LI businesses, labs on front lines of global war on Zika

Long Island businesses and research laboratories are on the front lines of the global war against the Zika virus.

Chembio Diagnostics Inc. in Medford has met governmental standards to sell its diagnostic test in the Caribbean and Europe. A vaccine from Farmingdale-based Codagenix Inc. is being evaluated on mice. And Lakeland Industries Inc. of Ronkonkoma is supplying protective suits to people mixing insecticides to kill Zika-carrying mosquitoes.

At Stony Brook University, researchers are developing tests and vaccines. They also are examining how Zika is spread and why it persists in the human body longer than similar viruses.

“The great unknown is how prevalent Zika will become,” said Dr. Bruce Y. Lee, a professor at the Johns Hopkins Bloomberg School of Public Health who studies the economic impact of diseases. “But there is definitely a need . . . And our research has demonstrated that when you do work that is to help public health, there also are tremendous business opportunities.”

There’s a sense of urgency in both industry and academia about Zika because infected pregnant women have given birth to babies with microcephaly, or abnormally small heads with brain damage.

Nearly 70 countries have confirmed cases of Zika, mainly in the Caribbean, South America and Oceania.

In the continental United States, New York State had the most cases, 883, as of Nov. 2. All these cases involved people who were bitten by mosquitoes while abroad or had sex with an infected individual.

The global market for Zika vaccines could exceed $1 billion per year, in part because the virus is active in tourist destinations, such as the Bahamas, Cayman Islands and Mexico, and travelers will pay for protection, according to the forecasts of financial analysts and industry CEOs.

They also forecast that the worldwide market for tests could be about $400 million per year.

Zika offers Chembio and Codagenix, in particular, the opportunity to demonstrate that their technology is safe, flexible and effective.

The research activities and operations of the two small businesses have been supported by hundreds of thousands of dollars in grants or private equity investment. Funders include the U.S. Department of Health and Human Services and private foundations.

This support helps the businesses to compete with pharmaceutical giants such as Quest Diagnostics, GlaxoSmithKline, Sanofi Pasteur and Takeda, executives said.

Government regulators, in particular, “know our technology platform, have worked with us already and seen that we deliver — that’s a strength,” said John Sperzel, CEO of Chembio, a manufacturer of diagnostic tests for Zika, Ebola, malaria and other tropical diseases.

The company won a contract from HHS in August, valued at up to $13.2 million, for the clinical trials and paperwork necessary to gain approval to sell a Zika test in this country and to further develop a combination test for Zika, chikungunya and dengue.

Chikungunya and dengue are both tropical diseases, transmitted by mosquitoes, and characterized by fever, as is Zika.

Both of Chembio’s point-of-care tests use blood samples and come with a battery-powered reader that provides a result in about 15 minutes.

Foundation grants and government contracts have been vital to Chembio, as it lost money for the past two years while expanding from its core business of rapid tests for HIV and syphilis.

The public company, which has 155 workers, posted a loss of $2.4 million last year, wider than 2014’s loss of $1.1 million. Sales for 2015 fell 12 percent, year over year, to $24 million.

Chembio has appointed managers and secured a distributor to begin selling Zika tests in the Caribbean and Europe. The U.S. Centers for Disease Control and Prevention has committed to buying $330,000 worth of tests for a “surveillance testing program” in Guatemala, Haiti, India and Peru.

This week, Chembio won the first of several regulatory approvals needed to sell its Zika test in Brazil. The company also is pursuing approvals in Africa and Mexico.

Sperzel said Chembio’s competitive advantage is its technology to detect multiple viruses in one quick test.

The financial analysis firm BMI Research of London agreed, stating in February the “developers that will dominate the market are those that can target an entire febrile illness panel [viruses characterized by fever]. These firms will have a market that remains after the Zika outbreak has been controlled.”

Codagenix also hopes technology will give it a leg up on the competition.

The biotech startup has developed vaccines for Zika, influenza and other diseases. The vaccines provoke a stronger response from the immune system because they contain live viruses rather than the dead ones used in many other vaccines. The more robust response means better protection, said company co-founder and President Steffen Mueller.

