Medical device company Atomo Diagnostics (ASX: AT1) has penned a supplementary deal with existing business partner NG Biotech that could see over 2 million additional COVID-19 antibody tests being sold by the end of the year.
The news comes hot on the heels of a recent French study carried out at the Hopital Bicêtre in Paris. Researchers tested 256 samples from 101 patients hospitalised with SARS-CoV-2 infection and discovered that sensitivity, specificity, positive predictive value and negative predictive value were 97%, 100%, 100% and 96.2% respectively, 15 days after the onset of symptoms.
According to Atomo, its newly developed AtomoRapid COVID-19 test is an integrated blood test device that determines whether a patient has developed antibodies in response to the COVID-19 virus.
To date, NG Biotech has ordered more than 1.5 million Galileo devices to be used in its own COVID-19 antibody test in France.
Test results are generated from a drop of blood within 15 minutes which drastically improves upon existing testing methods that require laboratory testing and several days turnaround before a positive or negative result is obtained.
Atomo stated that its Galileo rapid test device has secured both professional and self-test approvals in Europe as an HIV screening rapid test.
This foundation means that under the expanded deal, Atomo will obtain exclusive rights to market and distribute a COVID-19 antibody test in Australia, New Zealand and several South-East Asian countries under the AtomoRapid brand.
So far, neither company has specified a period of exclusivity with both parties now set for negotiations to conclude a definitive long-term supply agreement. According to the supplementary deal, the pricing arrangements with NG Biotech are limited to a price payable per unit only and do not include any licence fees or royalties.
Importantly for Atomo, obtaining exclusive rights in Australia, New Zealand and SE Asia means it can reposition its market offering as a listed manufacturer of COVID-19 tests and could thereby become the only manufacturer of a TGA-approved Class 4 self-test in Australia, to be listed as the “Atomo HIV self-test” on the Australian Register of Therapeutic Goods (ARTG).
Having already secured a CE Mark for European distribution, Atomo is confident it can approach regulators in SE Asia and has already identified Hong Kong, Taiwan and the Philippines as its prime target markets.
“These results and the proven ease-of-use of Atomo devices in the field, in our opinion, make the test well suited to community deployment and population screening programs. With our exclusive agreement in place and the AtomoRapid COVID-19 (IgG/IgM) product having a CE Mark, we are now in a position to progress regulatory applications within our exclusive jurisdictions in the coming months,” said Atomo’s co-founder and managing director John Kelly.
In Australia, Atomo is also seeking to validate its product and to prove its effectiveness, despite a rapidly changing environment due to COVID-19 and continued discovery of new information related to the disease.
In coordination with Australia’s Department of Health, Atomo intends on engaging the Peter Doherty Institute for Infection and Immunity to assist with the post-market validation of new COVID-19 rapid tests.
This process was set up to better understand the workings of COVID-19 with Atomo committed to submitting its Galileo test for assessment by the Doherty Institute upon listing on the ARTG.
Back in April this year, Atomo said it received a second purchase order from NG Biotech, to supply an additional 550,000 integrated blood test devices. NG Biotech’s initial purchase order for almost 400,000 devices occurred in March 2020 and took the total number of devices available to NG to 947,200.
As part of a supplementary IPO prospectus, Atomo declared its plan to sell a total of 2.5 million devices in 2020 with both companies vowing to enter into a further binding purchase agreement for the ongoing supply of Atomo products beyond 2020.
According to the deal terms, the French company is committed to order “at least 70%” of the monthly quantities agreed with Atomo, but if NG Biotech fails to meet its minimum order commitment, Atomo has the option of voiding the deal.
“We are moving very quickly to respond to the interest in Atomo’s rapid test devices for delivery of reliable, user-friendly rapid blood-based testing as part of the global response to the COVID-19 pandemic,” said Mr Kelly.
There are also plans to sell its testing kits outside the EU and to obtain large-scale customers that can boost commerciality and scalability. One avenue is to focus on healthcare providers as well as authorities tasked with responding to the COVID-19 pandemic.
“Focus is currently on fulfilling the first two orders placed by NG Biotech, who are already supplying tests to the French Ministry of Defense. In parallel, we remain in discussions with two US-based COVID-19 test manufacturers for supply of OEM test devices,” said Mr Kelly.
The company said it intends to expedite the expansion of its production capacity to meet the anticipated ongoing demand for COVID-19 test devices and continue to support its existing HIV distributors and other OEM customers.
“Atomo is delighted to have secured exclusive rights to market, as the listed manufacturer, the COVID-19 test which NG Biotech has successfully launched in Europe with initial sales to the French Ministry of the Armies (Defence) and a number of public hospitals, following strong results in independent French clinical studies,” said Mr Kelly.