The Atomo Diagnostics Ltd (ASX: AT1) share price has charged 4% higher today on the back of a positive announcement. At the time of writing, the Atomo share price is trading at 38.5 cents, up 4.05%.
This is in comparison to the All Ordinaries Index (ASX: XAO) which is marginally in positive territory, up 0.2% to 6,149 points.
Let's see why the Atomo share price is surging today.
Expanded partnership
The Atomo share price is on the move since the company updated the market advising it had expanded a partnership with Access Bio Inc. The agreement will see the launch of Atomo's rapid COVID-19 antigen test in Australia, New Zealand and India.
The nasopharyngeal swab test is designed to screen for antigens produced in response to COVID-19 infections at the point of testing. This differs to the current nasal swab testing in Australia, which uses molecular PCR assays to test for coronavirus.
Atomo's rapid test provides results after 10 minutes, as opposed to the general test kit, which is sent to a central laboratory for processing. The company said that the early identification is a breakthrough is controlling outbreaks.
In addition, Atomo noted that its rapid antigen test has the potential to work alongside its COVID-19 rapid antibody test. The latter detects whether a patient has developed antibodies to the virus, most accurately after 15 days of exposure.
Atomo will purchase the finished product from Access at a fixed price per unit. Estimated revenue earnings were not provided as Atomo seeks regulatory approvals in Australia, New Zealand and India.
The rapid antigen test is already marked for professional use in Europe and has seen significant sales thus far. In the United States, the Food and Drug Administration (FDA) is currently pending an Emergency Use Authorisation (EUA) for the new test kit.
Management comments
Atomo Co-founder and Managing Director, John Kelly, was pleased with Atomo's new expanded partnership. He said:
Atomo is delighted to have secured rights to market a quality US manufactured rapid antigen test from a trusted partner. We believe that having the ability to screen for both acute infection and prior exposure at the same time, with results delivered after 10 minutes at the point of testing, could be game-changing in the way we diagnose COVID-19.
Furthermore, Mr Kelly validated the effectiveness of the company's antigen test kit. He added:
Antigen tests have been proven to provide good detection of COVID-19 infection in the early stage onset of symptoms. Combined with our TGA-approved rapid antibody test for COVID-19 that reliably detects exposure to the virus over a longer period, we believe that a combo rapid screen will offer excellent performance outside of laboratory settings where reliable testing is most needed.
About the Atomo share price
Since listing on the ASX in April, the Atomo share price is almost flat, down around 1%. In light of the company's new developments, I think that Atomo has a lot to offer in the current environment. Both tests could prove to be game-changing in identifying affected COVID-19 patients who can then isolate themselves from the public.
Should the company overcome its regulatory hurdles, I believe the Atomo share price could push significantly higher from today's valuation. With a market capitalisation of $213 million, I'm confident there is a lot of runway for this medical device company.
