The companies have grabbed investor interest today, with each releasing promising news. And this is sending them racing ahead of the 0.2% gains posted by the All Ordinaries Index (ASX: XAO) in late morning trade on Thursday.

Here's what we know.

ASX biotech shares rocket on updates

Cancer trial progress

The first ASX biotech share leaping higher today is Race Oncology Ltd (ASX: RAC), which is primarily focused on cancer care.

The Race Oncology share price is up 10.2% at the time of writing, with shares trading for $1.42 apiece. This outperformance comes after the company announced that it had submitted the human ethics application package for its RC220 Phase 1 solid tumour trial.

The company will conduct the trial at Southside Cancer Care Centre in New South Wales. It will study the efficacy of the ASX biotech share's RC220 product in combination with doxorubicin in adult cancer patients.

Race Oncology expects the first patient recruitment to occur in Q1 2025.

The company noted:

Regulatory and institutional packages have been completed for submission to a second Australian site immediately following HREC approval of the trial, with both sites planned to be activated simultaneously.

Race Oncology plans up to 10 additional sites to follow.

"This is a critical milestone for the team; selection and evaluation of an appropriate site and the start of the ethical review for this study," Race chief medical officer Michelle Rashford said.

Breast cancer monitoring

Moving on to the second ASX biotech share lifting off today, Inoviq Ltd (ASX: IIQ), which develops diagnostics and therapeutics for cancer.

The Inoviq share price is up 6.0% at 53 cents a share after the company reported the successful completion of disease specificity testing for breast cancer.

According to the release, the company's neuCA15-3 blood test was analytically and clinically validated to detect breast cancer across all stages (81% sensitivity and 93% specificity), key breast cancer types and subtypes.

Management highlighted that the test was also effective for breast cancer monitoring.

"The next step towards commercialising the neuCA15-3 test is to transfer and optimise the test on a system compatible with high-throughput commercial diagnostic instruments," Inoviq CEO Leearne Hinch said.

Point-of-care test milestone

Which brings us to the third ASX biotech share rocketing higher today, Lumos Diagnostics Holdings Ltd (ASX: LDX).

Shares in the point-of-care diagnostic technologies company are currently trading for 3.9 cents apiece, up 25.8%.

Lumos roused investor enthusiasm after the company announced a new milestone in the commercial rollout of its FebriDx point-of-care test.

The company said it had received approval from the United States Centers for Medicare and Medicaid Services (CMS) Panel for FebriDx to be reimbursed at a rate of US$41.38 per test.

FebriDx is able to distinguish between bacterial and non-bacterial infections at the point of care.

Commenting on the progress sending the ASX biotech share soaring today, Lumos CEO Doug Ward said, "This reimbursement pathway is another important step towards removing barriers to access and potentially benefitting millions of Americans."

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For example, the two ASX healthcare shares listed below are up at least 16% in morning trade thanks to big news in the United States.

Here's what you need to know about them:

Cyclopharm Ltd (ASX: CYC)

The Cyclopharm share price is up 18% to $1.80. Investors have been buying the ASX healthcare share this morning after it announced an interim agreement to supply the Veterans Health Administration (VA) with the pharmaceutical and consumable components of Technegas.

Technegas is the company's core radiopharmaceutical product, used in functional lung ventilation imaging.

This could be a very big deal for Cyclopharm given that the VA is the largest integrated US Government health care system in the United States.

According to the release, the interim agreement immediately provides the 120 Veterans Affairs hospitals, which have nuclear medicine departments, access to an agreed contract for these products.

Cyclopharm's CEO, James McBrayer, commented:

Securing this Interim Agreement is critical for streamlining the United States Federal Government procurement process. This agreement bypasses the need for Cyclopharm to negotiate separate contracts with each of the 20 Regional Procurement Offices within the VA or potentially follow a reseller pathway that would delay the deployment of Technegas, distance us from our customers and impact margins beyond the legislated discounts required for federal contracts.

Lumos Diagnostics Holdings Ltd (ASX: LDX)

The Lumos Diagnostics share price is up 16% to 4.3 cents.

This has been driven by news that the point-of-care diagnostic technology provider has been awarded ~US$3 million from the Biomedical Advanced Research and Development Authority (BARDA). It is part of the U.S. Department of Health and Human Services' Administration for Strategic Preparedness and Response.

