The startup that is the talk of the town at present isn’t one that aggregates taxi rides, or delivers food to your doorstep, or an online retailer; rather, it is a small molecular diagnostics company based out of Pune. And it’s all for good reason.

The company, Mylab Discovery Solutions, is at the forefront of an attempt to increase India’s testing capacity to screen potential Covid-19 patients. On March 24, Mylab said that it was the first company to get commercial approval from the Central Drugs Standard Control Organisation (CDSCO) for its Covid-19 test kit.

The novel Coronavirus, which originated from Wuhan in China, has resulted in a global pandemic, and has afflicted around 2,000 people in India and resulted in 60 deaths so far. Globally, around 940,000 confirmed Covid-19 cases have been reported. It is expected that with increased testing, the number of Covid-19 positive cases in India will also rise. Though that is bad news in the short-term, it is much needed to contain the spread of the virus by identifying those affected and quarantining them.

The Pune-based company, founded in 2016, employs around 55 people, all of whom are playing a key role in the firm’s project to offer cost-efficient testing kits to the healthcare agencies, across state governments, the central government and various private sector hospitals and diagnostic chains.

Shailendra Kawade, executive director, Mylab Discovery Solutions, attributed the swiftness with which his company could secure approval for the test kit to its existing capabilities of making complex test kits for investigations that need stringent standards.

Speaking to Fortune India, Kawade explaned that the medical devices segment for test kits was divided into four categories—A, B, C, D. Category A is for the simplest tests, D is for the most complex such as ID-NAT (Individual Donor Nucleic Acid Amplification Test) screening kits used by blood banks and hospitals. From its manufacturing unit in Lonavala, midway between Mumbai and Pune, Mylab also produces test kits for the detection of HIV and Hepatitis B and Hepatitis C.

“We were the first company from India to already have an approval for making test kits that falls under the D category. So we were in the best position to go for making test kits for Coronavirus, which falls in the C (relatively less complex) category,” Kawade said. “Around end of January, when we saw the Coronavirus spread from China to other parts in Europe, we sensed that it might find its way to India as well and started work on developing these test kits then itself.”

It took Mylab all of six weeks to develop and standardise the test and submit it to the CDSCO and ICMR (Indian Council of Medical Research).

The Covid-19 test kits that Mylab makes uses a swabbed sample from a patient’s respiratory tract, which allows for real-time and rapid detection of whether a patient is Covid-19 positive. It is better than a blood test, which can also screen for the virus, says Kawade. This is because a blood test assesses the formation of antibodies in a human system to fight the virus, to conclude if a patient is Covid-19 positive. It usually takes around 8-10 days for these antibodies to form—thereby delaying the result of the investigation—and sufficient antibodies may not even form in a body with a weak immune system.

Mylab, which sells the test kit for for ₹1,200 each, has been ramping up capacity to cater to the ever-growing demand in the country.

“It was a situation that no one was prepared for. But Mylab has been able to develop the test and ramp up production in record time,” says Sujit Jain, advisor and mentor, corporate strategy, Mylab, and also an investor in the company. “We started with an initial capacity of making 50,000 tests per week, which has been ramped up to around 40,000 tests per day.”

Now, the capacity is expected to go up manifold as the company has been able to secure investments from a clutch of investors, including Adar Poonawalla, chief executive officer of the Serum Institute of India and Abhijit Pawar, chairman, AP Globale group, both of whom are based in Pune.

Though the exact details of the investment haven’t been made public, Poonawalla told Fortune India that it was a multimillion dollar, structured transaction, linked to certain milestones. The investment will allow Mylab to increase its capacity to around two million test kits a week.

Poonawalla said that he heard from a common friend that Mylab could do with the funding to expand its manufacturing capacity for these test kits and that the deal was finalised in two to three days. “The fact that the country can significantly benefit from this investment at this time of crisis motivated me to take the decision,” he said.

“Mylab already had some expertise in making test kits for the screening of HIV and HPV (human papilloma virus) and that tie in with our own efforts to develop vaccines in these areas,” Poonawalla said, explaining the rationale behind the investment. “We have been trying to expand our footprint in India and abroad for the early detection of these viruses.”

Serum Institute’s backing can also help take Mylab global eventually. Kawade observed that the partnership was more strategic than financial in nature since testing and vaccine development go hand in hand. “The money will help us scale up our operations and meet the demand in India and globally,” he said.

“We are always happy to help any company that makes a positive impact on society. Mylab is one such company that has an entire range of products that can be very useful for not only India, but the world at large, even after the current pandemic is over,” Pawar told Fortune India. When the idea of an Indian company making test kits that can substitute imports in a timely and cost-efficient way was taken to Prime Minister Narendra Modi, the Prime Minister's Office played a key role in expediting the process of bringing these kits into the market, Pawar added.

Mylab has also secured a ₹1-crore grant from Action Covid Team Grants, a grant set up by India’s top angel investors and venture capitalists, including SoftBank, Accel, Tiger Global, Ritesh Agarwal (founder and CEO, OYO Rooms) and Nandan Nilekani.

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