Michael Iskra, executive vice president of commercial excellence and strategy at Ortho, said his company is focused on delivering quality results and the operational financial impacts of diagnostic testing as well.
In late January, Ortho Clinical Diagnostics Holdings Plc, a vitro diagnostics company based in Raritan, New Jersey, launched its initial public offering on the Nasdaq.
Ortho debuted on Wall Street with shares priced at $17. The company's IPO came weeks after Clover Health, the Nashville-based technology-oriented Medicare Advantage company, made its public debut.
Michael Iskra, executive vice president of commercial excellence and strategy at Ortho, spoke with HealthLeaders Friday morning to break down the company's decision to IPO, how the pandemic has affected the diagnostics space, and what he has to say to fellow healthcare financial executives in the provider and payer sectors.
This transcript has been edited for clarity and brevity.
HealthLeaders: Can you walk me through the decision to IPO and the reasoning behind it?
Michael Iskra: I think this has been the natural progression of where [Ortho] has been heading ever since we became a stand-alone company many years ago to focus on our customers and be a pure-play diagnostics company. This was just a step in the progression. Obviously, there's access to capital markets that helps us quite a bit in deleveraging and it's going to allow us to participate in other things within the market when we're a little less leveraged.
From a strategic point of view, it's just the right step and now I think the markets create the opportunity to take advantage. Good credit to our team, in the summer of last year we decided that we wanted to pursue this and move quickly. I think that's a great testament to the team and how nimble we are now at Ortho and what we expect to go to do in the future.
HL: What are the most significant drivers for the diagnostics space and what are the biggest obstacles?
Iskra: One of the high-level macro trends is that this an amazing time for diagnostics.
When you think about where we contribute to healthcare, our tag line is 'Every test is a life,' that's our focus. We know every specimen that's on our instruments is directly related to somebody's life and we've always valued that. Now, we believe the world values that, particularly in the face of COVID.
I think there's a way for people to start looking at the value, not just of Ortho, but diagnostics [in general.] The laboratory professionals are folks that I don't think were always considered the front-line healthcare workers, but through this experience in the pandemic have been.
There's a lot of recognition for our industry and all that are part of it. I think that's probably a big tailwind for us as an organization, but there are always headwinds. There are always challenges and it's a competitive environment. But again, we think being able to de-lever the company will help us quite a bit to make sure that we have access to funds, if need be, to take advantage of market opportunities.
HL: How has the pandemic affected the diagnostics sector of the healthcare industry?
Iskra: It's a great question and it's something, frankly, we're proud of here at Ortho. To your point, this time last year, we had no idea what was coming. Every person, every company reacted initially with shutdowns and slowdowns, but what we quickly pivoted to is, 'Well, wait a minute. What's needed are some of the things that we're capable of.' We needed testing and we needed to quickly understand the prevalence of the disease.
We had two of the first emergency use authorizations on the market for antibody testing. The long story short is that these tests were critical initially in terms of prevalence and how quickly the disease was spreading. What we saw was a tremendous amount of this was in people that were asymptomatic and antibody testing helps identify where that disease spread was. We were out there early doing the highest-performing tests on the market with high specificity, which was critical, and a low prevalence scenario, which we had initially with COVID.
More recently, at the end of last year, we did release an antigen test for the detection of COVID, which we think is critical when you think about 70% or so of our customers are in hospitals in the U. S. A large number of those are in community and rural hospitals, so when you think about the limitations on testing that we've all heard about, the release of our antigen test is going to help our customers. With the instruments in their laboratories that they already have today, they now have the ability to run high throughput antigen testing. That's going to help them get their heads above water.
HL: Do you have anything to say to the hospital and health system leaders in our audience?
Iskra: Our focus is our tagline: 'Every test is a life.' What we know is not just our technology, but our company enables our laboratories to do that. It's about us enabling the hospital laboratories so that they can do their job, so the laboratory can get the results out on time for clinicians, that they're the highest quality results possible so that that can be done faster.
When we look at healthcare in general, we do it with an eye on operational financial impacts as well. We know there's pressure on reducing costs in healthcare and we believe that our instruments, which are not just our tests but the analyzers we use, are all geared to deliver the lowest total cost of ownership for our target markets. That's what we think we can prove for a hospital laboratory: they can do business with Ortho and feel like they're getting the best quality results but also getting a solution that fits financially.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
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