From Covid to pregnancy, Atomo eyes bundle of joy from $2bn rapid test market

The ASX-listed group is expanding its rapid testing to a blood-based pregnancy product, making urinating on a stick a thing of the past.

Atomo, known for its rapid Covid-19 tests, is launching into the $2bn global pregnancy test market, making urinating on a stick a thing of the past for expectant parents.

The ASX-listed life sciences company has partnered with French laboratory equipment supplier, NG Biotech, to create a blood-based rapid pregnancy test, securing exclusive distribution agreements in Australia, New Zealand, Canada and the US.

Atomo shares jumped 3.6 per cent to 5.8c on Wednesday against a flat broader share market, giving the company a market value of $35.1m.

The test will detect levels of human chorionic gonadotropin (hCG) – a hormone that is produced by the placenta, spiking during pregnancy. Atomo says given it will be hCG based, the test will be more accurate than the over-the-counter urine-based diagnostics that are currently in the market.

“Detectable hCG levels typically build up quicker in blood than in urine, making the test potentially suited to early detection of pregnancy,” Atomo said in a statement to the ASX.

The device will combine Atomo’s integrated Pascal blood test device with NG Biotech’s hCG test assay and will cater for professional use and at-home self-testing.

The partnership with NG Biotech will last for at least five years, renewing for another five years automatically unless terminated by either company.

Atomo chief executive John Kelly said it was too early to quantify how much revenue the pregnancy test will generate.

But he said the agreement with NG Biotech will be “strategically material” as Atomo seeks to grow its global footprint, expand its rapid test portfolio beyond infectious diseases and leverage its opportunities in the US market.

The global pregnancy test market is estimated to surge from about $US1.36bn ($1.95bn) to $US1.74bn in the next five years, according to Market Data Forecast, spurred by developments in fertility treatments. North America is the world’s biggest pregnancy market, with a 36.4 per cent share.

Atomo’s new test will be based on hCG levels, allowing an earlier detection of pregnancy than current urine-based tests.

“We are delighted to have been able to secure a long-term strategic partnership with NG Biotech for blood-based pregnancy testing,” Mr Kelly said

“We have been investing in US market entry for the company and feel that these products represent a valuable commercial opportunity for us, with pregnancy testing being one of the largest established self-test categories, and with blood testing already utilised in the US in emergency settings to rule out pregnancy on admittance.

“In taking the lead in a number of key markets where we have commercial infrastructure, this agreement frees NG Biotech up to prioritise efforts in Europe and Brazil first and foremost and expand into other markets being targeted by them in the coming year”.

Mr Kelly Atomo and NG Biotech would finalise planning and associated costs related to securing US Food & Drug Administration clearance, including seeking over-the-counter home use approval, in the next three months.

He said the reliability of its Pascal cassette for blood testing increases the potential for Atomo to be successful in securing approvals.

Earlier in the pandemic, Atomo, at times, found itself wedged between Canberra and the state governments both saying the other is responsible for pushing rapid tests, leaving Australia with one of the lowest adoption rates in the developed world. But that changed at the start of last year during the omicron wave, when demand for RATs soared, triggering stock shortages, rationing and queues at pharmacies.

Last August, Atomo signed an agreement with Hangzhou AllTest Biotech Co to supply Covid-19 RATs in Australian and New Zealand under the Atomo brand.

Atomo’s revenue surged 84 per cent to $12.3m last financial year and cut its loss 5.2 per cent to $5.7m.