Why the Rhinomed (ASX:RNO) share price is rocketing 90% higher today

This medical device company is benefiting from COVID testing…

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Sonic Healthcare share price represented by man receiveing nasal swab from medical professional

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The Rhinomed Ltd (ASX: RNO) share price is rocketing higher on Wednesday.

In morning trade, the medical device company’s shares are up a massive 90% to a 52-week high of 38 cents.

This means the Rhinomed share price is now up approximately 125% since the start of the year.

Why is the Rhinomed share price rocketing higher?

The catalyst for the rise in the Rhinomed share price on Wednesday has been the announcement of a major purchase order from the government.

According to the release, the company has received purchase orders and begun supplying NSW Health Pathology with an initial one million Rhinoswabs. This is part of NSW Health Pathology’s program to support testing capability.

The company has commenced deliveries, with these initial orders being fulfilled over the coming weeks. It notes that the revenue associated with the initial order represents between approximately 25% and 35% of its unaudited FY 2021 revenues of $3.9 million.

What is Rhinoswab?

The company highlights that its Rhinoswab nasal swab technology improves the sample collection process.

Rhinoswab is reportedly substantially more comfortable and easier to use than the standard nasal swab, captures a larger sample, can accelerate the sample collection process, and significantly reduce queues and waiting times.

The technology works with existing PCR pathology workflows and equipment and has equivalent cost and quality to the US and European standard of care nasopharyngeal swabs.

In order to respond to increasing demand both at home and abroad, Rhinomed is now scaling up its manufacturing facilities.

Rhinomed’s CEO, Michael Johnson, said: “We are thrilled to receive this support for this Australian innovation. The Rhinoswab can make a meaningful impact on the SARS-CoV-2 testing process and enable more people to be tested quickly and easily. With approximately 2 billion SARS-CoV-2 tests having been carried out globally over the last 18 months (close to 26 million in Australia alone), there is a major opportunity for Rhinoswab to radically improve the testing process, clinical outcomes and user experience.”

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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