COVID-19 testing will last for ‘several years not several months’
Health & Biotech
Health & Biotech
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While the world relies on COVID-19 testing to contain the pandemic it is pinning its hopes on a vaccine.
But what role will testing play if a vaccine is found?
The boss of one COVID-19 test kit maker reckons the test kit market won’t be wiped out by the discovery of a vaccine.
“Our thinking is COVID-19 testing is going to be a business that lasts for several years not several months,” Atomo Diagnostics (ASX:AT1) CEO John Kelly told Stockhead.
It has been one of the few new listees on the ASX in recent months. It has also been particularly successful having nearly doubled since listing at 20c.
“I don’t think there is going to be a magic vaccine, that suddenly pops out, everyone is vaccinated and two months later COVID-19 has gone away,” Kelly said.
“There will be vaccine candidates that come to market and they’ll provide some level of immunity.”
But Kelly noted such vaccines may not be able to guarantee immunity from coronaviruses like vaccines for other diseases can.
“The roll out itself across 7 billion people is going to take another couple of years and I think people will need to be tested not just prior to that but through that process.”
While Atomo is looking to scale up to continue to meet demand for COVID-19 testing, it is also working on growing its non-COVID business avenues.
“We’ll be looking to make sure we have new business that’s non-COVID … so as and when COVID-19 becomes less relevant for our business we have new revenues to support the business longer term,” Kelly explained.
Atomo is already in the HIV market and expects to see a sizeable step up in the back end of the year.
“Some of the tenders in global health through the February-March-April period were put on hold as governments prioritised COVID,” Kelly said.
“They are starting to now come back out so we do expect to see a catch up in the HIV business as we get up to the end of the year and move into next year.
“But our medium-term expectation on the HIV business is that will continue to grow.”
Atomo this week announced an agreement to enter North America with US-based diagnostics specialist Access Bio.
Access Bio will have exclusive sales rights in North America and non-exclusive sale rights in certain other parts of the world.
This follows Atomo’s test kit receiving an Emergency Use Authorisation by the US Food and Drug Administration last week.
Access Bio must sell at least 2 million products by September 30 next year. If it can’t it will have to pay for any shortfall. There is an option for extension of the deal.
Kelly told Stockhead life as a listed company had been busy.
“It’s been an adjustment for everybody – the board, executive team and staff to transition from private to publicly listed,” he said.
“But I think we did our planning before we listed and adapted quite well. So I think things are going reasonably positively.”