Health Check: Lumos shares 150pc brighter after company-making US diagnostics deal

• Lumos Diagnostics says its US distribution deal is worth up to $487 million
• Impedimed’s US device sales are on a roll
• Noxopharm treats its first lupus trial patient  

In one of the “largest distribution deals of its type” by an ASX-listed point-of-care diagnostics company, minnow Lumos Diagnostics (ASX:LDX) has inked a US compact worth up to US$317 million ($487 million) over six years.

The agreement is with the Hong Kong-based Phase Scientific and relates to Lumos’s lateral-flow assay, FebriDx.

With a finger prick blood sample, FebriDx enables clinicians to differentiate between bacterial and non-bacterial acute respiratory infections in around 10 minutes.

Lumos expects to sell Febridx under a mechanism called the CLIA (Clinical Laboratory Improvements Amendment ) waiver.

The provision is for simple tests that have an insignificant risk of an erroneous result and can be used by less trained staff such as nurses and receptionists.

Dissecting the deal

As is always the case with such deals, the up-front amount is modest: US$2 million by way of a US$1 million exclusivity fee and a US$1 million pre-paid purchase order.

Phase Scientific pays a further US$1.5 million from a further purchase order when Lumos lodges the CLIA waiver application.

Investors should expect this within three months.

There’s then a further US$5 million pre-paid order if Lumos achieves the exemption.

Between the second and sixth years, Phase’s minimum order quantities gradually ramp up – and that’s where the US$317 million comes into the picture.

Put in context, Lumos was valued at a little over $20 million before this morning’s 150% romp – handy pocket money for billionaire backers Andrew and Nicola Forrest, who hold 19.9% of LDX’s stock.

“This agreement validates the value of the FebriDx technology and provides a clear pathway to the US market, which we expect will accelerate rapidly,” says Lumos CEO Doug Ward.

To support the requisite CLIA waiver application, Lumos is carrying out a supportive study which has enrolled 105 of the targeted 120 bacterial positive patients.

Stretched US hospital funding is no impediment to Impedimed

The US also is proving fertile ground for ImpediMed (ASX:IPD), with sales doubling in the June quarter.

The maker of a lymphodema detection device called Sozo, Impedimed sold 44 units in the US in the quarter, compared with 22 in the March quarter.

This included a nine-unit contract with Legacy Health, which has six hospitals and 70 primary care facilities across the east coast.

Renewals during the quarter took total contract value (new and renewed contracts) to a record $6.3 million, 29% higher than the March stanza.

“Over the last year, Impedimed has seen a significant increase in leads and opportunities resulting from the initiatives implemented under the new leadership team,” the company says.

Management expects a current level of sales in the current quarter, “with improvement in subsequent quarters as the pipeline matures and additional internal initiatives take effect.”

Lymphodema is swelling of the limbs, typically the arms and legs, usually caused by cancer treatments.

Before Sozo came along, the condition was appraised with a tape measure.

The sales uptick qualifies Impedimed for an additional US$5 million under a US$15 million debt facility, with specialist lender SWK Funding.

Impedimed plans to release its quarterly numbers on July 31.

Imugene targets $37.5 million equity raising 

Immuno-oncology play Imugene (ASX:IMU) has raised $22.5 million in an institutional placement and hopes for another $15 million by way of a share purchase plan.

The whip ‘round follows Monday’s revelation of further strong clinical results from the company’s phase 1b trial of its blood cancer therapy, Azer-cel.

The funds will support a planned US pivotal trial.

The company did the deal at 33 cents, a 22% discount to Monday’s frozen price. Subscribers receive a free option on a three-for-four basis, exercisable at 43 cents after March next year.

On exercise of those options, investors receive one-for-one piggyback oppies, exercisable at 86 cents.

The raising takes Imugene’s cash kitty to $64 million.

Noxopharm hopes that HERACLES will slay lupus

Noxopharm (ASX:NOX) has dosed the first patient in its first-in-human trial of its drug candidate for the painful autoimmune disease lupus.

Dubbed HERACLES, the dose escalation study aims to evaluate the safety and tolerability profile of its candidate, SOF-SKN.

Lupus affects about five million people globally – 90% of them women.

The HERACLES trial targets cutaneous lupus erythematosus (CLE), the most common form.

This is when body’s immune system mistakenly attacks skin cells, causing inflammation and skin lesions and sores.

SOF-SKN modulates inflammation at its source.

“The global lupus market is worth more than US$3 billion and is expected to grow significantly over the coming years,” Noxopharm CEO Dr Gisela Mautner says.

SOF-SKN is an exponent of the company’s core tech Sofra, acquired from the Hudson Institute of Medical Research.

Noxopharm hopes to apply the core Sofra tech to rheumatoid arthritis, type 1 diabetes, inflammatory bowel disease and dementia (which also is immune related).

HERACLES stands for “harnessing endogenous regulation against CLE study”.

Heracles was famed in Greek mythology for his immense strength, courage and ability to slay monsters.

Along with a bucket of money, these are all prerequisites for drug development.

August 1 D-day for Trump tariff drug slug?

It’s hard to distinguish Donald Trump’s genuine intentions from his brain farts, but it looks like the global pharma sector should expect some movement on his threatened pharma tariff by August 1.

Trump told reporters that along with a tariff on semiconductors, he should announce the drug impost “probably at the end of the month”.

“We’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we’re going to make it a very high tariff,” the Prez said.

Drug makers can avoid the tariff – mooted to be up to 200% – by moving drug manufacturing to US shores.

As reported, CSL is the most likely ASX drug stock in the firing line.

But given the maker of  plasma derived therapeutics draws on US blood donors and has some US manufacturing, the repercussions are as clear as Trump’s Ukraine peace plan.

At Stockhead, we tell it as it is. While Lumos Diagnostics is a Stockhead advertiser, the company did not sponsor this article.