Update (4:47pm AEST): At the time of writing this article shares were up 82 per cent, but in the last 10 minutes of the market trade it shot up further to double for the day, sitting at $0.40 per RNO share.
Shares in Rhinomed (ASX: RNO) have charged 82 per cent higher today after the wearable nasal and respiratory technology company received purchase orders from the NSW Government for its patented, self-administered nasal swabs.
The group has begun supplying NSW Health Pathology with an initial one million Rhinoswabs as part of a program to support testing capability.
The orders are expected to be fulfilled over coming weeks, while Rhinomed is now scaling up its manufacturing facilities to respond to growing domestic and international demand for its innovative technology.
The company's points of difference are the comfort and convenience of its swabs, as well as the fact they can capture a larger sample and accelerate the sample collection process, significantly reducing waiting times.
It is a technology that works with existing polymerase chain reaction (PCR) pathology workflows and equipment, with an equivalent cost and quality to the US and European standard of care nasopharyngeal swabs.
"We are thrilled to receive this support for this Australian innovation," says Rhinomed CEO Michael Johnson.
"The Rhinoswab can make a meaningful impact on the SARS-CoV-2 testing process and enable more people to be tested quickly and easily.
"With approximately two billion SARS-CoV-2 tests having been carried out globally over the last 18 months (close to 26 million* in Australia alone), there is a major opportunity for Rhinoswab to radically improve the testing process, clinical outcomes and user experience."
Today's announcement is in stark contrast to where Rhinomed found itself in August 2020, its shares having fallen by three quarters in the preceding year. Even though the commercialisation of its Pronto Sleep technology was expanding in the United States, Rhinomed had pinned its hopes on a vapour inhaler for medicinal cannabis; an oversupplied market that was in decline.
But just as the company's leadership had pounced on the opportunities of what was a booming medicinal cannabis market in 2018, in September 2020 it announced the fruition of a logical COVID pivot; not just an intention, but the declaration of advanced development for a high-yielding nasal swab that can collect samples from the nose to test for the presence of upper respiratory tract diseases. Shares rose by 50 per cent in one day, from 8cps to 12cps.
"An increasing body of evidence and research supports the proposition that mass, high-frequency testing could be a vital tool in managing epidemics, pandemics and infectious disease outbreaks," Johnson said at the time.
"Rhinomed believes that an effective, easy-to-use and comfortable nasal swab that everyone can use, every day, could play an important role in achieving this outcome."
He said the company was rapidly scoping out manufacturing solutions and would register the device in Australia, the USA and the European. Less than year later, all these goals have been achieved as Rhinoswab is registered with the US Food and Drug Administration (FDA), the Australian Therapeutic Goods Association and has a European CE (Conformité Européenne) mark.
Today RNO shares jumped to $0.365 each today on the news, with expectations revenue from the initial order would represent 25-35 per cent of unaudited FY21 revenues of $3.9 million. Investors clearly believe profits will follow suit, as the company's market capitalisation is at more than $92 million at the time of writing.
Interim results from a recent comparison study with 204 participants, completed at CWZ and Radboud University Medical Center, a leading teaching hospital in Nijmegen in the Netherlands, are in line with previously announced user study results and showed participants' strong preference for the Rhinoswab when compared to the traditional nasal swab:
- 89 per cent of respondents preferred Rhinoswab to the Nasopharyngeal swab
- 98 per cent of respondents felt no pain with Rhinoswab vs 48 per cent with Nasopharyngeal swab
- 98 per cent of respondents needed little or no guidance when using Rhinoswab
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