BETHLEHEM — OraSure Technologies and drugmaker AbbVie have agreed to end an agreement under which the companies have been co-promoting OraSure's OraQuick HCV Rapid Antibody Test in the U.S.
The agreement was originally scheduled to continue through Dec. 31, 2019, and will now end Dec. 31, 2016.
AbbVie is one of several drugmakers that have developed highly effective treatments for hepatitis C in recent years and that's helped spur sales of OraSure's test. But it is trailing in sales to other drugmakers, including market leader Gilead. Merck & Co. also has a competing treatment for the disease.
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The deal was signed in June 2014. OraSure, based in Bethlehem, granted exclusive rights to AbbVie to co-promote the OraQuick HCV test in certain U.S. markets and provided additional services in support of hepatitis C testing in exchange for up to $75 million in payments from AbbVie over the length of the deal.
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When the agreement ends, AbbVie will no longer have to co-promote OraSure tests or detail them to physicians and will have no further financial obligations to OraSure. OraSure will no longer need to pay AbbVie for those activities and can pursue co-promotion deals with other drug companies.
The early end to the deal means OraSure, which has been including payments from AbbVie in its quarterly reports, won't receive the full $75 million in exclusivity payments it would have received over the full term of the arrangement.
Payments from AbbVie helped OraSure end 2016 in the black for the first time in nearly a decade.
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"Our work with AbbVie has been beneficial as we expanded our knowledge of the complexities that make up the HCV testing market," said OraSure President CEO Douglas A. Michels in an investor call following the announcement. "We now have stronger sales and marketing strategies, a more robust training program and a better understanding of the decision-making process of our customers."
OraSure saw a 200 percent increase in revenue from sales of its hepatitis test between 2012 and 2015, when revenues from the test hit $11.4 million. Michels said he expects sales growth to continue inside and outside the U.S.
That growth plus cost savings related to ending the AbbVie partnership should mitigate the loss of revenue from the deal, Michels said.
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A spokesman for AbbVie said the collaboration had benefits, but didn't produce the hoped-for increase in hepatitis C testing.
"Through this collaboration, we enhanced our understanding of the dynamics of HCV testing and care. However, despite efforts by both parties, we did not generate the expected volume of HCV testing in targeted markets," AbbVie said in a statement.
OraSure has new business opportunities in the queue that Michels said show significant promise for the second half of 2016 and beyond. That promise includes a deal to supply OraSure's oral specimen collection kit to a newly created genomics company and a partnership with global health agencies to expand HIV testing using OraSure's self-administered OraQuick HIV test in Africa.
The company is in the final stages of securing funding for its continued development of a Zika virus test, and is close to a deal with an unidentified foreign government to supply its OraQuick HCV tests for a nationwide testing program.
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