Atomo Diagnostics (ASX:AT1) share price rockets 59% on COVID-19 test update

This ASX share is starting the week with a bang…

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The Atomo Diagnostics Ltd (ASX: AT1) share price has been a very strong performer on Monday.

In early trade, the medical device company’s shares rocketed as much as 59% higher to 21.5 cents.

This certainly will be a welcome relief to shareholders given that the Atomo Diagnostics share price dropped to a 52-week low of 13 cents on Friday.

Why is the Atomo Diagnostics share price rocketing higher?

Investors have been bidding the Atomo Diagnostics share price higher today after it revealed that its partner, Access Bio, has received Emergency Use Authorisation (EUA) from the U.S. Food and Drug Administration (FDA) for point-of-care use of its CareStart EZ COVID-19 test.

CareStart EZ COVID-19 is a rapid antibody test made by combining an integrated device developed by Atomo and a rapid COVID-19 antibody test strip from Access Bio.

Atomo entered into an agreement last year to supply Access Bio with its unique, integrated rapid diagnostic test (RDT) devices for use in North America with Access Bio’s rapid test strip for detection of antibodies to COVID-19. This was subject to FDA clearance, which has now been received.

In addition to this, the two parties have previously signed an agreement that grants Atomo non-exclusive rights to market and distribute Access Bio’s COVID-19 rapid antigen test in Australia, New Zealand and India. This remains subject to obtaining the required regulatory approvals in each jurisdiction.

For now, the EUA allows sales of the CareStart EZ COVID-19 test for use in point-of-care settings. This means places such as doctors’ offices, hospitals and emergency rooms in the United States. However, Atomo and Access Bio are in discussions regarding their COVID-19 rapid test commercial arrangements and will keep the market informed as to any material developments.

Atomo Diagnostics’ Managing Director John Kelly said, “We are happy that our integrated test device has enabled Access Bio to secure EUA for point-of-care use for their COVID19 antibody test and for it to be used in a broad range of non-laboratory settings in the US.”

It is worth noting, however, that no details have been provided in respect to what impact this news will have on the company’s revenues.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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