A Melbourne biotech has axed plans to build a Victorian manufacturing plant for rapid antigen tests after the company told the state government it doesn’t have the resources to commit to the plan.
Lumos Diagnostics, which listed on the ASX last year, was planning to set up a $17.2 million facility to make diagnostic tests, with funding support from the Victorian government.
On Monday, the business told investors it was pulling the pin on the proposal, saying it did not have the capital investment or human resources to set up the facility.
“While we continue to see great potential for establishing a diagnostics capability in Victoria, at this time, Lumos needs to focus on leveraging its existing assets rather than investing in new assets,” chief executive Doug Ward said.
The decision comes after the company announced plans to close its US production facility in Sarasota, Florida, at the start of this month.
Lumos is developing a COVID-19 rapid test and makes a tool that lets doctors work out whether an infection is bacterial or viral, enabling them to decide whether a patient needs antibiotics.
The business suffered a major setback to its growth strategy last month when the US Food and Drug Administration rejected that test for sale, citing concerns it might produce false negatives when detecting viral infections, and that this could contribute to the spread of COVID-19.
Lumos has appealed the FDA’s decision, but the situation has forced the company to review its operations and expenditure.
Instead of expanding manufacturing locally, the business will focus on its US operations, Ward said.
“Lumos is currently concentrating on securing regulatory clearances to drive commercial sales
revenue from its portfolio of point-of-care diagnostics products, and on leveraging its reader technology and established development services and manufacturing capability in Carlsbad [California], to grow its commercial services business.”
Shares jumped 5.8 per cent to 5.5 cents on the news, but are down 94.6 per cent over the past 12 months.
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Source: Thanks smh.com