Atomo Diagnostics
ASX code : AT1
It speaks volumes that emerging Australian biotech company, Atomo Diagnostics, chose to list on the ASX during the first Australian lockdown of the 2020 COVID-19 pandemic.
For the Sydney based company, it was possibly the case of being in the right place at the right time, and the market appears to agree with the share price up around 60% ($0.32) in the seven months they’ve been listed.
Background.
Established in 2010, by founder and CEO, John Kelly, Atomo Diagnostics develops and commercializes blood based rapid diagnostic test devices.
As you will see in the above video, Atomo Diagnostics simplify diagnostic testing for certain diseases.
Using old technology, a clinician would take a blood sample from a patient, next the specimen would need to have it transported to a laboratory, then wait hours/days for the results
While Atomo Diagnostics Rapid Diagnostic Tests (RDTs) don’t entirely eliminate the need for a lab, they do provide a user friendly, small device that can be taken to any imaginable location and still deliver fast, accurate results.
How do they work?
Atomo Diagnostics RDTs utilize a technology platform called “Lateral Flow Immunoassay”.
In lateral flow assay, a liquid sample, such as blood, is applied to the sample pad and is wicked through the lateral flow of the device. The sample pad acts as a filter to ensure the accurate and controlled flow of the sample.
The conjugate pad receives the sample. If the target substance is present, conjugated proteins and labels in the pad will bind to the target substance.
As the sample migrates along the strip, binding reagents situated on the membrane will bind to the target substance at the test line. This will cause a colored line to form to indicate that the target substance is present, in the case of a positive test.
The sample will then pass through the nitrocellulose membrane into the absorbent wicking pad which will absorb the excess sample.
RDTs typically deliver a result in 30 minutes or less. As such, RDTs are typically used as screening tests or to monitor pre-existing conditions and are not commonly used to diagnose or confirm disease except in some developing markets that do not have extensive healthcare infrastructure
To assist visualizing how these tests work I’ve included a company produced, video of their rapid HIV test. All the diagnostic tests work in a similar manner.
Which diseases will they detect?
Atomo Diagnostics have an already approved RDT covering the HIV virus and more recently an approved RDT covering Malaria which will detect all 4 common strains of that particular condition.
Other product under development or licensed from a partner include diagnostics for hepatitis C, anti-microbial resistance and a high sensitivity pregnancy test with possible application in cancer screening and allergy detection further down the road.
Any other products?
Atomo Diagnostic also provides a platforms for the OEM market.
Diagnostics companies can utilize the advanced, simple to use devices provided by Atomo to expand their own product offering.
The picture below will give you an idea of the range.
In breaking news...
However, in what could be a company defining development, Atomo Diagnostics have pivoted quickly, mid pandemic, to fill an unmet need for rapid diagnosis of COVID-19.
The last 6 months has seen Atomo not only develop, but also gain Australian regulatory (TGA) approvals for both their COVID-19 antigen and antibody RDTs.
The AtomoRapid COVID-19 RDT is an integrated rapid blood test designed to determine if a patient has developed antibodies which would indicate exposure to the COVID-19 virus. An antibody response is typically considered to indicate some potential level of immunity for a period of time.
Unlike other Atomo products, the antigen test does not utilize a blood sample but instead a nasopharyngeal swab test is designed to screen for antigens produced in response to COVID-19 infections.
A positive result to this test implies current viral infection.
You can view the company press release for both the COVID-19 RDTs by following the links below.
What does the next 12 months look like?
In the next 12 months Atomo hopes to announce the commercialization of a further two finished test products as well as launch a COVID-19 rapid test to the huge North American market.
Needless to say, the company expects to significantly grow revenue in the next few years which will include an expansion into new markets as regulatory approvals permit.
Financial details.
In the next 12 months Atomo hopes to announce the commercialization of a further two finished test products as well as launch a COVID-19 rapid test to the huge North American market.
Needless to say, the company expects to significantly grow revenue in the next few years which will include an expansion into new markets as regulatory approvals permit.
Financial details
Share Price $0.315 (07/12/2020)
Market Cap $131M
Current Cash Balance $26.4M
FY20 Revenue $5.37M. Up circa 10x on previous year
FY20 EBITDA loss of $2.38M. Down from $4.08M the previous year
FY21 Q1 sales around $2.5M.
As can be seen from the info above, Atomo is growing strongly. The current cash balance and reducing rate of cash burn implies that a capital raising will not be required anytime soon.
Conclusion.
There is more to play out in the current pandemic and despite recent good news on the vaccine front, there will be a significant, ongoing opportunity for Atomo.
It’s likely that RDTs will play a role in confidently opening up the global economy well into the future. Air travel operators and airports alone are likely to require extensive testing to resume regular international operations. Opportunities abound.
**Disclosure**
Atomo Diagnostics has been on my radar for a number of months and you’ve probably guessed, I’m a huge fan. As of the date of publication I do not hold any shares, but am likely to buy in soon.
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