These funds are to support the planned Clinical Laboratory Improvement Amendments (CLIA)-waiver clinical study and regulatory submission for Lumos' FebriDx bacterial/non-bacterial test.

FebriDx can aid clinicians with appropriate antibiotic use decisions and will hopefully improve antibiotic stewardship.

The ASX healthcare share's CEO and managing director, Doug Ward, commented,

Since early clinical practice, doctors have relied primarily on clinical observation to determine whether patients require antibiotics for acute respiratory conditions. FebriDx is a powerful diagnostic which can provide a quick and clear clinical evaluation, and in doing so, can reduce over-prescription of antibiotics.

Special mention goes to fellow ASX healthcare share Mesoblast Ltd (ASX: MSB), which is rising over 9% today. However, with no news out of the company, it remains unclear why investors are scrambling to buy its shares today.

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Three ASX healthcare shares that have recorded particularly strong gains are listed below. Here's why they are getting investors excited:

Advanced Health Intelligence Ltd (ASX: AHI)

The Advanced Health Intelligence share price is up 20% to 24 cents. That's despite there being no news out of the health software company. However, it is worth noting that the company's shares on the NASDAQ rocketed higher overnight. Advanced Health Intelligence recently underwent a reverse split with its US-listed shares in order to remain compliant with listing rules after trading below $1 for 33 consecutive business days.

Atomo Diagnostics Ltd (ASX: AT1)

The Atomo Diagnostics share price is up 100% to 7.1 cents. Investors have been buying this integrated rapid diagnostic test (RDT) device provider's shares this week after a major shareholder increased its holding. GZ Family Holdings has almost doubled its holding since the middle of May to approximately 79.8 million shares. This gives it a 13.98% stake in the ASX healthcare share. Last month, the company entered into an exclusive supply agreement with UK-based company Newfoundland Diagnostics for HIV rapid testing in Europe.

Lumos Diagnostics Holdings Ltd (ASX: LDX)

The Lumos Diagnostics share price is up 71% to 12.5 cents. This latest gain means this ASX healthcare share is now up approximately 1,000% over the last two trading sessions. The catalyst for this has been the granting of US FDA clearance to market its FebriDx rapid, point-of-care test in the United States. FebriDx is to be marketed for use by healthcare professionals as an aid in the diagnosis of bacterial acute respiratory infection.

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Shares in the ASX healthcare stock closed on Friday trading for 1.1 cents. At the time of writing, shares are swapping hands for 12.5 cents.

Shares gained 564% in Monday trade. And they're up another 71% in morning trade today.

That sees the Lumos Diagnostics up a stellar 1,036% in less than two days of trading!

This comes after Lumos, which develops and sells point-of-care diagnostic (POC) tests, reported it had received clearance from the United States Food and Drug Administration (FDA) for one of its core products.

Here are the highlights.

What's happening with the FDA?

Investors are bidding up the Lumos Diagnostics share price after the company received FDA clearance to market its FebriDx rapid, point-of-care test in the US.

FebriDx can now be marketed in the world's top economy to assist healthcare professionals in diagnosing bacterial acute respiratory infections and differentiating this from non-bacterial etiology in urgent care and emergency situations.

FebriDx is already registered in the United Kingdom, Europe, Canada, the United Arab Emirates, Brazil, Turkey, Pakistan, Singapore, Malaysia and Australia.

Lumos Diagnostics noted FebriDx can help combat the overuse of antibiotics, which is contributing to resistant strains of bacteria. The company said most acute respiratory infections are viral in origin, yet antibiotics are commonly prescribed. Up to 40% of these prescriptions are considered unnecessary.

Commenting on the FDA approval sending the Lumos Diagnostics share price rocketing, CEO Doug Ward said, "We are delighted to finally secure clearance to market our FebriDx rapid, point-of-care test in the US as we continue to believe it has an important role to play in antibiotic stewardship."

Ward added:

With this clearance in hand, we anticipate securing our first commercial orders in the US before the end of calendar year 2023. In the meantime, we are continuing to work with distribution partners and potential licensees, as well as establish our own focused sales effort, as we prepare to launch FebriDx in the US.

How has the Lumos Diagnostics share price performed longer term?

While you won't hear any recent investors complaining following this week's surge, the Lumos Diagnostics share price remains down 17% over the past 12 months.

