Atomo Diagnostics Limited (AT1) Earnings Call Transcript & Summary

Atomo Diagnostics and we're here today. I'm joined with our Financial Controller, Suzy Elhlou, for our FY '25 results presentation, and thank you for joining us. By way of an introduction for anyone who's new to Atomo or the story, I just wanted to take a moment to talk about who Atomo is and what we do. We're an innovator in point-of-care diagnostics, and we're an Australian-based company with low-cost operations overseas that allow us to be competitive in international point-of-care rapid test markets. We've developed a range of patented portfolio of products that really move the dial in terms of usability and ease of use in point-of-care testing, primarily blood testing. And our technology is now increasingly recognized globally as delivering best-in-class performance in both the hands of untrained professional users as well as at-home mail users. And that's an emerging market that we think our technology really is instrumental in helping to support. In terms of that patented technology, how we make a business model with that technology, we've really got 2 arms to the business. One is the development and supply of finished end product tests to market with a primary focus in sexual health, and we'll talk a little bit about those products in that portfolio over the longer-term. And then outside of areas where Atomo is the listed manufacturer, we have proprietary technology devices, cassettes that we supply to other diagnostics companies for applications that they want to bring to market, and we're the critical supplier to them for those products. And we have a solution, Pascal in market that has got enormous potential and has made some good strides this year in terms of its journey to becoming, we think, a gold standard for testing in international markets as well as Florey, a new device that's been adapted from Pascal to address another unmet need in the market that we've identified, and we'll talk a little bit about those in this presentation. In terms of corporate business activities, it's been a busy year, FY '25 for Atomo. We have gone through a period of Board refresh. We have had 2 new directors join the Board, both with significant IVD diagnostics industry experience, Anthony May and Patrick Cook. We've had a number of directors leave the Board as part of the renewal process. Our Chairman, John Keith, Ms. Deborah Neff and Dr. Paul Kasian, who've departed during the year. And I'd like to take this opportunity to thank them for their significant efforts over the last couple of years in helping get Atomo to where it is today. I'd also like to thank Dr. Cheri Walker for stepping up from non-Exec to chair the ARC Committee. And as part of that refresh, I took on the role of Interim Chair, and that's really been a journey to lean up the Board, help with continued support of reduced OpEx and to make the business a little bit more flexible. So that's been a process that has been done in parallel with some capital activity to repair the balance sheet. We raised just under $3 million net of fees through the year, and I was very pleased to report that, that has been primarily supported by existing shareholders, and that shows a level of support on the current register for the direction of the business and the technology that we've developed. We've also continued to focus over the year on improving our burn rate and a large part of that has been continued focus on reducing costs within the business and a focus on improving our OpEx over the period as we scale up our revenue. And you can see from the small graph down in the bottom corner that we have been making continual progress towards a -- continual progress towards a breakeven position, and that's something that continues to be a very significant focus for the business moving forward. Outside of corporate activities during the year, there's been a number of, I think, quite material commercial deliverables for the business. And we'll talk in the presentation in a bit more detail around kind of each of those assets, what they mean for the business, what stage of commercialization they're at and what we think the future for those assets looks like moving forward. But certainly, with HIV, our core product, our initial product to market on the platform, we continue to see growth in the Australian and European markets, and that's encouraging because they're the markets where we secure the best margin for HIV product supply. We've seen the emergence of a material public health procurement business in Australia funded by the government, and that's really a recognition that self-testing now has a role, I think, a permanent and ever more important role to play in the delivery of public health diagnostics in the market and a transition away from pharmacy-based -- sorry, from laboratory-based testing. We have also been making active progress on a syphilis test development based initially off an Australian government grant. We're very excited about that product, and we'll talk in the presentation a little bit more detail around why. We're excited, but that fits very nicely alongside HIV. The 2 user groups in terms of testing for HIV and syphilis have a very significant overlap and the channels that we've developed for HIV delivery, both consumer health as well as public health are ideally suited to leverage for the delivery of an Active Syphilis test, both professional use and self-test point of care. On the OEM development side of the business, obviously, Pascal has made significant progress over the last year or 2 as both Lumos and NG Biotech have rolled their tests out after a bit of a hiatus through the COVID period where they focused on antigen COVID testing. We're now seeing obviously the fruits of that journey with the Lumos agreement with PHASE, and we'll talk a little bit about that moving forward. Obviously, Pascal has been instrumental in providing the performance to underpin their CLIA waiver process. We're very proud of that. And we think that not only opens up significant revenues on -- through our partnership with Lumos, but more broadly, the ability for Pascal to support CLIA waiver test in the U.S. is very material to us. Pascal, FebriDx being only one application out of potentially many as well as Atomo being able to bring its own products to market in the U.S. off the back of the performance of the Pascal device in that CLIA waiver setting. We also will talk a little bit about a new device, Florey that we've developed essentially a remodified Pascal that looks to address a market that we feel has enormous potential, and we'll talk a little bit about why we think Florey is a good solution for that market and what that market opportunity might look like moving forward. Before we jump into that, I wanted to hand over to Suzy, who's going to step us through this year's FY '25 financial numbers.

