Atomo Diagnostics investors are excited about their fair share from Lumos Diagnostics’ A$487m distribution deal

Wednesday 16 July 2025 was a great day for Atomo Diagnostics (ASX:AT1) investors as shares climbed up to 56% higher and closed 25% above the previous day’s closing price. The catalyst was an A$487m deal signed by Lumos Diagnostics, one of Atomo’s key business partners and investors believe the company will carve out some of this for itself. How so?

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The link between Atomo and Lumos

Atomo makes rapid diagnostic test kits for various diseases and its Pascal platform forms the basis of Lumos’ FebriDx professional use antimicrobial resistance (AMR) test. FebriDx was FDA approved 2 years ago, but Atomo first partnered with Lumos in 2019 to develp the test.

FebriDx is the only rapid, all-in-one point-of-care test on the planet that can distinguish a clinically significant acute respiratory infection (ARI) and differentiate viral from bacterial infections. It was FDA approved in mid-2023, at which point there was also a spike in Atomo’s shares, leading to a ‘speeding ticket‘.

Yesterday saw even better news. Lumos announced a pivotal, exclusive US supply and distribution deal for FebriDx valued at up to US$317m/A$487m from PHASE Scientific International. Lumos shares surged more than Atomo Diagnostics – by 144%. CEO Doug Ward declared it was a pivotal moment in Lumos’ evolution, and it is hard to disagree.

Lumos will get a US$1m non-refundable exclusivity payment on signing, then US$7.5m in non-refundable prepaid purchase orders. The total value could be US$317m if all payment milestones aforementioned and minimum order quantities are met. This is one of the largest distribution deals of its type to be done by an ASX-listed point of care company.

Lumos also told investors it was conducting a CLIA waiver study to enable FebriDx to be used in a broader range of settings (i.e. outpatient clinics). 105 out of 120 patients are enrolled and the company expects to finish the study soon with a FDA CLIA waiver to be submitted a month after that. It is expecting a US$746,143 milestone payment when the last patient is enrolled.

CLIA is the Clinical Laboratory Improvement Amendments, which set standards for laboratory testing quality, safety and accuracy. Some products may be waived if they are simply to use and the risk of wrong results are low. This would be terrific for Lumos if it could get this.

Why Atomo Diagnostics investors are excited

But back to Atomo Diagnostics.

Back in 2023 and now, anything good for FebriDx is good for Atomo Diagnostics for two reasons. First, it will mean more business for Atomo because it is a supplier to Lumos. And second, FebriDx is Atomo’s US predicate potentially enabling a reduced pathway for Atomo’s future products into the US market. Atomo need may need to only demonstrate that the usability is ‘substantially equivalent’ to FebriDx. Now, it is no certainty that Atomo will pursue this path or that it will be successful here, but this is a possibility.

Touching again on the CLIA waiver, if Lumos gains this, it could be good for Atomo. Not just because it will inspire confidence Atomo can get it too, but it will open up a lot of business. It has been estimated that the number of testing labs that could use the test could be increased by up to 5 times.

Conclusion

While Lumos investors have reasons to crack the champagne corks right now, Atomo investors have reason to be confident they can pop the champagne down the track in the form of business from Lumos and a potentially easier pathway to market for its own products.

Atomo Diagnostics is a research client of Pitt Street Research and directors own shares in the stock. 

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