Applied DNA Forms Clinical Testing Subsidiary to Maximize Utility of FDA EUA-Approved Linea™ COVID-19 Assay Kit and Expands Utility with Successful EUA Amendment

Magazine for Textiles, Clothing, Leather and Technology – Subsidiary to Advance Commercial Development of Diagnostic Tests for Virology, COVID-19, Oncology;
– Currently in Negotiations for First COVID-19 Testing Contracts; Anterior Nasal Swabs to Make Testing More Accessible.

Applied DNA Sciences Inc. (NASDAQ: APDN) (“Applied DNA” or the “Company”) a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing that enables in-vitro diagnostics, and pre-clinical nucleic acid-based therapeutic drug candidates, today announced the formation of a wholly-owned subsidiary, Applied DNA Clinical Labs, LLC (“ADCL”), dedicated to the commercial development of its tests in Virology, for the detection of COVID-19, and in Oncology, for the detection and enumeration of invasive Circulating Tumor Cells (iCTCs). With the formation of ADCL, the Company is executing on a strategy to expand its market reach through value-added services complementary to a growing portfolio of diagnostic assays attractive to a broader number of qualified labs. ADCL allows Applied DNA to be a direct beneficiary of the development of its own diagnostic beyond the sales of kits to qualified laboratories and provides the clinical sampling framework necessary to obtain the data required by State and Federal regulatory authorities to develop and improve diagnostics and vaccines in the face of a pandemic with rapidly shifting genetics and infectious behavior.

In mid-May, Applied DNA received Emergency Use Authorization (“EUA”) for high sensitivity, high-throughput complex molecular test for SARS-CoV-2, the coronavirus that causes COVID-19. The Linea™ COVID-19 SARS-CoV-2 Assay Kit is a real-time polymerase chain reaction (RT-PCR) test for the qualitative detection of SARS-CoV-2 RNA in respiratory specimens. It provides a high-throughput solution to help laboratories address the urgent need for patient testing during the Coronavirus pandemic.

The Company also announced that the amendment of its EUA was approved by FDA to include extraction and concentration of the viral RNA by a magnetic method of nucleic acid extraction that lends itself easily to high throughput scaling with robotics and diversifies the two extraction methods already covered by the existing EUA. A series of EUA amendments are planned to introduce automation for increased throughput and accuracy, gain approval for additional RNA extraction methods and PCR devices to expand the footprint where our EUA assay can be used, develop point-of-care testing and simplify sample acquisition from patients.

Commenting on the amendment, Dr. James Hayward, president and CEO of Applied DNA, said, “We are extremely grateful to our collaborators at Stony Brook University Hospital and to the FDA for their guidance during the development and validation of our Linea COVID-19 Assay Kit. Our goal is to service the COVID-19 patient community and their families and to facilitate the reopening of universities and businesses with reliable, well-tested science. The demand for COVID testing is diverse, from asymptomatic patients and those in the early stages of the disease to the commercial imperative to operate.”

The Company believes that as the demand for testing grows and diversifies, the existing approval of the Company’s Linea COVID-19 Assay Kit for use with anterior nasal swabs will facilitate uptake by certified testing labs. As opposed to nasopharyngeal swabs, anterior nasal swabs only enter less than 1 inch into the nose, allowing for sampling with minimal irritation or discomfort. Additionally, anterior nasal swabs may be self-collected at a healthcare location or collected by a healthcare worker.

Dr. Hayward continued, “With anterior nasal swabs, we believe patient compliance is not an issue. This is a simple approach to early testing, repetitive testing if begun early in infection, or high-frequency testing, such as in schools, universities, government offices, and companies struggling with the reopening. When combined with our high-sensitivity and high-throughput Linea COVID-19 Assay Kit, we believe the combined platform to be well suited to combat both the healthcare and economic challenges of the pandemic.”
ADCL, the Company’s new subsidiary was formed to enable clinical testing of patient specimens using methods developed by the Company’s research teams. Access to clinical specimens will also facilitate more rapid development of improvements and new assays. All of these continuous improvements are designed to help drive sales to other approved testing labs.

ADCL was also formed to facilitate the use and development of the Company’s Liquid Biopsy platform for detecting iCTCs in the blood of cancer patients, far simpler and safer than surgical or needle biopsies, and is already in use under contract in a Phase III clinical trial of a promising drug for the treatment of Stage IV pancreatic cancer. The trial involves 3,000 samples and the quantification of metastatic cancer cells in the blood. Dr. Hayward continued, “Eventually, with the utility of ADCL, we plan to seek regulatory approval for our iCTC assay and add it to the tools used in modern oncology to ensure better patient outcomes.”

The Company has obtained its Permanent Facility Identifier for ADCL, has hired a New York State Licensed Clinical Laboratory Director for Oncology and Virology and Certified Laboratory Scientists, and has applied for a license from the New York State Department of Health.

There can be no assurance that this license will be obtained, or that FDA will maintain the Emergency Declaration that enabled the EUA program for COVID-19 diagnostics. There can be no assurance that the Company will obtain approved 510K status (or other necessary regulatory approval) for its COVID-19 In Vitro Diagnostics in the event that the Emergency Declaration is lifted. In addition, the Company’s iCTC assay is currently limited to RUO (Research Use Only), and there can be no assurance that the Company will obtain the necessary regularly approval for its iCTC assay to expand its use outside of RUO limitations.