Melbourne-based medtech companies Lumos Diagnostics and Planet Innovation are set to help Victoria shore up its supply of sought-after COVID-19 rapid antigen tests, announcing a manufacturing deal with the state government on Wednesday.
The partnership will lead to the creation of a $17.2 million rapid diagnostics manufacturing facility, equipping Victoria with the capability to make not just COVID-19 rapid tests, but also tests for flu and a range of bacterial infections.
Stuart Elliott and Sam Lanyon’s Lumos Diagnostics and Planet Innovation are teaming up to produce rapid tests in Victoria.
The companies will be capable of producing 1 million tests a month by April, scaling to 3 million a month by July this year. From October, it expects to be able to produce 50 million tests a year.
The Rapid Diagnostics Manufacturing Facility and Innovation Hub will be based in the eastern Melbourne suburb of Blackburn and production of the facility is already under way. It will create 70 ongoing jobs.
While the centre is being completed, the initial tests will be produced out of Planet Innovation’s existing facility in the nearby suburb of Box Hill.
Production of the rapid antigen tests will be dependent on approval by the Therapeutic Goods Administration. The timing of this is dependent on the TGA, but Lumos executive director Sam Lanyon was confident the company had ticked all the necessary boxes.
Its tests are already approved and in use in Canada and Europe.
Mr Lanyon told The Australian Financial Review the deal with the Victorian government had given the company the confidence to invest in the facility.
“We don’t know what the market will be like in two, three or four years,” he said.
“But it doesn’t take much local procurement to drive a company like ours to make the investment here.
“[Eventually] I think it will be a blended mix of products that come out of the centre, [not just COVID-19 rapid tests].”
Planet Innovation co-CEO Stuart Elliott said that since December, the Australian market had caught up to the knowledge in the rest of the world about the importance of rapid tests.
“We do see it as a bit of an opportunity. Hopefully like telehealth, or Teams meetings, people get used to the idea that they can buy these for the flu and other diseases. There is lots of clinical information showing these tests … provide better outcomes for the healthcare systems.”
Lumos, which was spun out of Planet Innovation and still counts it as a major shareholder, listed in August last year with an issue price of $1.25.
The deal was music to the ears of Lumos investors, which include substantial shareholders Perennial Value Management, Acorn Capital and Ellerston Capital according to the most recent annual report, with the stock now up almost 60 per cent since its 66¢ share price low in December. On Wednesday, it had jumped more than 10 per cent in a day to $1.03 thanks to the deal.
As well as COVID-19 rapid tests, the company produces a world-first finger-prick blood test called FebriDx, which can indicate within 10 minutes if a person has a bacterial infection. It also makes a dual rapid test for influenza and COVID-19, which it plans to also bring to Australia.
Its new local manufacturing facility will also be able to produce tests spanning tropical diseases, influenza, sexually transmitted disease, and chronic diseases.
It will be able to manufacture tests made not just by Lumos, but other diagnostics innovators.
“Being able to scale up production so quickly shows the strength of Victoria’s advanced manufacturing capabilities,” Victorian Premier Daniel Andrews said.
A Lumos investor who did not want to be named said it was the long-term potential for the facility to manufacture tests beyond COVID-19 which was exciting.
“It’s not just RAT-specific. It’s not just a COVID-19 story – it’s a quality point-of-care diagnostics company, that’s being supported by the government and can generate a raft of assays for all sorts of diseases,” they said.
“It could be an enormous cash cow.”
“[But] the biggest thing with this announcement is the validation that they’re the preferred partner [of the Victorian government].”
Yolanda Redrup is an award-winning journalist who writes on technology and healthcare from the AFR Melbourne newsroom.