Applied DNA Provides Business Update on COVID-19 Diagnostics and Testing

Applied DNA Sciences, Inc. (NASDAQ:APDN) (the “Company”), a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing, today announced that its safeCircle™ pooled surveillance testing service has seen a 158% increase in the daily average number of tests performed to date in January 2021 compared to December 2020. The increase is chiefly the result of the scale-up of certain testing contracts and from the acquisition of new clients. Launched in the fourth quarter of fiscal 2020 (ended September 30, 2020), safeCircle now counts 33 primary/secondary/higher education institutions, private client, local government, and businesses as clients.

Concurrently, the Company stated that it is increasing production of its Linea™ COVID-19 Assay Kit (the “Assay Kit”) and sample collection kits to meet expected demand from existing customers, from its safeCircle service that is powered by the Assay Kit, and due to heightened interest in the Assay Kit following a recent U.S. Food & Drug Administration’s Food & Drug Administration (FDA) alert that identified the assay as an EUA-approved molecular diagnostic test that can potentially identify certain SARS-CoV-2 mutations (the “FDA Alert”). The Company also said that Applied DNA Clinical Laboratories, LLC (ADCL), its wholly-owned subsidiary, is on track to submit a request for CLEP-CLIA re-inspection during the current quarter ending March 31, 2021. If granted, CLEP-CLIA certification would enable ADCL to serve as a diagnostic laboratory that would allow for it to conduct diagnostic COVID-19 testing.

“Positive business trends for safeCircle have carried over into January and are further enhanced by the growing awareness of our platform regionally and through our partnership with CLEARED4. The profile of prospective clients is changing with more and larger opportunities in our sales pipeline,” said Dr. James A. Hayward, president and CEO.

“The FDA’s recent Alert has the potential to be a catalyst to revenue,” concluded Dr. Hayward. “We believe our assay is one of the few cost-effective and rapid ways a laboratory can detect S-gene target dropout that serves as a potential indication of a SARS-CoV-2 variant, including the U.K.’s B.1.1.7 that is characterized by increased transmissibility. We believe the ability to identify new potential COVID-19 variants with an EUA-approved molecular diagnostic test that is in-market today is essential in the continuing fight against COVID-19. Diagnostic labs using molecular diagnostic tests that do not have the ability to discriminate potential COVID-19 variants from wildtype are unable to quickly and easily identify patients that are potentially infected with a more infectious variant, which we believe may lead to further infection spread.”

safeCircle™ Pooled Surveillance Testing Service

In recent weeks safeCircle has added new clients. They include:

• The U.S. division of a Germany-based international jewelry company for the testing of its New York-based staff;
• A private higher education institution based on Long Island, N.Y., for the testing of its residential and student-athlete populations;
• A previously announced award with a local county (N.Y.) government.

Ramp Up in Production of Kits utilized in COVID-19 Sample Collection

The Company is also increasing the production of sample collection kits utilized in surveillance testing by a factor of four to meet the testing scale-up of the Assay Kit’s largest customer and for use by new safeCircle clients.

CLEARED4 Partnership Generating New Clients

Applied DNA’s recently announced partnership with CLEARED4, a provider of return-to-work health safety solutions, has begun to bear fruit. In addition to being utilized as a mobile-friendly, value-added option for the management of aggregate results testing and reporting to a key safeCircle client, Applied DNA is now providing CLEARED4 services to a second safeCircle client, the aforementioned jewelry company. Applied DNA expects to onboard a third new client this week, the aforementioned private higher education institution. The Company believes that the combination of its safeCircle offering with the CLEARED4 platform is a compelling service in a marketplace that is in search of an accurate, easy-to-employ, faster-turnaround testing service that incents participation.

Linea™ COVID-19 Assay Kit (Test) Production

The Company’s largest customer for i