Company Interview / Lumos lighting the way for a new era in rapid diagnostics

Key points:

Lumos’ FebriDx aims to distinguish bacterial vs. viral infections.Expected market expansion and clinical trials on the horizon.Partnership with Hologic to develop groundbreaking health tests.

Lumos Diagnostics (ASX: LDX) secures a contract with US-based Medi Group to offer its rapid diagnostic test, FebriDx, to members. Doug Ward reveals the test promises to revolutionise respiratory illness diagnosis by distinguishing between bacterial and viral infections using whole blood.

Doug highlights that Lumos’ clinical trial will be initiated in October, aiming for a potential label extension to dramatically scale from 18,000 to 270,000 medical locations, expanding market opportunity from $100 million to $2 billion.

Doug also notes Lumos is partnering with Hologic to develop a new pre-term birth assay. With ongoing capital raises and strong institutional partnerships, Lumos eyes significant growth and market validation.

Full unedited transcript below:

0:00

Keeping up now with small caps. Lumos diagnostics has won a contract with US based medi group to offer its rapid diagnostic test February to all medi group members for the details. Lumos CEO Doug Ward. Joining me Doug, what does all this entail? Yeah. Hi there. Terrific to be with you today. So yeah, we're we've launched recently our favourite product for sales. Started taking orders and distributing that in the US in January of this year. Uh, we've signed a number of national distributors. And now that next step in the strategy is to sign up the group purchasing organisations here in the US or they're in the US, I should say, um, and uh, many group is one of the largest in the nation have over 30,000 members. So we're very, very excited to have that kind of, you know, opportunity to try to penetrate the market through medi group. And what's the next step after this exciting development? Yeah, probably the really significant part is right now we

0:59

have access to about 18,000 locations within the US with our label for our product. We will be initiating a clinical trial in the US here in October, and we expect that that trial will end around February of the new year. And then we will have a label extension that will give us a 15 times greater opportunity to to go to about 270,000 medical locations in the US with the product. So, you know, we'll go from about $100 million market to the opportunity to almost 2 billion. Let's take a step back and talk about is it February? Is that how you say it from February? Dex Faber okay. I always get confused when the Dow missing. So it is a fingerstick blood sample testing respiratory illness. So just talk us through what it does because it sounds quite revolutionary. It is

1:59

state of the art, the only one like it in the world. And think of it about just the practical nature. Someone has a respiratory ailment, they go to their GP and in many cases today, um, the GP uses clinical symptoms to decide do you have a bacterial infection or do you have a viral infection and other than flu in Covid specific tests that you can use lateral flow technology and do it right, they're out of a out of a swab. Um, our test uses whole blood, and it's the only one that says no, you actually have a bacterial, uh, infection, not a viral. You should get an antibiotic. The vast majority of people have viral infections, but they get the antibiotic and they shouldn't, because then that creates resistance for the for the, the the antibiotics that are given to people. And then we, we actually end up with

2:59

very few antibiotics that are working against bacteria. Yeah, there's a lot of concern about antibiotic resistance and what that's going to mean for the future of health care moving forward. Is this something that can be done though at home? Yeah. Not at this time. So at this time, our label, both here in Australia and and in the US, it needs to be done by healthcare professionals. Do you see a point where it could be done at home? In the same way we can now do these Covid tests at home? Yeah, I would say right now our short term strategy is to keep it focused with the health care authority. All right. Fair enough. Let's talk a little bit more about what you're doing at Lumos in terms of development and manufacturing, as well of some exciting products. Yeah. So we currently have our two products on market fabrics and vertex. Vertex is a flu Covid test again to be done with in only in the US healthcare professionals only. And

3:55

that's our product portfolio. And then from a services where we develop tests for other manufacturers and diagnostic companies. We're very fortunate to have a wonderful relationship with Hologic, the number one women's health care company in the world, and we're developing their next generation pre-term birth assay. So you're pregnant. And unfortunately, if the, the, the the amniotic sac, you know, moves away from the uterine wall, it releases some of the markers that are that hold that glue and we can detect that or Hologic can detect that, and it'll tell you whether or not you have preterm birth, which is critical to know so that we can deal with the fetus and so forth. So we're making that new test for them, both the instrument and the reagents. They are the only providers of the f n test in the world. So it's 100%

4:55

share for that test. And we're very excited to to bring that next generation to market. And how I guess, are you funding all this? Do you need to tap the market for cash or how are you going in terms of that forecast. Yeah, thanks. Great question. So we go about it two ways right. Certainly we have partners who, you know, fund us from co-development activities like Hologic is doing. So that's the one way that we have the cash to do what we do. The other is certainly using the equity markets and so forth, in which right now, as we speak, we're in the middle of a capital raise. The we've completed the institutional investor component to that, and we're now in the middle of the retail. And that will wrap up here on Wednesday of next week, your share price. So we just flashed it up on screen before in Australia hasn't done so well. Do you think that that is unfair given some of the exciting developments that you have. So listen, it's the market I

5:55

can't say whether it's unfair. It's not. I do believe, though. The good thing is we've had, I'd say, one and a half years of only good news that we presented to the market. We've done everything that we have said that we would do. So I do believe we're probably at a good stage where people are understanding that, okay, before it was about stabilizing the company, which I think we did a great job in the past fiscal year. Now, this year is now about new growth opportunities and hopefully we'll see some nice valuation growth as we grow our business. And with the growing of that business, I mean, there's a lot of merger and acquisition happening in the healthcare space. Would you be open to partnering with others? Oh, absolutely. I think, you know, that's the way healthcare works now. Innovation is done via the small, fast, nimble companies. But execution and commercialization typically is well accomplished by the large, you know, Multinational diagnostic

6:54

companies, and those two need to work well together. How are you viewing some of the really big players in this space? When we look at the likes of Pfizer and Moderna, who really shook things up with the Covid vaccinations, you've now got the likes of Eli Lilly with their weight loss drugs as well. There's a lot of exciting things happening in biotech. Yeah it is. It's a wonderful space to be in. Um, you know, and I would say what's really exciting is when you find opportunities where there's truly a clinical unmet need, whether it was the Covid pandemic and vaccine business or the the, you know, let's call it the diabetes and or weight loss component to the the drugs. They're here we're trying to to, for the first time ever, say do you have bacterial or a non bacterial infection within ten minutes in front of a doctor who can immediately treat you for the first time, knowing if you have the infection or not, that just makes this fun. And I think, you

7:54

know, wherever you see companies that have, you know, address an unmet medical need like that, you see a nice growth and nice response by the market to that. So how optimistic are you then, especially given what we've just spoken about with your products and the ones that we've talked about from other companies of the transformation of the healthcare industry in the next 5 to 10 years.

8:16

Um, so transformation is a is an interesting word, right? I think it's such a highly regulated environment. It's probably difficult to see where, you know, it's fundamentally transform. But I see I think what you do see is that more and more emphasis is being placed on these medical unmet needs where they have significant consequential consequences to to both patient and to the cost of health care. I think you'll see more and more activity going toward that type of approach.