The ASX healthcare share has gained 160% in 2023.

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The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, SG Hiscock portfolio manager Rory Hunter explains why he's so pumped about one possible IPO later this year.

The ASX share for a comfortable night's sleep

The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?

RH: Okay, a slightly different one here, in the sense that it's not actually a listed position, but a position that will soon be listed — so I think it will be of quite a lot of interest to readers — is a company called Planet Innovation. 

[Editor's note: Planet Innovation is a public company but is unlisted. This means investors have access to buy shares for it off-market from time to time.]

They're actually the parent company of Lumos Diagnostics Holdings Ltd (ASX: LDX). They've recently been in the press a bit, because Anthony Albanese gave a press conference from their headquarters in Box Hill, talking about the fact that there was a need for more local manufacturing of, not for rapid diagnostics, but medical devices. Pretty much giving the public commitment to fund businesses in this space. 

This is, first of all, fantastic for a fund like ours, because you're going to see a lot of government funding and broader funding in the sector. But also great for Planet Innovation. 

I actually just think that the Planet Innovation business is just a strategically brilliantly set up business. They've got two sides to the business. One side is a services business and the other side is a ventures business — [which covers] the cost of all the specialising in medical devices. 

The way the business model works, the way it's worked historically, is that the ventures businesses as they mature, Planet Innovation actually harvests their investments in the ventures businesses in order to fund the more capital-intensive services business.

In terms of the services business, PI are now generating 70% of their revenue from the US. And they've built quite an incredible track record there with some of the world's largest medical device companies in the US.

The interesting bit is there's a bit of competition in this space. And this space in the US is worth about $25 billion at the moment. That market is expected to double by 2025, which I think is quite an extraordinary stat. It tells you a lot about the tailwinds in this space. 

PI actually have a competitive advantage over their competition, in the sense they do a lot of the design before they actually win manufacturing contracts. What that means is that they're actually at the front of the queue when it comes to the manufacturing contracts now. I think what will be the case for the business when it comes to [the share] market, is that sell-side analysts will always undervalue the service business, because they'll look at it and they'll say, "Manufacturing business, short-term contracts. Not a very sticky customer base."

But actually, I think potentially they'll undervalue it, just simply because the nature of the contracts is with the large medical device companies. They'll win contracts over and over again, because of that strong execution.

It's a fantastic management team. It's the old management team from Vision Biosystems, that actually spun out when Vision Biosystems was acquired by Danaher back in, I think it was, 2008 or 2009. So that's Sam Lanyon and Stuart Elliott. They had incredible success with Vision Biosystems and they're replicating that now with Planet Innovation. 

We expect Planet Innovation to come to market in the shape of an IPO at some point this year.

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The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, SG Hiscock portfolio manager Rory Hunter reveals the 2 medical tech ASX shares that will reward those with enough patience.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Rory Hunter: As the small companies guy, I'd probably mention two smaller caps in this space at the moment, with the caveat of course that within a rising rate environment, you're going to get to the valuation-multiple compression. So one would have to be quite patient with the stock picks. 

The first one I'd mention would be a company called Beamtree Holdings Ltd (ASX: BMT).

So Beamtree used to be known as PKS Holding, which, I think, was Pacific Knowledge Systems. Basically, it's a technology that works — they capture, manage, and analyse and review AI [artificial intelligence] analysis to provide to decision support systems — to doctors in hospital settings. 

Operating in the same space — data analytics or health IT — as the likes of Alcidion Group Ltd (ASX: ALC), Mach7 Technologies Ltd (ASX: M7T), and others. 

The first thing I'd say is, Beamtree is a fantastic growth profile. We see the prospect of them getting to about $50 million of ARR [annual recurring revenue] over the next 3 to 5 years from a base of around $10 million they are now. They operate in over 20 countries, 4 continents. 

From a valuation perspective, they're trading on about 5 times ARR currently. 

If you look at the wider sector, you'll probably get valuation multiples of, from about 9 to 15 times sales. So with the growth profile, we're protective of the functionality that they have. Customer satisfaction, they have 99% client retention. We think that they're fantastically placed to continue to grow really strongly.

Within the healthcare industry, something that's key to remember, is that when customers come to making a decision on buying a product, technology or anything, a lot of the time it's about the people involved. They need to be able to trust the people that they're buying from. 

