ASX micro-cap stock rockets 50% on ovarian cancer blood test news

Something is getting investors very excited today. What's happening?

A woman jumps for joy with a rocket drawn on the wall behind her.

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Cleo Diagnostics Ltd (ASX: COV) shares are catching the eye of investors on Wednesday.

The Australian share market may be a sea of red following a hotter-than-expected inflation reading, but that has not stopped this ASX micro-cap stock from rocketing.

At the time of writing, the ovarian cancer diagnostics company's shares are up an impressive 50% to 25.5 cents.

Why is this ASX micro-cap stock rocketing?

Investors have been fighting to get hold of Cleo Diagnostics' shares today after it announced the publication of a milestone article on its blood test for the accurate and early detection of ovarian cancer.

According to the release, the article was published in the peer-reviewed medical journal, Cancers.

The benchmarking study compared the ASX micro-cap stock's ovarian cancer blood test against the current standard clinical workflows that use CA125 and ultrasound to predict malignancy.

The great news for the company was that outcomes of the study clearly demonstrate that its ovarian cancer blood test is far superior to all routine clinical tools used by doctors to predict the diagnosis of an adnexal mass prior to surgery.

Importantly, Cleo Diagnostics' test correctly detected 90% of early-stage cancers compared to only 50% using current standard of care workflows of CA125 and ultrasound.

Management believes that this clinical evidence supports its commercial pathway. It notes that it is now focusing on a number of initiatives in parallel that will deliver appropriate routes to adoption of its tests following regulatory approval and market launch.

If everything goes to plan, this ovarian cancer blood test could be a real cash cow for the ASX micro-cap stock. It highlights that despite its poor performance, CA125 is exclusively recommended in medical guidelines, and represents a $1 billion+ market with an estimated compound annual growth rate of ~4%.

Commenting on the study, Cleo Diagnostics Chief Executive, Richard Allman, said:

Our peer-reviewed publication strategy is delivering gold-standard clinical evidence which is vitally important as we begin to engage with potential early adopters of our technology. Having demonstrated now that the CLEO ovarian cancer blood test is far superior to CA125 and ultrasound in our initial pre-surgical triage market, we open up new dialogue with physicians to consider the potential material benefits that CLEO brings for their patients. More broadly, these encouraging results on early-stage cancer detection provide impetus for us to progress the development of CLEO's screening test for ovarian cancer.

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 Scott Phillips.

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