Below responses, take with them what you must. I have added in red brackets my commentary in my opinion on the comments provided back.
- Commentary provided in recent webinars indicatedrobustorders for the products with an indication Febridx was seeing good uptake (comments from Paul specifically around the US College market). This appears not to be the case as the product revenues for this quarter were again heavily reliant on Viradx, a product which we have beenadvised will cease.In the short term (3-6 months)are we expected to see a substantial increase in the revenues for Febridx as this is the long term product? Does Lumos intend to provide announcements to the market for substantial orders being received instead of waiting for the quarterly reporting?
Product sales were up 200% in Q1 FY25 over Q1 FY24, and consistent with Q4 FY24, despite being the “low season” for Product sales in the US.
The US flu season is typically October through Feb/March. Lumos launched ViraDx and FebriDx in December 2023/ January 2024. (Not entirely true as Viradx was available in the Canadian market in 2022 under the interim use order) As we enter our first full flu season in the US, our objective remains to appoint national and regional distributors to obtain US market access. Lumos has made several announcements as distributors, like Thermo Fisher, have been secured. Initial stocking orders with distributors and direct customers have been positive for the first quarter (July, August, and September), as we would not expect repeat customer orders during the summer months based on the lack of patient infection rates. (So are they expecting "ramped" orders for the coming/current quarter? Surely it is to reflect greater than $700,000USD).
The majority of sales have been for ViraDx as the test is CLIA waived, and the use of a Covid/Flu A&B test is well established in US clinical pathways as a standard of care with established reimbursement.
Lumos remains positive regarding ViraDx and Lumos has not advised that ViraDx will cease. (Is this accurate as other holders indicated differently at the direct investor presentations?)
ViraDx is now sold in an extraordinarily competitive market as the US FDA has issued Emergency Use Authorization (EUA) to 12 new combo tests since the Lumos authorization was secured. These new EUA tests are from Asia and the market strategies are primarily focused on offering a heavily discounted price per test.
Regarding FebriDx, Lumos is pursuing the path to establish FebriDx as a standard of care in the US. This path is a methodical process that will take several years to complete. Currently, FebriDx is cleared to be marketed in moderately complex certified testing environments. These locations are typically in hospitals and urgent care/emergency rooms. As most of these locations are part of hospitals, they have well documented and practiced clinical pathways. Since FebriDx is a novel test with a unique label, establishing the test in a hospital clinical pathway is a systematic process which requires physician education, clinical awareness, and work with each individual healthcare institution to build the clinical case. The case is then validated for the clinical and economic benefit to have FebriDx established as an authorized/ accepted part of their acute respiratory infection pathway.
As we’ve previously indicated, with respect to the ViraDx and FebriDx sales outlook, we anticipate FY25 sales for both products to be up materially on what was achieved in FY24.
Lumos does not intend to provide separate announcements to the market for orders that are received. We don’t believe that is necessary, and could also be frowned upon by the ASX as “ramping”, so we will continue to provide regular updates in the quarterly reporting. Having said that, under the ASX’s continuous disclosure requirements, any orders deemed to be “material” to Lumos will be announced. (it is now unlikely to have any update outside of the quarterly reporting around deals with Febridx and i would be surprised if there was such a material order they we would expect an announcement. Further, i suppose it is dictacted on what the company deems material or not anyway).
-Has Lumos engaged in marketing of the product in Australia and has there been any solid engagement from the health sector or Government to take up the product as a regular tool in their kit bags?
Lumos has just begun to actively market FebriDx in Australia. We have signed Regional Health Care Group, a Henry Shein organization, to market and sell the product in Australia, and they have placed their first modest stocking order. We are currently working with an outside agency to engage a possible campaign to promote FebriDx use in the Australian market. This strategy is in its infancy, and there is no firm commitment to utilize FebriDx in Australia, nor reimbursement provided by the government or insurers. (I would take it if there is a distribution announcement, there is probably a 6-12 month wait at best before robust traction occurs in the new demographic, regardless if its with an established relationship or not).
-Can Lumos provide a comparative breakdown on the revenues for each product per region to provide better clarity on the uptake of the individual products?I can't fathom how the products which have been in the market for some time (globally) have not attracted an increase in sales compared to previous years. Lumos generated$320,000 in product sales in 2023which was attributed to the international market (excluding AUS/NZ and the recent expansion to Belgium etc).$1.2Million in 2024which includes the newly established US market. This is a substantial drop fromCovid sales of circa $2.2Million.Even with an increase in the coming quarter (similar to the current quarter for 2023), the projection appears bleak for any increase in product sales compared to the previous corresponding period and that is with an increase to 30+ distribution partners.
Lumos does not provide a further breakdown in our financial numbers or unit volumes for product sales at the moment. As represented, FebriDx is a new product with a unique clinical value and to change the practice of medicine is a very systematic process that takes time to introduce, educate, and establish as a new clinical paradigm. Additionally, the US market is the vast majority of the Point of Care (POC) market. The US reimbursement and method of healthcare funding is dramatically different than in most countries. International markets with a universal public government funded approach have a set budget and introduction of any new tests force the cost to the patient. If the new test cost is not transferred to the patient, current budgets must be defunded to pay for new testing expenses. The process to justify these types of changes through economic validation takes significant financial investment. At this stage, we are investing in clinical trials, and sales and marketing in the US and not internationally as Lumos expects a higher return on investment from this market. (I honestly would expect that the company has a "complete" marketing approach to all regions and would allocate funding regardless? Otherwise, what is the point of making the product available through the government approvals and distribution agreements if not to provide marketing and sales efforts globally? Surely $100 for a Febridx caricature could be done and then distributed to global partners for use?)