Tim Kelsey, who's the CEO of Beamtree, he's got a fantastic reputation in the industry. He was previously the national director for patients and information in the NHS in the UK. He's incredibly well connected in this space and has a very reputable track record. 

So bringing all of that together in a really good place.

MF: And your second pick?

RH: I'd say Lumos Diagnostics Holdings Ltd (ASX: LDX). You've probably seen there's been a bit about Lumos in the news over the past few days. 

I think a lot of the institutional and retail holders that took positions in Lumos with the IPO went looking for a bit of a stag [short-term speculation]. And when they didn't get that, they sold out. They're not actually long-term holders. That's why you've seen a bit of a weakness in the share price since the IPO. I think it's a function of the construction of the register as opposed to the health of the company itself.

One thing that has been disappointing is the fact that the approval of their FebriDx product or device by the FDA has been somewhat delayed. We fully expect that approval to come through. We think that will be one huge catalyst. 

Also just looking at the wider thematic, what you've seen as a result of the pandemic is that it's ultimately been a global lesson for consumers in how to undertake home-based rapid diagnostics, in terms of prevention testing. The reality is, that doesn't stop when the COVID pandemic becomes endemic. Once we get through the other side of the pandemic, there are so many applications for rapid testing. 

Lumos are ahead of the curve, in the sense that they're developing a test, CoviDx, and that will basically be an all-in-one COVID test with flu test as well. They've recently announced that they're going to receive government funding for a manufacturing facility in Victoria. We don't know what the quantum of the funding is as yet. But it will give them the capacity to develop or manufacture 50 million tests per annum. 

We fully expect that rapid diagnostics to be undertaken from the home, and will continue to accelerate on the back of the pandemic. We think Lumos is very well placed for that. We have a lot of conviction around the management team in order to execute as well.

MF: Certainly a very topical thematic, isn't it?

RH: Very topical. I think what you're seeing is that people are hesitating to buy in because there's very much a feeling that we're over the other side in terms of the pandemic, and so they think that actually their earnings profile, or the demand for their products, isn't that durable. People are missing a trick there. 

MF: After the January sell-off, do you reckon there are plenty of bargains out there?

RH: Yeah. There definitely are. 

Whether the bargains are as good as they're going to get, is another question.

Without going too deep into the macro… if you see any durability or duration in this rate hike cycle amongst global central banks, then all medical technology or technology healthcare businesses are going to be under pressure for some time, just because by nature they are long duration, so they derive a significant portion of their intrinsic value from earnings found in the future.

So in an environment of increasing bond yields, you're going to get valuation multiple compression. So they're going to have to grow at exponential rates. The growth in those businesses is going to have to be absolutely extraordinary for them to push against, or sort of push against the hot flow of water, if you like. 

If you're looking back on the last 12 months, you'd perceive a lot of the opportunities right now as bargains, but the market could be on sale for a while longer, given what's playing out now.

I think there is the prospect of central banks actually having to put a stop to the tightening cycle earlier than people expect, and that's when there will come an opportunity. That's really why we've positioned the fund as we have — we've been very defensive. We had 35% of the total fund in large companies and we've handled about 20% cash. So less than 50% in smaller companies. That's basically to… make us as nimble as possible, to actually take advantage of the bargains that present themselves.

If you were to watch our monthly newsletters, what you'll see, as you expect the sell-off to continue the same pace, you'll see a lot of that weight in cash and larger holdings shift to smaller holdings, as they get cheaper and cheaper. 

The reality is that even if things play out as we expect them to do, timing is really challenging. So the way we do it is just incrementally shift the weight, just to make sure that we're constantly topping up at discounted pricing, basically.

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ASX-listed companies that manufacture COVID-19 tests include Atomo Diagnostics Ltd (ASX: AT1), Lumos Diagnostics Holdings Ltd (ASX: LDX) and AnteoTech Ltd (ASX: ADO.

Atomo's share price is currently climbing 1.19% today, while Lumos is in the green 2.49 and Anteotech is jumping 6.98%.

Let's take a look at the news that could be giving these shares a bump today.

Tax deductible COVID-19 tests

COVID-19 tests for people who need them for work will be tax deductible from this year, the Financial Review reported.

