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Why the Atomo (ASX:AT1) share price is flying 9% higher today

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Atomo Diagnostics Ltd (ASX: AT1) provided a market update today in relation to its COVID-19 rapid antigen test.

During early morning trade, shares in the medical device company were relatively flat. However, since the release of the news, the Atomo share price has flown 9.68% higher to 34 cents at the time of writing.

Let’s take a closer look at Atomo’s product and what was announced.

What is the COVID-19 rapid antigen test?

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 in 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 receives approval stamp

According to the release, Atomo advised that the Therapeutic Goods Administration (TGA) has approved its rapid SARS-CoV-2 antigen blood test. The milestone achievement will allow Atomo to commence supplying the test kit to medical professionals across Australia.

The new registration of the COVID-19 rapid antigen test will require Atomo to submit additional evidence in the following 12 months. TGA requires all approved distributors to provide evidence of ongoing safety and performance. The Peter Doherty Institute for Infection and Immunity (Doherty Institute) has been selected to assist in the post-market validation.

In addition, Atomo secured a partnership with Health Solutions Group Australia to provide rapid antigen and antibody test kits. The deal will see Atomo’s combined products used to detect COVID-19 at point of care.

What did management say?

Commenting on the test, Atomo co-founder and managing director Mr John Kelly stated:

Atomo can now offer, in a single 15-minute window, rapid testing for both COVID-19 antigen and antibody responses. This comprehensive rapid screen will help determine acute active infection and also indicate those patients who may have had prior exposure to the virus and built up an antibody response.

Up to 20% of infections are asymptomatic and this has led to many countries now establishing regular, proactive testing regimes. Antigen tests have been proven to provide good detection of COVID-19 infection in the early stages of exposure.

He added:

We are delighted to be partnering with Health Solutions for the provision of COVID-19 screening services to our clients. Having a large national service provider with experience in professional testing to help rollout this service is very important.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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