A Medical Device Daily

Chembio Diagnostics (Medford, New York) and StatSure Diagnostic Systems (SDS; Framingham, Massachusetts) reported entering an agreement that settles litigation between them regarding SDS' barrel patent and other matters.

The agreement, which is also related to three-way agreements between Chembio, StatSure and Inverness Medical Innovations (Waltham, Massachusetts), provides that Chembio and StatSure will equally share the profits, and that they will act jointly in the HIV barrel field towards commercializing this technology and its ensuing products for the HIV market. The settlement combines each company's HIV barrel intellectual property, including an exclusive manufacturing license from StatSure to Chembio of its barrel patent for all HIV applications.

As noted above, StatSure and Chembio also have entered into a series of agreements that provide Inverness with exclusive worldwide marketing rights to Chembio's FDA-cleared, point-of-care, rapid, Sure Check HIV 1/2 product for the detection of HIV 1 & 2 antibodies (see "Agreements," page 4).

This test utilizes StatSure's barrel technology designed to provide accurate and integrated single-use, rapid HIV antibody screening, and to minimize exposure to infectious agents. It will be exclusively manufactured by Chembio for distribution by Inverness.

Recently, the Center for Disease Control and Prevention (CDC; Atlanta) issued new recommendations for routine HIV testing for all Americans between the ages of 13 and 64 (Medical Device Daily, Sept. 25, 2006). Chembio said it anticipates receiving a Clinical Laboratory Improvement Act (CLIA) waiver from the FDA for these products soon, which will expand the number of potential professional sites at which these tests could be performed.

Chembio's Sure Check HIV 1/2 product is approved for use with finger-stick or venous whole blood, plasma and serum, and has sensitivity and specificity performance of 99.7% and 99.9% respectively. These HIV products have a 24-month shelf life, substantially longer than competing products.

SDS' patented barrel technology enables direct collection of a whole blood sample from the finger tip without need for a separate sample transfer device. This format results in a closed system, it says, "designed to reduce exposure to potentially infectious material."

Lawrence Siebert, president of Chembio, said, "We are pleased to end the litigation with StatSure and enter this new agreement so that we can deploy our capital more productively. We look forward to working together with StatSure and Inverness to capitalize on the significant global opportunity for the HIV barrel product."

Steve Peltzman, president of StatSure, said that the settlement "represents an authentic win-win-win for each of the parties involved and certainly jump-starts our ability to commercialize this important technology. We now are partners in the HIV Barrel Field and intend to add and receive significant value to and from this strategic relationship."

Chembio has received FDA approval for its Sure Check HIV 1/2 and HIV 1/2 Stat-Pak rapid tests.

StatSure manufactures rapid immunoassay tests for the detection of sexually transmitted and other infectious diseases.

In other legalities: The Atlanta Journal-Constitution reported yesterday that the CDC is replacing the organization's financial management director and that it comes as federal investigators are investigating allegations concerning the alteration of payment records.

The newspaper last month reported that the Department of Health and Human Services is investigating whistle-blower charges that CDC officials have altered or falsified payment records to pharmaceutical companies to cover up violations of the federal Prompt Payment Act that establishes late fees and penalties for past-due payments.

The newspaper said that John Tibbs, in an e-mail to CDC employees, said he was transitioning from director of financial management to a new job as chief of the agency's Office of Workforce and Career Development. Bill Nichols, previously head of the agency's procurement and grants office, will take over as head of financial management.

A CDC spokesman rejected the possibility that the job shifts were related in any way to the federal investigation.