Sonic Healthcare Limited (ASX: SHL) and Healius Ltd (ASX: HLS) process COVID-19 tests in Australia. Sonic has conducted millions of PCR tests, while Healius is processing 40,000 COVID-19 tests every day.

Treasurer Frydenberg will discuss the tax deduction policy in a speech to the Australian Industry Group today. In a copy of the speech, reported by the SBS, he states:

Today, I'm announcing that we will ensure that COVID-19 testing expenses are tax deductible for testing taken to attend a place of work, giving businesses and individuals more clarity and assurance.

We will also ensure that fringe benefits tax will not be incurred by employers where COVID-19 tests are provided to employees for this purpose.

The Lumos share price surged 5% last week on news the Victorian Government intends to support local manufacturing of its RAT tests.

Atomo secured up to 20 million COVID-19 rapid antigen tests for Australia and New Zealand in 2022, my Foolish colleague Aaron reported in January.

Anteotech is still awaiting Therapeutic Goods Administration (TGA) approval for use of its COVID-19 rapid antigen test in Australia.

Ellume is another Australian company working on TGA approval to sell its RATs in Australia. However, it is not listed on the ASX.

Share price recap

Some COVID-19 test shares have benefitted from the pandemic, making major gains in the past 52 weeks.

In the past year, Anteotech has rocketed 27%, while Sonic has surged 9% and Healius has gained 8%.

However, that's not true across the board. The Atomo share price has slumped 27% while the Lumos share price is down 17%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned more than 3.4% in the past year.

The post Why are ASX COVID test shares climbing today? appeared first on The Motley Fool Australia.

• The Lumos Diagnostics share price is up 8% today, and 22% in the last 3 days
• RAT supply shortages soon coming to an end
• Victorian government's investment in Lumos Diagnostics has excited investors

The Lumos Diagnostics Holdings Ltd (ASX: LDX) share price is again on the move today. This comes after news broke that rapid antigen test (RAT) shortages have started to ease over the past few days.

During afternoon trade, the medical diagnostics company's shares are up 7.92% to $1.09 apiece, having earlier been as high as $1.26. This means that since the end of January — the close of trade on Monday — Lumos Diagnostics shares are up by more than 22%.

RAT supply concerns almost a thing in the past

Investors are pushing up the Lumos Diagnostics share price following the Federal Health Minister's comments today regarding RATs.

According to an article published by news.com.au, Australia's supply shortage of RATs could soon be at an end.

Health Minister Greg Hunt said he received a positive message from Chemist Warehouse boss Mario Verrocchi on Wednesday morning.

"The message from the CEO … was that they have very significant supplies," Hunt said.

On January 24, the government launched a scheme to provide free RATs for pensioners and concession cardholders.

Around 3.1 million RATs have been handed out under the scheme, which is available to roughly 6 million Australians.

Chemist Warehouse, Australia's largest pharmacy chain, revealed it has handed out two-thirds of free RATs to eligible users. This equates to about 2 million free RATs.

The news follows Lumos Diagnostics' release yesterday in which it advised the Victorian government intends to support a diagnostics manufacturing facility and innovation hub.

The Andrews government plans to invest $17.2 million in Lumos Diagnostics to establish capability for manufacturing RATs in Victoria.

However, this is subject to the company meeting a number of requirements such as securing approval from the Australian Therapeutic Goods Administration (TGA) for its RATs.

Lumos Diagnostics believes if it is granted these rights, production can begin as early as the second quarter of 2022.

Once the facility is set up, up to 1 million RATs will be initially produced each year. This is expected to increase to up to 50 million RATs a year through the introduction of greater automation and expanding production lines.

Furthermore, the RATs can also be modified to be used for influenza, infectious diseases, reproductive health, and chronic disease management.

About the Lumos Diagnostics share price

Since being listed in July last year, the Lumos Diagnostics share price is down around 12%. However, with this week's gains, it is up around 13% year to date.

Lumos Diagnostics has a market capitalisation of about $152 million.

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• 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.

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• The AnteoTech share price soared again today, taking its gains over the past week to 42%
• Demand for rapid antigen tests is increasing
• The company's CEO is hitting media headlines this week

The AnteoTech Ltd (ASX: ADO) share price has been skyrocketing amid momentum for COVID-19 rapid antigen tests.

Shares in the company soared 7.25% on Thursday to close at 37 cents apiece. That's a 42% gain on last Thursday's closing price.