- Lumos has always indicated it is primarily a services company first and a product company second. Removing the Hologic partnership (which is inflating revenue numbers per quarter through accounting methods) and no guarantee of ongoing revenues from this partnership, can Lumosplease clarify in more detail its existing partnerships with other companies including Burnett Institute, MicroPak, Binx, Liaison as well as further information on the food safety testing, and animal health products?It is still quite unclear what these partnerships mean for the long term of the company. Are partnerships with Liaison etc still active? The ongoing services revenue also appears flat compared to previous years.
At the moment, Lumos revenue is primarily driven by the services business. We continue to maintain that business and are thrilled with our relationship and project management with Hologic. We do not believe it is fair to say the Hologic partnership is “inflating revenue numbers per quarter through accounting measures”. The contracts with Hologic are genuine development and IP payments, and rightfully recognised through the income statement as revenue as agreed with our auditors, William Buck. (personally dont agree with the accounting measures, regardless if William Buck says so. Payments have been received on hand and are already technically cash on hand. Entire revenue could have been accounted for in the quarter it was received. Instead, it is being distributed per quarter to spread the revenue and allow a consistent revenue flow until the funds run out, likely when the phase 3 is complete and we have an idea. Further to the below as well, likely clinical trials then required for FFN, furthering the goal posts as well.
As with all project work, there is no guarantee for future revenue. As outlined in recent presentations, it is the intent of the Hologic partnership that there will be future revenue associated with product development projects, clinical trial support, and long-term manufacturing for both the instrument and fFn product. (They have always indicated the potential for annuities for manufacturing both the instrument and the FFN product, however the former around clinical trials etc weren't effectively communicated. Whilst this is a "next gen product" on an existing product which has been in market for 20+ years, is there a requirement for the full clinical trials being similarly conducted with Febridx? If so, that would then add a further 12-24 months on the end date of the prototype which is end of 2025?)
As disclosed on August 26, 2024, the Burnet Diagnostics Initiative (BDI) builds on feasibility studies from 2023 aimed at developing Alanine Transaminase (ALT) lateral flow tests, customized Lumos readers, and a mobile application for use in an upcoming U.S.-based clinical trial. Over the next 9–12 months, Lumos will provide development, regulatory, and manufacturing services, generating fees of between US$0.7 million and US$1.0 million. If successful, Lumos expects to further support the BDI in subsequent trial phases and regulatory submissions. (Cant have expected more out of this comment. Rinse and repeat. Call it $250,000 a quarter in revenue at best for this deal until a product is developed and then we work out if ongoing revenue is available)
The Binx partnership involves a U.S. reseller agreement to distribute the Binx io platform for testing Chlamydia and Gonorrhea in both men and women. This agreement is intended to help Lumos establish key relationships in the women’s health market—a sector Lumos is targeting for the future development of its own women’s health products. (They are then making 2/10ths of bugger all to sell someone else's product in the hope the relationships remain a constant for their own product which is yet to be determined). Kind of a nothing deal for the short to medium term.
Regarding other partnerships, as the partners wish to keep the projects as confidential as possible, and as part of our contractual arrangements, Lumos cannot provide any further information at this time. (This comment was going to be obvious).
-Is there a reason the company is reporting figures in both AUD currency and USD currency in the report?Specifically related to the capital raising funds and current cash balance. It's reported $5.7Million USD in cash on hand and then $6.9Million AUD in capital raising funds from the retail offer. Why is the entire report not kept in USD reporting for simplicity sake?
The company’s reporting currency is USD, as nearly all transactions are in the US, or denominated in USD. However, as the parent company is in Australia, and listed on the ASX in AUD, we believe that some numbers make sense to describe in AUD. This is so they can be tied back to actual supporting documentation (ie. capital raises, offer documents and so forth), and be able to be tied back to the supporting share price and market info (ASX, market capitalization and so forth).
We take your comments onboard and will consider providing relevant information in both currencies in future.
- The company has always said it is unhappy with the current state of the share price and where its trajectory has been.What is the company doing to provide a robust platform for growth in the share price and a reasonable return to shareholders?At time of providing these questions, the share price has dropped 97% from initial IPO price. It has dropped a relative 73% from the FDA approval price. It has now dropped a relative 10.5% from the recent capital raising price.
Lumos has a long-term strategy that it is executing on, which is a combination of a clear executable business strategy and delivering genuine progress, combined with improved IR and PR to communicate this to the wider market. Unfortunately, we have no control over short-term price movements. Over the long-term, we would expect to see the share price better reflect the value being created by the company. (Define what everyone believes is "short term" v "long term" Short term to some, means long term to others, so this comment is a bit vague. Lumos is in for the 30+ year haul and are probably commenting on this basis. Is 12 months short term to most investors? Is 3-4 years since IPO? Fact is, the company has done nothing but effectively wither from $1 to .01c and we could be just looking at a "short term" dead cat bounce into the .05c mark, slowly to fall back to .01c.
Who knows where the short term (next 12 months?) projects the company share price and who knows where the long term (5 years?) share projects the company.
All i know is that the communication over the last 12 months was basically pegged on the US launch being the next best thing to sliced bread and we are yet to see it. I would say if the next quarter sales aren't drastically stronger (out of both products), then a lot of people will be out for the mid term?Further, the chart for the recorded cases of influenza are increasing to "minimal" activity with one state showing a high level of activity. It is a positive moving forward, so hopefully Viradx shows some drastic increase in revenue from this toward the end of year. Unlikely to see any drastic Febridx sales IMO.
(20min delay)