Australian medical device manufacturer Atomo Diagnostics will use a $30 million initial public offering to expand its global reach and continue development of its proprietary rapid test technologies.
The company launched its prospectus earlier this month with the Australian Securities and Investment Commission, offering 150 million new shares at $0.20 each to institutional investors and retail customers in Australia and New Zealand.
It had already accepted commitments for $20.5 million from investors prior to launch.
Atomo’s rapid diagnostic testing (RDT) devices are used by healthcare professionals and consumers to screen for a range of diseases and medical conditions, including HIV infection.
Self-testing is a relatively new segment of the HIV diagnostics market, with the first product pre-qualification granted by the World Health Organisation in 2016.
Simplifying the process
Atomo’s technology claims to simplify blood-based medical diagnostic testing processes and reduce errors compared to more complex and conventional blood-based RDT kits.
The HIV Self Test has regulatory approval in Australia and Europe and has been pre-qualified by the World Health Organisation, while its HIV Professional Use Test also has regulatory approval in Australia and Europe.
Chairman John Keith said the company’s technology takes the guesswork out of testing.
“Most current rapid test solutions were first designed for use in laboratories – test kits of this type are typically complicated, requiring multiple components and numerous steps to complete each test, and increasing the possibility of user errors which can cause incorrect diagnostic results and reduced levels of user satisfaction,” he explained.
“Our unique, integrated devices are intended to remove or reduce errors common to existing test kit formats by simplifying the testing process and reducing the number of user steps.”
Since commercialising in 2015, Atomo has sold over 550,000 professional-use and self-use RDTs through distributors in Africa and Europe as well as direct to market in Australia.
The company has sold an additional 430,000 RDTs to other manufacturers of rapid diagnostic tests for use as a sub-assembly in various clinical rapid testing applications.
It generates revenues by offering its products for sale through distribution agreements with international health companies Mylan Pharmaceuticals and Owen Mumford.
Atomo also offers its RDT devices as an original equipment manufacturer product to diagnostic test developers for incorporation as a component in their finished test products.
Currently, under agreements with accredited third party manufacturers, Atomo outsources the manufacture of sub-assemblies and test devices, as well as assembly and packaging.
There are plans to commence assembly of Atomo HIV products during this year at the company’s manufacturing facility in South Africa.
Mr Keith said the IPO would help Atomo expand global sales of its existing HIV test kits and continue the development of other clinical applications for new RDTs.
“The majority of [our] revenue is generated from product sales through third-party distributors – these arrangements allow us to access large global markets without incurring extensive sales and marketing expenditures,” he said.
“This approach provides [us] with an attractive platform from which to grow sales of existing products, while maintaining a focus on developing rapid test products for new clinical applications.
Atomo has the necessary regulatory approvals for distribution and sale in Europe, Africa, South America, Southeast Asia and Australia.
Having secured commercial agreements for its HIV test kits, the company said it would spend time on opportunities to commercialise additional RDT products.
What are RDTs?
Rapid diagnostic tests deliver a rapid result to the patient user or doctor, without the need to collect and transport a specimen sample to a laboratory or deal with the associated delay of hours or days for a result.
RDTs typically deliver a result in 30 minutes or less and are often used as screening tests or to monitor pre-existing conditions, enabling healthcare professionals to test and treat in a single clinical visit.
The tests are used in decentralised settings away from hospital or centralised laboratory facilities including real-time testing on hospital wards, in clinics, pharmacies, community screening programs and in the home.
They are not commonly aimed at diagnosing or confirming disease except in some developing markets that lack extensive healthcare infrastructure.
RDTs are found across a number of diagnostic applications including screening for infectious diseases, detection and monitoring of chronic health conditions and more recently, the promotion of consumer wellness.
Recent research by the Joint United Nations Program on HIV/AIDS (UNAIDS) shows an estimated 37.9 million people across the world live with HIV.
With around 1.7 million newly-infected cases in 2018 and nearly 800,000 deaths in 2017, the organisation said the epidemic remains a significant global health challenge.
Between 2010 and 2014, more than 600 million people received HIV testing services across 122 low and middle income countries, while more than 122 million tests were procured by major international global health donors in 2017 alone.
According to a report by the World Health Organisation and global health initiative UNITAID, over 183 million HIV RDTs were procured globally in 2017, not including an estimate of 150 million RDTs used in China.
The report indicated that demand for RDTs for HIV is likely to increase to over 500 million tests by 2021.
HIV self-testing has recently emerged as an acceptable, safe, and effective way to reach people who are at risk and, in particular, people who may not otherwise undertake tests.
Around 77 countries now have policies in place to support HIV self-testing, while many others have such policies in development.
Mr Keith said Atomo’s HIV Professional Use test and future HIV rapid tests which utilise Atomo’s devices will be entering a competitive market with a number of existing established companies.
Atomo Diagnostics is targeting a listing date of mid-April.
It plans to trade under the ASX stock code AT1.