As a number of businesses in the diagnostics forecasting industry predict lower earnings from COVID-19 tests this year, Siemens Healthineers is reporting that the company’s sales of COVID-19 rapid antigen tests are expected to nearly double in 2022. According to a new quarterly report from the company, Siemens has already earned $374 million from COVID-19 test sales and now expects to generate $796 million in test sales this year.
The growth of Siemens’ testing sales, amid less optimistic predictions from the rest of the industry, likely tells us something about the current state of the pandemic and how the diagnostics forecasting market for COVID will evolve over the course of 2022.
Testing Surge Leads Siemens to Almost Double Diagnostics Forecast
The new forecast is likely due to major developments in COVID-19 and Siemens’ portfolio of diagnostics that emerged after Siemens issued its original forecast for 2022 late last year.
The most significant shift in the market has likely been the emergence of the Omicron variant and a major surge in COVID-19 transmission between December 2021 and February 2022.
This surge drove demand for COVID-19 tests to the extent that sales in the first quarter of 2022 eclipsed Siemens’ original full-year forecast.
In addition to the omicron variant, the original sales forecast did not account for the FDA emergency use authorization for Siemens rapid antigen self-tests that the company was granted in late December 2021.
As retailers around the U.S. struggled with shortages of rapid-acting COVID tests, the EUA allowed Siemens to quickly bring its Clintest over-the-counter rapid COVID-19 test to market in January 2022 — as COVID-19 cases were peaking in the U.S.
This test, which was the first Siemens COVID-19 diagnostic made available in the U.S., drove much of the growth in Siemens’ COVID-19 revenues for the first quarter.
With the January surge over, however, it’s not clear if Siemens’ predictions will be accurate. Experts do say that another surge has already begun, and that COVID-19 case numbers will likely grow over the next few weeks.
However, it’s not clear if this surge will be as severe as previous surges, or if consumers will respond in the same way — potentially impacting test demand.
Healthcare accreditation non-profit URAC, for example, announced in February that it would return to virtual validation through mid-March 2022. So far, however, the organization has not moved to use the virtual validation model again for the emerging COVID-19 surge.
Outside of healthcare, many organizations seem to be behaving in a similar fashion. Most major airlines, for example, have made wearing masks on flights optional for all passengers. The EU Aviation Safety Agency (EASA) also announced in early May that it would be relaxing COVID mask rules for air travel within Europe.
These relaxed rules could suggest changing attitudes towards pandemic safety measures, like the use of rapid-acting antigen tests. Consumer demand for tests, as a result, may not rise with increasing case numbers in a predictable fashion over the next few months.
How Will Diagnostics Forecasting Evolve This Year?
Other major manufacturers of COVID-19 tests, like Abbott, Roche and Thermo Fisher, also saw major surges in test sales at the beginning of this year. Roche, like Siemens, also received an FDA EUA for a new test in late 2021.
These companies are less optimistic about COVID-19 test sales for the rest of 2022, however, and have made more conservative predictions about the future of test demand. All three warned investors on recent earnings calls that they expected test sales to drop off after the beginning of the year.
Roche, for example, predicts a $2 billion hit to COVID sales this year as case numbers drop and consumer demand for COVID-19 tests falls off. Thermo Fisher predicts a similar decline in demand, with sales falling from $1.68 billion in the first quarter to just $100 million per quarter in Q3 and Q4. In total, the company expects that it will earn just another $0.5 billion from test sales this year.
While experts predict that the U.S. is likely on track for another surge in May and June, it’s not clear if demand for tests will rise to the extent that it did during the January surge.
Siemens, Unlike the Competition, Remains Optimistic on COVID-19 Testing Demand
While experts predict the ongoing COVID-19 surge will continue, test manufacturers are divided on what this surge will mean for the industry.
Siemens predicts that demand for tests will remain high through the rest of the year. Competitors like Roche are less optimistic.
Attitudes towards the pandemic appear to be shifting, which could impact the demand for tests. Around the world, organizations are taking a different, more relaxed approach to the current surge. If consumers adopt a similar attitude, there may not be an increase in test demand as the current surge continues.
By Shannon Flynn, ReHack