Codagenix, using a software algorithm, weakens the virus’ impact by changing its DNA. “We knock the virus on its head to make it safe,” he said.

The company created its Zika vaccine in 27 days, and four versions are now being tested in mice in Utah under the auspices of the National Institute of Allergy and Infectious Diseases.

In September, Topspin Partners, a private equity firm founded on Long Island, invested $2 million in Codagenix, to be used to prepare for clinical trials in humans in mid-2017.

“We won’t be first to market, but we think we can make a better vaccine,” said J. Robert Coleman, Codagenix co-founder and chief operating officer. “Our vaccine is less expensive to make because it requires less virus, and that’s important in the Third World” where many cannot afford costly vaccines.

The company hired an additional scientist because of the Zika work, bringing its payroll to seven people. Its main laboratory is in the Start-Up NY tax-free zone at Farmingdale State College.

Codagenix moved to the college in February after four years at Stony Brook University, where it began in the lab of Eckard Wimmer, a company co-founder and microbiology professor. He, Mueller and Coleman invented the technology used by Codagenix.

Wimmer and research scientist Charles B. Stauft still work with Codagenix. But they also are developing a different Zika vaccine using the same technology.

That work, together with a separate project by another researcher to create a Zika diagnostic test using urine samples, is being supported with $25,000 from the University’s School of Medicine.

Wimmer said Long Island’s cooler climate doesn’t protect against Zika, chikungunya or dengue. All are closely related to yellow fever, which he said had been carried by mosquitoes on sailing ships and caused outbreaks between 1791 and 1805 in Philadelphia and New York City.

Wimmer’s Stony Brook colleague, Erich R. Mackow, is studying how Zika interacts with endothelial cells, which line the inner walls of blood vessels. These cells are supposed to keep viruses from reaching the brain and, in a pregnant woman, the fetus.

He also is looking into whether Zika’s reaction with endothelial cells is a reason why Zika lasts months longer in humans than similar viruses.

“The endothelial cells are gatekeepers letting viruses into different places,” said Mackow, who is affiliated with the university’s Center for Infectious Diseases.

Zika takes its name from Uganda’s Zika Forest and was first discovered in 1947. The symptoms are generally mild in adults and include fever, rash, joint and muscle pain, headache and red eyes, according to the CDC.

Local combatants in the war on Zika aren’t limited to biotech companies and research institutions.

Lakeland Industries is selling protective clothing to governments carrying out massive insecticide programs in Miami, Brazil, Colombia and Venezuela.

“The suits are worn when the insecticides are mixed, because some of them, in their pure form, are quite powerful,” said Lakeland CEO Christopher J. Ryan.

The protective suits are produced from U.S.-made fabric in Lakeland factories in China, India and Mexico, where most of the company’s 1,400 employees work.

However, unlike outbreaks of Ebola and bird flu, which generated millions of dollars in sales for the company, Zika will account for $125,000 to $150,000 for the fiscal year that ends Jan. 31.

The public company reported a profit of $8 million last year on sales of $100 million, excluding costs of selling its Brazil operation to executives there.

“Zika may show up next year,” said Ryan, “but . . . I don’t think it will be big money for us.”

Businesses involved in killing mosquitoes and developing diagnostic tests are most likely to benefit financially from Zika outbreaks, according to one expert.

“There is a lot of potential,” said Scott C. Weaver, director of the Institute for Human Infections and Immunity at the University of Texas Medical Branch in Galveston. “But there’s also a lot of questions marks about the long-term outlook for profitability for some businesses, particularly if they are in vaccines,” which face a lengthy approval process by the federal Food and Drug Administration.

Still, he and others said Zika will remain a threat, even though growing numbers of people will gain immunity after being infected.

“Though the incidence of Zika will undoubtedly drop over the next couple of years, there is still going to be a demand for a vaccine,” said Weaver, who leads the Zika task force of the Global Virus Network, a research, education and advocacy group based in Baltimore.

“There is this visceral fear of seeing these babies with severe malformations,” he said. “People are much more afraid of Zika than other viruses that are bigger public health problems” such and dengue and chikungunya.