Let's take a look at what may be impacting AnteoTech shares.

What is happening at AnteoTech?

The AnteoTech share price is surging amid the rising demand for rapid antigen tests in Australia. In fact, the company has been hitting media headlines in recent days as it seeks approval for local production.

CEO Derek Thomson told the Courier Mail he has been seeking permission to manufacture the tests for nearly two years. He said:

We could supply millions now, it's a good volume and it would certainly make a dent in the Queensland need at the moment.

The company has been producing rapid antigen tests in the European market including Spain while it waits for approval from Australia's Therapeutic Goods Administration.

My Foolish colleague James noted on Friday the company plans to ramp up local production in the near future, and sales in 2022 could rocket due to RAT shortages. The AnteoTech share price jumped on the news.

Speaking on the pending TGA approval, Thomson told the Courier Mail:

We're supplying them some more information, we've continued to do that and we believe that we're in the final stages of our of our processing.

We would have liked it to go quicker but we understand that they have a responsibility and we're working with them as best we possibly can.

Thomson also appeared on the Today Show on Thursday morning, where he said he believes the company will get through the TGA approval process "soon".

Rapid antigen tests have been dominating media headlines in recent weeks, with other Australian companies also awaiting approval on the tests.

Among these are Lumos Diagnostics Holdings Ltd (ASX: LDX) and unlisted Brisbane-based diagnostics developer Ellume.

AnteoTech share price snapshot

The AnteoTech share price has returned 221% in the past year. This year to date, it has gained around 21%, while it has soared almost 95% in the past month.

Meanwhile, the S&P/ASX 200 index (ASX: XJO)'s has returned 8.45% in the past year.

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• The Lumos Diagnostics share price is rising today
• COVID-19 rapid antigen tests are in focus this week
• The company's CoviDX RAT test is waiting on TGA approval

The Lumos Diagnostics Holdings Ltd (ASX: LDX) share price is rising today as COVID-19 rapid antigen tests (RATS) hit the headlines.

At the time of writing, the company's share price is trading hands at 1.01, up 1.5%.

Let's take a look at what might be impacting the company's share price.

Awaiting TGA approval

The Lumos Diagnostics share price has been skyrocketing in recent weeks as demand for COVID-19 RAT tests increases globally.

Since Christmas Eve, the company's shares have gained 44%, rising from 70 cents to the current share price. Lumos Diagnostics achieved record revenue of $22.7 million in the 2021 financial year, up 188% from FY2020.

The company is one of a few in Australia — including Brisbane-based AnteoTech (ASX: ADO) — waiting on TGA approval for its diagnostic test despite lodging the application in September, ABC News reported.

Executive chairman Sam Lanyon told the publication.

We're working with the TGA on adding some additional clinical data to the application".

The company currently has manufacturing facilities for its rapid antigen tests in Florida and California in the United States, but not Australia.

In an investor presentation provided to the market in August, the company said it is hoping to launch its CoviDx rapid COVID-19 antigen test solution in the US, Canada and Australia in FY22 pending regulatory approvals.

This CoviDX RAT can return a result within 15 minutes of a viral swab.

The company approached Federal and State governments about local manufacture of the tests from mid-2020, but got nowhere with these discussions due to the preference for PCR tests, the ABC reported. Mr Laynson said:

For that reason, we set up our manufacturing capability out of Florida and California, which is there today, providing our range of tests into the US, European and Canadian markets at this point in time.

Lumos also has another flagship product, FebriDX, which can tell the difference between bacterial and viral infections. This product was launched in more than 100 pharmacies in the UK this week. FebriDX is also approved in Europe, Canada and Australia.

Share price snapshot

The Lumos Diagnostics share price has shed 19% in the past 52 weeks but is up 29% in the past month.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 11% to investors in the past year.

The company commands a market capitalisation of roughly $152 million based on the current share price.

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Lumos shares are on the move after the company announced positive readouts from a study concerning its FebriDx diagnostic test.

Here's what we know.

What did Lumos Diagnostics announce today?

The Australian producer of point-of-care diagnostic technologies revealed that its FebriDx diagnostic test was advocated in a prestigious health journal.

The FebriDx is a revolutionary blood test that helps distinguish between viral and bacterial sources of infection. This ultimately helps improve decision making when prescribing antibiotics.

