Lumos Diagnostics’ strong Q4 paves way for exciting phase of growth

Special Report: Lumos concludes FY24 with strong quarterly results, reflecting significant financial growth and profitable business partnerships. This momentum sets the stage for the company to further expand the reach and impact of its Product and Service businesses – globally.

Lumos Diagnostics (ASX:LDX), a global leader in rapid point-of-care diagnostic technologies, has shared significant highlights from its fourth quarter of FY24, which ended on June 30.

The report captures defining achievements for the company, reflecting significant commercial traction – with investor eyes now focused on the company’s sustainable and profitable business model, which has included securing large deals with global leaders like Hologic (more on that below).

One of the most notable highlights from the report is Lumos’ positive cash flow of US$3.1 million for the quarter. This marks a substantial improvement from the US$2.0 million cash generation in the previous quarter.

As a result, the company’s cash balance has increased to US$6.5 million, providing a solid foundation for future growth and operational stability.

Operating costs for the quarter, meanwhile, were reduced to US$4.0 million, down 9% from the previous quarter.

In terms of top line revenue, Lumos also demonstrated solid growth.

The unaudited revenue for Q4 reached US$4.3 million, an 8% increase from the US$4.0 million reported in Q3. And for the entire FY24 fiscal year, Lumos achieved an unaudited revenue total of US$11.1 million, marking a 6% rise from the previous fiscal year’s US$10.5 million.

A significant portion of this revenue growth came from Lumos’ Services segment, which reported US$4.0 million in revenue for the quarter.

This represents a 21% increase from the previous quarter and was primarily driven by consulting and development services related to the Hologic fFN Development Agreement.

The intellectual property licensing revenue from the Hologic IP Agreement also contributed to this growth.

Meanwhile, revenue from the Products segment was US$0.3 million for the quarter, which was lower than the previous quarter’s figures.

This decrease was anticipated and aligns with management’s expectations, given that the US flu season for 2023/24 had largely concluded, leading to reduced sales of ViraDx and FebriDx.

Despite this quarter’s dip, product revenue for FY24 saw a remarkable increase of 300%, to US$1.3 million, driven by strong sales growth in FebriDx and ViraDx.

Lumos’ CEO, Doug Ward noted: “It was pleasing to see our efforts rewarded in the second half of FY24, with the momentum continuing to build.

“The Hologic Agreement, announced in January 2024, helped position Lumos on a solid footing.

“Supported by positive cashflow generation in the final two quarters of the year, our balance sheet finished in great shape with US$6.5 million cash in the bank.”

FebriDx making rapid ground

FebriDx, Lumos’ leading point-of-care test designed to empower clinicians to rapidly distinguish between viral and bacterial infections, and has made significant commercial traction in key global markets.

The test has received regulatory approvals in key regions, including the US, UK, Europe, Canada, UAE, and Australia.

In July 2023, the US FDA granted clearance for FebriDx to be marketed in the US, further solidifying its market presence in this global leading diagnostics market.

By the end of December 2023, Lumos had commenced commercial production of FebriDx, with the first US commercial order delivered in January 2024.

The company has since seen multiple new customers adopt FebriDx, particularly in university student health and urgent-care markets.

Lumos’ expansion efforts are not limited to the US. The company has also extended its distribution agreements with Henry Schein to include Australia, New Zealand, and Belgium, enhancing its global reach.

Additionally, a recent study published in the international journal Infectious Diseases and Clinical Microbiology highlighted the potential benefits of FebriDx in optimising antibiotic use and reducing unnecessary chest X-rays in paediatric patients with acute respiratory infections.

ViraDx’s strong market debut

ViraDx, another key product from Lumos, is a rapid point-of-care diagnostic test that simultaneously detects COVID-19, influenza A, and influenza B.

In September 2023, the FDA granted Emergency Use Authorization (EUA) and a CLIA Waiver for ViraDx, enabling its use by healthcare providers in the US.

Lumos has since established a strong sales channel for ViraDx, signing agreements with 19 customers or distributors during FY24.

The test’s strong market debut in the March quarter contributed significantly to the US$0.3 million in product sales for the fourth quarter.

Although sales have been lower in Q4 due to the end of the flu season, ViraDx is expected to continue generating revenue through ongoing COVID-19 cases and upcoming distribution stocking orders.

More interesting reading here: Lumos steps up antibiotic resistance fight to Australia & NZ

Strong IP agreements

In terms of development and intellectual property agreements, Lumos has made notable and transformative progress with its partner, Hologic.

The company signed two key agreements with Hologic in January: a US$10 million IP Agreement and a US$4.7 million Development Agreement.

These agreements essentially give Hologic the exclusive right to use Lumos’ specialised technology to develop its fetal fibronectin (fFN) test – a pre-term pregnancy test designed to detect a specific protein at the boundary between the mother and fetus.

The key goal of the agreements is to adapt the test for use on Lumos’ proprietary reader platform.

The development program is divided into three phases, with Lumos successfully completing Phase 1 and receiving a US$0.4 million milestone payment.

The company has begun Phase 2, which aims to demonstrate the assay’s ability to detect biomarkers associated with the new fFN test.

Successful completion of Phase 2 will trigger a US$0.6 million payment, while the remaining US$3.7 million is contingent upon the completion of Phase 3.

“We delivered on our Phase 1 milestones of the Hologic fFN development agreement and are currently progressing on delivering Phase 2 of the agreement,” said Ward.

“We continued to extend our distribution agreements for FebriDx with Henry Schein in the US, Australia, New Zealand and Belgium. Our distribution channels for ViraDx have also expanded over the period.

“This provides much optimism for delivering product sales growth in the upcoming northern hemisphere flu season.”

Now read: Lumos passes milestone with Nasdaq-listed Hologic to revolutionise birth diagnosis

Lumos’ outlook

Looking ahead, Lumos says key priorities include expanding its revenue in both its Services and Products businesses.

For Services, the focus will be on building a sustainable pipeline of commercial projects and ensuring milestones are met under the Hologic fFN Development Agreement.

In the Products segment, Lumos aims to drive growth for FebriDx and ViraDx by enhancing production, marketing, and distribution efforts.

The company is also preparing for a trial to extend FebriDx’s label to CLIA-waived settings in the US, which will significantly expand its market opportunities.

Overall, the company’s progress during the quarter in expanding its product offerings and global reach positions it well for continued success in the coming fiscal year.

“Looking into the first quarter of the new financial year, we are preparing for the commencement of our FebriDx trial in the upcoming US flu season,” Ward said.

“A successful trial outcome, leading to CLIA Waived labelling in the US has the potential to open significant market opportunities in future periods.

“During FY25, we will also continue to pursue new partnerships with leading women’s health companies, whilst exploring opportunities for developing and commercialising new in-house products.”

“I am very optimistic about the future outlook for Lumos and look forward to providing further positive updates to the market over the course of the year,” said Ward.

This article was developed in collaboration with Lumos Diagnostics, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.