New York Firm to Build CLIA Labs in Shipping Containers

‘Pop-up’ clinical labs will test for SARS-CoV-2 and can perform other types of diagnostic tests

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CEO SUMMARY: In many respects, the COVID-19 pandemic is like a gold rush for entrepreneurs. Federal and state governments, colleges, employers, school districts, and other entities need COVID-19 tests and tens of billions of dollars are available to pay for such tests. This modern gold rush has encouraged companies such as Amazon and Alphabet/Google to build their own clinical labs. Now two companies are teaming up to design, build, and install CLIA-certified labs in shipping containers that can be located almost anywhere.

Demand for COVID-19 testing continues to outstrip supply, as the nation’s clinical laboratories struggle to increase the number of SARSCoV-2 tests they perform daily. This gap between supply and demand has caught the attention of employers, universities, and school systems that need COVID-19 tests and are willing to build their own clinical laboratories.

To meet this demand for more clinical laboratories, two companies joined forces and announced they will build CLIA-compliant laboratories in shipping containers. This development is the latest example of entrepreneurs offering a product that new competitors to existing clinical labs can use to perform both COVID-19 tests and routine medical laboratory tests.

The idea behind the plan is that two companies—SG Blocks Inc. in New York and Clarity Lab Solutions in Boca Raton, Fla.—will build, deliver, and install pop-up, scalable clinical laboratories in parking lots, lawns, fields, or other open space outside hospitals, big companies, universities, and other entities needing onsite testing and fast results, said Dan Leger, president of Clarity Lab Solutions and president of Clarity Diagnostics Solutions, a division of the lab that formed the joint venture with SG Blocks under the name Clarity Mobile Venture LLC (CMV).

‘Clinical Lab-in-a-Box’

In a joint news release Sept. 1, the companies said these labs-in-a-box initially will do testing for the coronavirus for employers, universities, and hospitals nationwide. Later, the pop-up labs will be used to test for other conditions, such as influenza, other upper respiratory illnesses, cancer, opioids, and urinary tract infections, the companies said.

For independent lab companies and hospital-based clinical laboratories, these shipping container CLIA-compliant lab facilities could become a serious competitor. First, they can fill the niche that drivethrough COVID-19 specimen collection sites are providing now. Second, they are scalable, meaning one, two, or more shipping containers could be added to each site to increase lab test capacity as needed.

“The CMV labs will contain the molecular testing instruments, information systems, plumbing, lighting, electrical, heating, and air-conditioning equipment used to run molecular tests 24 hours a day, seven days a week if needed,” stated Paul Galvin, CEO of SG Blocks. Galvin’s company describes itself as a fabricator of container-based structures and buildshomes, retail shops, and healthcare facilities for a variety of clients.

First Container Lab Delivery

The first such container-based lab is scheduled for delivery in about 12 monthsand will be near Clarity Diagnostics’ lab in Boca Raton, said Leger. At this site, Clarity will run the GeneFinder COVID-19 PlusRealAmp Kit from Osang Healthcare, aSouth Korean company.

On April 18, under an emergency useauthorization, the FDA allowed Osang to sell its reverse-transcription polymerase chain reaction test kit in the United States to CLIA-certified, high-complexity labs. Korea Biomedical Review reported that the test kit detects three gene types: E gene, RdRP gene, and N Gene. In May, SG Blocks signed a one-year, non-exclusive agreement to market, sell, and distribute the Osang test kit in the United States.

In an interview with The Dark Report, Galvin said the pop-up labs are expected to be placed in high risk, densely populated, or rural areas. SG Blocks has had interest from employers, universities, hospitals, clinical laboratories, and other entities for these container-based labs to provide on-site testing, he added.

Therefore, the container labs could supplement independent and hospital-based labs needing to add testing capacity. (See “Employers, Others Looking to Build New Clinical Labs,” and “Amazon Building Labs To Do Covid-19 Testing,” TDR, Aug. 3, 2020.)

SG Blocks recently launched prefabricated healthcare facilities it calls the D-Tec suite, which offers five sizes of structures. Grimshaw, an international architectural firm, designed each one, SG Blocks said.

The shipping container-based clinical labs would be 20 feet long, eight feet wide, and eight and a half feet high. Smaller units would contain two such shipping containers and larger units would have five containers or more. In the larger containers, Leger said, Clarity Lab Solutions could run 5,000 tests in nine hours or almost 15,000 tests in just over 24 hours.

“With SG Blocks, we’re designing different configurations of shipping container laboratories that will be scalable and that will allow medical lab testing at whatever volume a facility needs,” said Leger.

Supply Chain Shortages

For its clients in Florida and throughout the United States, Clarity now runs thousands of COVID-19 tests, he said. Like other labs, Clarity has found that reagents, plastics for transport media, and test kits often are in short supply. Since SG Blocks has the distribution agreement with Osang Healthcare, Leger expects to be able to deliver enough COVID-19 test kits to support high-capacity testing without shortages, he said.

“The concept behind our joint venture with SG Blocks is to break the barriers of capacity issues around the country with reagents, plastics, and test kits used for SARS-CoV-2 testing,” he commented. “Having this relationship will give us an immense amount of scalability.”

First Container Lab

By about this time next year, the two companies plan to have the first container lab placed near Clarity’s lab in Boca Raton, said Galvin. “Clarity Diagnostics has engaged us to do a design and build for a redundant facility outside of their Florida lab to provide them with a backup facility,” he added. “Because Florida has unique weather conditions, it will be made from a heavy-gauge steel shipping container and be hurricane resistant. Right now, we’re doing a market analysis to see where to put this lab facility.”

One risk in the SG Blocks–Clarity strategy is whether the COVID-19 pandemic is still a significant concern 12

months from now, when it delivers its first CLIA-compliant clinical laboratory in a shipping container. If the pandemic diminishes in coming months, there may not be enough demand for COVID-19 tests to justify this lab facility. However, the more important fact of this development is that the two companies are ready to sell CLIA-compliant clinical laboratory facilities built in shipping containers to any interested party for any type of clinical lab testing.

Concept for a CLIA lab in a shipping container

Why Not Open Labs Near Drive-Through Sites?

ANY PLAN TO ADD CLINICAL LABS IN SHIPPING CONTAINERS raises the question: Why not set up drive-through specimen-collection sites for COVID-19 testing, as many cities and states have done? In this arrangement, specimens collected at drive-through sites are sent overnight to clinical labs that run the tests and provide results within 24 hours.

For Dan Leger, president of Clarity Lab Solutions, the answer is that the entities most interested in container-based clinical laboratories are employers and universities that want turnaround times for COVID-19 test results within 24 hours or less.

“Businesses, schools, and other organizations require certain turnaround times—meaning faster results than what they currently get from hospital labs or independent labs,” Leger explained. “Our container-based clinical labs can provide faster results because we’re putting additional capacity onsite. This speeds up time to result because thelabs in shipping containers will have the capacity to run 5,000 molecular tests for COVID-19 in nine hours.

“We have a local presence here in Boca Raton, and we believe that having a local presence is the key to delivering faster COVID-19 test results,” he said. “While we do a lot of local samples, some of our samples come from all over United States. Our goal is to provide the turnaround times that our clients need.”

Contact Dan Leger at 941-917-1173 or info@claritylabsolutions.com.

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