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Clinical Reference Laboratory CEO on future of COVID-19 testing

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Yahoo Finance’s Akiko Fujita and Zack Guzman speak with Clinical Reference Laboratory CEO Robert Thompson about the company’s partnership with Walgreens that will help tackle COVID-19 testing.

Video Transcript

AKIKO FUJITA: Clinical Reference Laboratory today announcing a new partnership with Walgreens to deploy its rapid COVID-19 saliva tests through the pharmacy's digital platform. Let's bring in Robert Thompson. He is the CEO of Clinical Reference Labs. And it's good to talk to you today.

Let's talk about what this partnership means. We've gotten so used to seeing these big testing sites on a massive scale from city to city across the country. How do you see this being deployed, and how far does this go? Or what does this do to improve the access to testing for those who have not been able to get into the fold?

ROBERT THOMPSON: So what we're seeing nationwide, really, is a substantial drop in the number of cases. We've gone in the last eight weeks down 74% from our peak. The number of tests, indeed, down as well, down 34%. The positive rate changing from around 13% to just below 5% nationwide. Those are enormous changes. And I think it reflects the number of people with natural immunity and the number of people that have been vaccinated. So the progression of the disease is much slower than it's been in the past.

That will change the testing market from these sort of massive sites where people drive through, and you test 500 people in a day. I think that's peaked. And where we are today is going to migrate more towards like flu testing, is near patient testing, either in the physician office or at home. So our test, available through the Walgreens Find Care app, is really designed for that at-home application, somebody who wants to be tested in the confines of their own space.

ZACK GUZMAN: Yeah, it's interesting because now there are a few options out there. I actually drove through a Walgreens drive-through test, scheduled the appointment through them just a couple of days ago. Not hard, pretty easy. But what does it look like to you, the space around this with insurance coverage to where you're seeing the increase in Americans maybe choosing to go that route? Because, obviously, there's tradeoffs, right, when we think about efficacy or accuracy of some of these tests versus sending it into the labs. So talk to me about that.

ROBERT THOMPSON: So the rapid test that you do, you actually conduct in your own home. You actually perform the test yourself. They are less accurate. They're still good tests. I'm very glad that they're out there. But they are not as sensitive. So you're not going to catch an early progression of the disease as well as you would with PCR testing, which is what our test uses.

So I believe that these folks like Walgreens and others are going to provide sort of a series of different kinds of tests will be available. Something that's rapid on site if you're symptomatic might be a good solution for you. If you're wondering what your status is before you go visit grandpa and grandpa-- grandpa and grandma, that, you know, I think asymptomatic testing is more given towards the PCR-based testing in a laboratory, as we do.

AKIKO FUJITA: How are you looking at this from a business standpoint and the amount of growth you're likely to see in the coming years? On the one hand, as you point out, we're seeing a decline in case accounts in the hospitals. The hope is that we don't have to continue doing these tests for the next few years. What do you see when you look ahead to the future and how you think COVID testing is going to play a role, whether it's during the winter flu months or in the summer?

ROBERT THOMPSON: I think it's going to change from what we saw in 2020 in the beginning of this year. I think January was really sort of the peak of mass-- huge mass testing. I think as vaccines roll out and we get closer to herd immunity, I think you're going to have people that are testing, particularly in the schools, because we don't have vaccines yet for the younger-- anyone under 18.

And so I think as that's happening, you're going to see more and more testing that's really like regular flu testing, where, seasonally, it picks up, and people are testing themselves when they have something. They're going to want to know whether or not what they have is the flu or whether or not it's COVID or some new variant that might come along. So I think you're going to see a migration to the physician office. I think you're going to see a migration to the home. And it'll be a lot like normal flu testing at much lower volumes than you're seeing today.

ZACK GUZMAN: Yes, good point. The tradeoff there as you get vaccinated, maybe the drop in the need to test, of course, still important for some people. When we look at it, though, in terms of that school piece you mentioned, how important is that in the short-term to maybe roll out things like your FDA-approved test here? Because, obviously, there is a large need right now on that front. So what does that look like? Obviously, building off the partnership with Walgreens, what more can be done? Because testing has lagged up until this point.

ROBERT THOMPSON: Yeah, so the schools are sort of its own unique case. We do a lot of university-based testing. In the sort of back to school season in January, we tested I think 15 or 20 different universities, including Kansas University, William and Mary University, a variety of them. The testing went very well this time. The positive rates were much lower than they were in the fall, which I think reflects the fact that there's a lot more natural immunity out there.

I'm very focused and CLR's very focused on K through 12 testing at this point. There's a lot of interest. Schools are reopening. We're involved with the Los Angeles Unified School District and their testing program and several testing programs here in Kansas and Missouri. I think that kind of testing, surveillance-based testing is going to continue for some time.

And in the universities, they've switched from broad-based, I'm going to test everybody every week, into more surveillance format, where they're going to test a small percentage of the population and see if they can catch outbreaks early.

AKIKO FUJITA: Robert, really quickly, what about the use of these tests at events? Whether it's a sporting event or concert, we've heard a lot of discussion about how you get the crowds back into the stadiums. Do you have discussions on that front?

ROBERT THOMPSON: Yes, so we did all the testing for the Kansas City Chiefs this past season. Anybody that wanted to go into one of the suites and occupy the suites needed to get tested within 72 hours. We've had conversations with other sporting venues as well. I do think there's a lot of-- that will be a long tail on that kind of testing, as well as pre-travel testing.

Most of the international destinations are saying you need to get a test within 72 hours, and then you need to get a test when you arrive. That kind of testing is certainly going to stay around until we're sort of worldwide achieving immunity, which I think will be, you know, well after the United States achieves immunity.

ZACK GUZMAN: Yeah, as we were discussing earlier, not every country on the same path here. But Robert Thompson, Clinical Reference Laboratory CEO, appreciate you coming on here to chat all that with us.