Guess which ASX healthcare stock just exploded 63% on Federal budget funding news!

Investors are bidding up the ASX healthcare stock amid extra funding in the Federal budget.

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An under-the-radar ASX healthcare stock is rocketing today.

To be sure, Thursday is proving to be a good day for most ASX shares.

The All Ordinaries Index (ASX: XAO) is up 1.5% at the time of writing as easing inflation in the United States and rising unemployment in Australia increase the odds of central bank interest rate cuts (details here).

But this ASX healthcare stock is leaving those gains in the dust.

Shares in the company, which specialises in medical devices, closed up 3.9% yesterday at 2.7 cents. In earlier trade today, shares were swapping hands for 4.4 cents apiece, up an eye-watering 63.0%.

After some likely profit-taking, shares are currently trading for 3.2 cents apiece, up 18.5%.

Any guesses?

If you said Atomo Diagnostics Ltd (ASX: AT1), go to the head of the virtual class.

Here's why the Atomo Diagnostics share price is rocketing today.

ASX healthcare stock lifts off on Federal budget news

The Atomo Diagnostics share price is soaring after the company lauded the new Federal budget's commitment to fund the expansion of HIV self-testing.

That's important for shareholders, as the ASX health care stock supplies the only HIV self-test that's included on the Australian Register of Therapeutic Goods (ARTG).

Management noted the key role the company has played in implementing the pilot programs, which will now be scaled up nationally with government funding support.

Atomo shares are surging, and the company says it anticipates that "a significant portion of the funding committed to these expanded HIV self-test programs" will be used to buy its HIV tests.

The ASX healthcare stock highlighted that under the new Federal budget:

  • People with or at risk of HIV will receive unprecedented support ($43.9 million) through better prevention, testing, workforce training and information, with the government committed to eliminating HIV transmission by 2030.
  • More people in at-risk groups will get free HIV self-test kits through the expanded national HIV self-test mail-out program.
  • And people around Australia will get wider access to HIV testing by extending the South Australia-based HIV testing vending machine pilot to every state and territory.

What did management say?

Commenting on the new funding that's sending the ASX healthcare stock soaring today, Atomo CEO John Kelly said:

We are delighted to see the government recognise the critical need to ensure HIV self-test availability across the community and fund the rapid expansion of the national HIV self-test mail-out program and the HIV self-test vending machine pilots.

Both have proven extremely successful in increasing testing rates among groups not currently testing via healthcare facility-based services.

With today's intraday moves factored in, the ASX healthcare stock is up 60% year to date.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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