Key Points
- Lumos Diagnostics shares rise 15% following strong support from Victorian government
- $17.2 million intended to be invested in developing local manufacturing capability of RATs
- Subject to approvals, the facility is expected to be up and running in the second-quarter of 2022
The Lumos Diagnostics Holdings Ltd (ASX: LDX) share price is roaring higher today on the back of a positive company update.
During afternoon trade, shares in the medical diagnostics company are up 14.97% to $1.075 apiece. In comparison, the All Ordinaries Index (ASX: XAO) is 1.24% higher to 7,403.7 points.
What did Lumos Diagnostics announce?
Investors are buying up Lumos Diagnostics shares in hope that the company's manufacturing capability will be significantly expanded.
In its release, Lumos Diagnostics advised that the Victorian government intends to support a diagnostics manufacturing facility and innovation hub. The $17.2 million package will see the company establish manufacturing capability of Rapid Antigen Tests (RAT) in Victoria.
Subject to meeting a number of requirements, the facility could be producing RATs as early as the second-quarter of 2022. However, hurdles such as securing approval from the Australian Therapeutic Goods Administration (TGA) need to be checked off first.
With COVID-19 cases soaring in the past few months, Australia has faced critical shortages of COVID-19 RAT tests. This highlighted the need to develop a local capability for manufacturing rapid diagnostics within the country.
If the TGA green lights Lumos Diagnostics' CoviDx RAT, the next step will be finalising a legal agreement with the Victorian government.
Once the production and assembly facility are set up, up to 1 million RATs will be produced initially each year. This is expected to increase up to 50 million RATs through the introduction of greater automation and expanding production lines.
Lumos Diagnostics noted that RATs can also be used for influenza, infectious diseases, reproductive health and chronic disease management.
What did management say?
Sam Lanyon, executive chair of Lumos Diagnostics, commented:
Lumos Diagnostics is proud to collaborate with the Victorian Government to manufacture and deliver critical, rapid diagnostic tests. Lumos will leverage its existing partnerships and global experience that has seen it create critical infrastructure and world-class technology in North America, to support the establishment of a Victorian manufacturing and innovation hub for rapid diagnostics.
We are thrilled that as an organisation that was founded in Victoria, we can support the creation of local jobs whilst future proofing Victoria's needs for rapid testing.
Lumos Diagnostics share price snapshot
Over the last 12 months, the Lumos Diagnostics share price has descended by around 20% in value. However, when looking at year to date, its shares are up almost 2%.
Lumos Diagnostics has a market capitalisation of roughly $152.05 million, with approximately 150.55 million shares on its books.
