Atomo Diagnostics Faces Regulatory and Execution Risks Despite US Contract Win

• 27% reduction in net loss to AUD 4.97 million
• 7% decrease in revenue to AUD 3.79 million with improved gross margin to 51%
• Raised AUD 3.13 million via placements and Share Purchase Plan
• Secured US distribution contract via Lumos Diagnostics worth up to US$316 million
• Board changes with new appointments and resignations in May 2025

Financial Performance and Operational Highlights

Atomo Diagnostics Limited has reported a notable improvement in its financial results for the year ended 30 June 2025. The company’s net loss narrowed by 27% to AUD 4.97 million, down from AUD 6.85 million the previous year, despite a 7% decline in revenue to AUD 3.79 million. This revenue dip was offset by a significant improvement in gross margin, which rose from 39% to 51%, reflecting a shift towards higher-margin sales in developed, high-income countries and growing momentum in HIV self-testing products.

Operating expenses were carefully managed, with overheads reduced by 4% year-on-year, continuing a multi-year trend of cost discipline. The company’s cash reserves stood at AUD 3.22 million at year-end, with no debt on the balance sheet, underpinning its financial stability.

Capital Raising and Strategic Growth Initiatives

During the period, Atomo successfully raised AUD 3.13 million through placements to institutional and sophisticated investors, alongside a Share Purchase Plan for eligible shareholders. The capital raise, priced at AUD 0.0185 per share with attached options, is earmarked to expand Atomo’s product portfolio and support commercial activities in key markets.

One of the most significant developments was the securing of a US distribution agreement by Atomo’s strategic partner, Lumos Diagnostics Limited. Lumos signed a six-year exclusive deal with PHASE Scientific for the FebriDx Test, which relies on Atomo’s patented Pascal cassette for delivery. This contract, contingent on regulatory approvals including a CLIA waiver, could generate up to US$316 million in revenues over the term. Atomo has already received an initial order worth US$410,000, signaling strong demand ahead.

Product Development and Regulatory Landscape

Atomo continues to invest in innovation, having been awarded a CRC-P government grant to develop a novel Active Syphilis Test. The company recognised AUD 387,000 in grant income during the year related to this project, which complements its existing portfolio of point-of-care diagnostic devices.

Regulatory compliance remains a core focus, with Atomo navigating approvals across multiple jurisdictions including Australia, the US, Canada, Europe, and emerging markets. The company’s adherence to stringent quality and safety standards is critical to maintaining market access and supporting future product launches.

Leadership and Governance Updates

The year saw significant board changes, with John Kelly appointed Interim Chair in addition to his role as CEO and Managing Director. New non-executive directors Patrick Cook and Anthony May joined the board in May 2025, while several long-serving directors resigned. These changes reflect a refreshed governance structure aimed at steering Atomo through its next growth phase.

The company’s financial statements were audited by BDO Audit Pty Ltd, which issued an unmodified opinion, reinforcing confidence in the reported results and disclosures.

Bottom Line?

With a strengthened balance sheet and a major US contract underway, Atomo Diagnostics is poised for a pivotal growth phase, though execution risks and regulatory hurdles remain key watchpoints.

Questions in the middle?

• How will Atomo capitalise on the US distribution contract amid pending regulatory approvals?
• What is the timeline and commercial potential for the Active Syphilis Test development?
• How will recent board changes influence Atomo’s strategic direction and operational execution?