The Journal of Health Economics and Outcomes Research (JHEOR) published a study that concluded using FebriDx "to guide antibiotic treatment for patients presenting with acute respiratory infections (ARIs)" could potentially lead to an annual saving of up to $2.5 billion for the US healthcare system.

Considering the US spent more than US$11,500 per person on healthcare in 2019, according to the US Centre for Medicare and Medicaid Services (CMS), this comes in at a saving of $7.60 per person, or 0.07%.

The authors of the article, Avalon Health Economics, compared 2 scenarios that looked at antibiotic prescription and adverse reactions.

One scenario involved the inclusion of FebriDx compared to a "control" scenario without FebriDx's diagnostic tool.

This is what led researchers to believe an annual $2.5 billion in costs savings could be achieved.

Curiously, estimates suggest "around half of the antibiotics prescribed for ARI's in outpatient settings are medically unnecessary", according to the company's announcement.

Plus, costs associated with these reactions are estimated to be between US$1,156/visit and US$14,678/event for ED visits and hospitalisations respectively.

Lumos intends to make a dent in these numbers with its FebriDx test and, now with additional literature supporting its case, it is one step closer to making it happen.

Lumos Diagnostics share price snapshot

The Lumos Diagnostics share price is swimming in a sea of red and has been since listing back in July. It's given shareholders a loss of 24% since this time, extending its slide in the past week 1.5%

These results have lagged the benchmark S&P/ASX 200 Index (ASX: XJO) over this time.

The post Lumos Diagnostics (ASX:LDX) share price up 9% on evaluation update appeared first on The Motley Fool Australia.

Lumos hits the decks after successfully raising $63 million through its initial public offering (IPO).

Let's look at what exactly the company does.

Lumos Diagnostics hits the ASX after IPO

Bringing testing to the bedside

Lumos Diagnostics operates in the healthcare technology space, specifically, developing, manufacturing, and selling point-of-care (POC) diagnostic solutions.

"What are POC diagnostic solutions?" you might ask. These are healthcare tests not carried out in a laboratory, such as those conducted bedside or during a visit to the GP.

In the case of Lumos Diagnostics, the primary focus is on testing for infectious diseases. This includes testing for bacterial versus viral infections, influenza, HIV, hepatitis, tuberculosis, sexually transmitted diseases, healthcare-associated infections, tropical diseases and, more recently, COVID-19.

At the moment, the company is concentrating on the United States and European markets. These locations account for around 64% of the global market for POC diagnostic testing.

Additionally, the company derives revenue through two distinct divisions: 'products' and 'commercial services'. The first is self-explanatory while the other involves developing and manufacturing POC tests on behalf of clients for a fee.

Lumos Diagnostics' current products comprise of two POC diagnostic tests. The first, FebriDx, is a test that rapidly identifies microbial infections in patients with acute respiratory infection symptoms.

CoviDx is the company's other POC test. It detects antigens present on the COVID-19 virus. This POC test has been granted a CE Mark for sale in Europe, with the company also seeking regulatory clearances in the US and Canada. Given the proliferation of COVID-19 around the world, now probably seemed like a good time for Lumos Diagnostics to launch its IPO.

Backers and forecasts

According to the company's disclosure, the IPO received backing from top-tier institutional funds, alongside existing investors including the Australian Unity Future of Healthcare Fund, Perennial, Washington H. Soul Pattinson and Co Ltd (ASX: SOL) and Ellerston.

Lumos CEO Rob Sambursky said:

Receiving support from so many institutional investors reflects the underlying strength of Lumos' business and technology platforms.

The funds raised via the IPO will facilitate the continued expansion and commercialisation of our suite of rapid diagnostic products that have the potential to transform point of care diagnostics for the benefit of clinicians, patients and the health system as a whole.

Of the $63 million raised, $38 million went to Lumos and the remaining $25 million went to selling shareholders.

For the half-year ending December 2020, Lumos Diagnostics delivered $11.56 million in revenue. This represents an increase of 239% from its previous year. Pleasingly for shareholders, losses narrowed from $6.28 million to $5.63 million.

Finally, Lumos' pro forma revenue in FY21 is forecasted to be $23.765 million from its two operating divisions. On this figure, the company's market capitalisation of $202.8 million would represent a price-to-sales ratio of 8.5 times.

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