have reproduced some unpublished excerpts here with a green light from all concerned. While I spoke with them individually, the two conversations complemented one another enabling me to present them as a single interview. They have been edited for brevity and clarity.
Special thanks to Shaastra for letting me share this. You can also read the Shaastra article here.
On the founding of Molbio in 2012
SN: Tulip Diagnostics was into all areas of diagnostics except molecular. I knew that was going to be the future and also that conventional medical technology systems are not going to be the way to go; it has to be a more point-of-care approach which allows you to take high-end medical technology to where there is a requirement. I had started a small project in the area and that was when I saw Chandrasekhar Nair make a presentation on the micro PCR platform at a meeting. At the time it was an early prototype. They (Bigtec) had taken a much better path – I would have loved to do it myself. It was clear that there was no point in reinventing the wheel. I approached Nair and we formed Molbio Diagnostics as a joint venture.
CN: Our wavelengths matched. Tulip, under Sriram, had scaled technology massively for rapid diagnostic tests. It had figured out manufacturing, regulatory, and international marketing as also the public health piece. We understood that this relationship – and product – have to be nurtured.
On the need to take molecular diagnostics to point-of-care
SN: The PCR was invented 30 years ago. Owing to patents, it was a (Swiss company) Roche Diagnostics monopoly for 20 years. The model/approach was all central laboratory-based – huge machines, sophisticated labs, capital intensive. Unless labs did batch testing, it would prove to be very expensive. So they would wait for 90 to 100 samples to come in and make up a batch. In India, only central labs such as SRL and Dr Lal’s Pathlabs were doing it because they could do volumes using their collection centres. But even then, it took anywhere from three to ten days to report results; the sample had to travel and then there was the wait for enough volume to run a batch. When you transport from a distance, the integrity of the sample is a big issue – you need dry ice for proper storage. Where will you get this beyond big cities? And your ice packs only last a day. Hence, reliability was a question. With an infectious disease, doctors have to treat immediately so they would just treat empirically (without testing) even though they were aware that it could breed antimicrobial resistance. In spite of being the most reliable and a gold standard for infectious disease, PCR was not serving the purpose. The costs were high – Rs 4000 to Rs 7000 per test depending on where it was coming from. If we could take it to the lowest level – that is where the need is going to be. Make it simple, robust, as lab-independent as possible, and yet be affordable to make. For TB, this is exactly what was required. There is also a need for reliable point-of-care testing in non-communicable diseases.
On TB and molecular diagnostics
SN: Currently, TB detection in the public sector is being done through DOTS (Directly Observed Treatment, Short-course) centres. Most centres are still using smear microscopy where you take sputum from the patient, put it on a slide and view bacteria under the microscope. Now, it has been realised globally that smear microscopy is reliable only 40 to 50 per cent of the time and there is a call to replace it with molecular diagnostics in a phased manner. (Molbio’s Truenat is endorsed by the World Health Organization as a replacement to smear microscopy). Ultimately the idea is that for any of these infectious diseases, the earlier you diagnose and get cured, the faster you stop spreading it. If you want to eradicate TB it is important to pick it up in the first instance, diagnose correctly and treat the patient that day. About 12 years ago, US-based Cepheid launched its GeneXpert molecular diagnostics platform which can go down to mid-level laboratories such as district hospitals. But they don’t have point-of-care capability. With Truenat, you can take it to the field and do the testing, you get a report in an hour. This is anywhere-anytime, real time PCR. That was our vision, to see big impact. And impact not just in terms of the cost of the test. An undetected TB patient can infect others so the cost-benefit of diagnostics is tremendous if it is done at the right time in the right place.
CN: The approval from the Indian Council of Medical Research (ICMR) for TB in 2018 and endorsement by the WHO in 2020 were the inflection points for Molbio. Our work on TB was very, very challenging, the path to market was not at all clear. It was a complete black box at that point in time as (a novel Indian tech platform for TB) from concept to market for a public health programme had not been done before. There was a lot of support from the entire ecosystem such as ICMR, and (global non-profit) FIND on getting tests validated, on the kind of evidence that was required which was getting developed along with the test. We reached an order from the National Tuberculosis Eradication Programme and then, of course, Covid came along.
On Truenat in the pandemic
SN: Just when we were getting ready to deliver our first Truenat machines for TB testing in early 2020 to the government, the pandemic reached India. We had already been working on a test for Covid-19 and could secure approval for it from ICMR by April that year. The government repurposed our machines and placed orders for Covid tests instead. By the end of the year, the government came back and said ‘let us restart TB activity’.
CN: We were in a position to deliver because we were already going after a public health emergency i.e. TB. If we had not created capability and capacity, we would not have been ready (for Covid). It was something that we set out to do. We had a challenging year because of Covid-related lockdowns and fragmented supply chains and us being the only test decentralising molecular diagnostics. But we were up to it. We were planning for that because of the TB piece but we were able to use and grow it dramatically. Our team did a marvellous job of developing a world-class facility and products. We did not get any direct monetary support from the government but we got orders from both the central government and states. So we are primarily supplying to public (health) and that is all we want actually. Even as an industry at some point of time that is exactly what we should want – only so much handholding, and we should be able to deliver.
On staying competitive
SN: All our innovations are patented worldwide. Our competitor will take at least half the time that it took us– so to that extent, we are not really bothered by the competition. We have gone through a long and intensive learning curve especially in validation and getting all our endorsements. The Indian validation for TB took 3 and a half years and tests on 22,000 samples. Global validation in five countries took more than a year.
On the lab to market journey
CN: It has taken us 20 years to get to this space. It has been an intense journey and existential challenges have been very real. NMITLI had initially supported Bigtec when there was nothing on the horizon. We had some fantastic inputs from N K Ganguly (former Director General, ICMR), G Padmanabhan (former Director, IISc Bengaluru), Subba Rao (President, R&D and mentor). The goal post was constantly changing. We pushed the envelope on limitations of the platform and to build tests at the same time. Then, when it came to validation, we had to create mountains of data. We tested in European populations for the CE mark, in resource-limited settings for WHO endorsement. You can create a test very quickly but after that there is a rigorous validation process.
On innovative activity in the point-of-care segment
SN: Absolutely, there is a lot coming up. But much of it is still not tuned to exactly what is required. In terms of whatever you do, it should have impact. If you have to develop a test, 40 to 50 per cent accuracy doesn’t mean anything. While the ideas are innovative not all have any real value or fill any gaps. Fundamentally, the first objective should be to see what need you are fulfilling. Second, is it scaelable? You can get some things imported and assemble here but you will face severe issues of scale and cost. That has to be addressed in the beginning itself. Then it has to be completely fool proof and reliable as non-technical persons may be using it. If you need a skilled person to position the device, you lose the advantage of making it point-of- care.
CN: Every day, one reads about something that is going to revolutionise testing – but the path is not straightforward and needs a lot of commitment. It is not just innovation from a technical perspective but how to take that to the market..a lot of innovators will continue to grapple with that. The valley of death is very real – especially in public health. We have gone through the process of taking an idea to market, made a lot of mistakes and our entire focus is to learn from those and capitalize on the learning – and to do it right.