Irvine Firm Expands Local Manufacturing, Gears Up for New Offerings and Markets

Tej Patel believes medical tests should be easier to diagnose. Luxury Mascara Extrusion Tube

A decade ago, he co-founded Fluxergy with the knowledge that low-income countries like India or in Africa don’t have many testing facilities.

“It’s really difficult to do any kind of lab work” in these countries, Patel said during a tour of the company’s manufacturing facilities in Irvine.

“Many of these places may have one central lab in the entire country.”

Hence, Patel began building a testing system that can be conducted at the point of care for a patient, and thus reduce the need for large central laboratories.

The company has raised $80 million, grown to more than 100 employees and expanded its Irvine operations from a 5,000-square-foot office to several buildings totaling 90,000 square feet. The firm has what Patel says is “a robust IP product portfolio.”

The company’s name is a “combination of flux and synergy,” Patel said, acknowledging that while difficult to roll off the tongue, “people remember the name.”

Patel, who was born in Pomona and grew up in Arizona, annually visited India, where his parents emigrated from.

“You definitely see firsthand the lack of infrastructure” in India, Patel said.

After graduating with a master’s degree in aerospace engineering with specialization in fluid dynamics from the University of California, San Diego, he went to work at San Diego’s MagCanica, where he managed engineering projects for various clients including the U.S. Navy, Mercedes Benz and Formula 1 sports racing.

At MagCanica, he worked with Ryan Revilla, another UCSD graduate with a degree in aerospace engineering. The two engineers and Jonathan Tu, a business administration graduate of Chapman University, decided to start their own company building testing kits.

Revilla is responsible for manufacturing and technical development while Tu is the chief financial officer.

Fluxergy’s biggest investor is John Tu, father of Jonathan Tu and chief executive and co-founder of Fountain Valley’s Kingston Technology Co., Orange County’s third largest private company and the world’s biggest independent maker of computer memory products.

John Tu, who has invested more than $50 million into Fluxergy, has previously told the Business Journal that he believes the founders are making “life-saving technology.”

Is it odd that aerospace engineers have entered the chemistry industry?

“While we don’t have biology or chemistry backgrounds, we’re very engineering focused,” Patel said. “We have a lot of experience in the basic core technology of what we do.

“We were pretty confident that with our engineering experience, we could take our skill set and come up with a valuable solution.”

That expertise includes using their experience in printed circuit boards and applying them to tests.

“A lot of the technology that we’ve developed relies on similar technologies of the printed circuit board industries,” Patel said. “We have a relatively new approach.”

As the company grew, it hired experts in biology and chemistry. Fluxergy has designed and built everything in-house, from the circuit boards to the robotics to the software.

The company has three main products: an analyzer, a testing card and an internet cloud interface.

The first two could be compared to the classic razor and blade strategy, Patel said Its razor is the analyzer, a machine that costs around $3,000 to $4,000 and is the size of a personal computer.

The blades are Fluxergy’s cartridges, which look like printed circuit boards. “We’re not doing printed circuit boards, but we use similar techniques to reduce manufacturing costs. That manufacturing is very cost effective. It’s scalable.”

The Irvine facility is currently capable of manufacturing 100,000 cartridges a month, with a goal of 1 million, Patel said.

“Manufacturing is a core part of what we do.”

Patel has avoided contract manufacturing, saying it’s more cost effective to have its development team work closely with manufacturing and automation teams.

“There are definitely difficulties to manufacturing in California, but one of the great things with the methodology that we’ve developed and our approach to manufacturing is we can be cost efficient.”

He added that “the talent pool is good in California.”

Unfortunately for Fluxergy, the company is in the same industry as the notorious Elizabeth Holmes, who was convicted for defrauding Theranos investors.

Patel said he and his colleagues knew from the beginning that Theranos’ promises were questionable.

“The claims that they were making were crazy, like being able to do 100 different tests on a single drop of blood. It sounded stupendous. If it was true, that’d have been revolutionary.”

Ironically, Holmes did provide a valuable service by showing “that there was demand for point of care testing. It wasn’t necessarily a bad thing.”

Fluxergy also received similar skepticism from investors.

“We got a lot of questions. It brought more scrutiny, with investors saying, ‘I want to make sure your data is actually valuable.’

“Our systems are totally different. We have a significant amount of data showing its use in the field.”

During the testing process, a technician places a sample from a patient into a dropper bottle system that then puts liquid into the cartridge. It is then inserted into the analyzer that can be programmed to handle a variety of tests like salmonella or liver enzymes. Results can take minutes up to hours, depending on what is being tested.

Last year, Fluxergy announced that it obtained CE marking for its one-hour COVID-19 RT-PCR test, for use by healthcare professionals as an in vitro diagnostic.

The CE marking allows Fluxergy’s testing platform to enter the European Union market and any other markets that accept CE marking as valid regulatory approval.

While COVID-19 might be ebbing in the U.S., Fluxergy is expecting a demand from poor countries where the pandemic may last another two to three years.

The eventual aim is that the analyzer can be used in doctor offices and community centers, replacing systems where tests are sent to central laboratories. The company is also studying the platform’s potential in areas such as chemical and food servicing.

“The hope is that sometime in the future, this will provide at-home testing,” Patel said.

For now, the company’s first commercial product targets the veterinary industry, particularly horses, because it can more quickly enter a market that has fewer regulations. The growth of pet care in the U.S. makes it “an exciting market,” Patel said.

In the coming months, the company will be announcing several new products, particularly for the European Union and the Mideast. Patel declined to reveal the company’s annual revenue run rate, saying it’s early.

When asked about an initial public offering, Patel said, “We’ll see.”

“We’re right now at an exciting stage. A lot of growth is going on.”

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