Thanks, John, and good morning, everyone, and thank you for joining us today. So I'd like to take a few minutes to walk through our financial results for the period, starting off with our profit and loss statement for FY '25. To begin with, as shown in the P&L summary, revenue of $3.8 million was achieved, and this was broadly in line with prior year period. During the year, HIV sales totaled just shy of $2.5 million. Whilst this is comparatively lower than prior period, this was mainly driven by a reduction in our Global Health funding from the U.S., which did impact our top line revenue. As such, our efforts was redirected to growing momentum in Australia and Europe market, which do yield a significantly better margin and therefore, largely sustained our gross margin from the HIV revenue stream. On the PSP technology side, OEM sales remained comparable with prior period, totaling $700,000, whilst a significant improvement in our development and license fees revenue sustained our top line revenue, contributing more than $0.5 million there. As a result, we're seeing meaningful progress in our margin, which increased from 39% to over 50% in FY '25. So this reflects Atomo's growing revenue streams outside of HIV Global Business Health, which contributes significantly higher margin. So this is an encouraging trend and a key focus area for us and one that we see continuing as we enhance our operational leverage and scale. On the cost side, we also continue to deliver improvements here. Operating expenses were down compared to prior year by approximately $650,000 as a result of our focus on cost management and ongoing efficiency initiatives there. So we're seeing the impact of these efforts now in our bottom line. As a result of improved margins and reduced operating costs, we narrowed our EBITDA loss for the period. So the loss came down by approximately 23% to just shy under $3.5 million. So that's marking a clear step in the right direction towards our goal of achieving profitability. So in summary, we're building a stronger financial foundation, improving our margins, our expenses are moderating and significantly reducing our EBITDA. These are early but important indicators of the progress we are making. So now let's move on to the balance sheet. I'm pleased to report that our cash position remained stable over the period, supported by the capital raising efforts and nondilutive grant funding that we received from -- for the development of Active Syphilis. This financial stability gives us the ability to continue to execute on our strategy with a focus on expanding existing revenue channels and introducing new tests and platform offerings. Cash on hand landed at $3.2 million as at 30 June. However, I do want to highlight that we received a further $1.3 million in capital net of transaction costs post year-end as we closed out our capital raising activities in the July, August period. So in line with what we shared earlier, EBITDA loss has reduced materially. We're seeing early returns from our efforts to drive margin improvements and cost efficiency, which is translating into better cash flow outcomes there. So in summary, our balance sheet margin -- our balance sheet remains in a solid position. Cash is stable, no debt, losses are narrowing, and we're entering the next period with stronger financial footing and clearer momentum. So now turning to the cash flow. For the period, our cash receipts were slightly below our cash payments, reflecting a controlled use of our cash as we continue to invest in key areas of the business. While this resulted in a net cash outflow, it is important to note that the variance was within our expectations and aligned with our budget and operating plan for that period. On the receipt side, total cash inflow was $8.7 million, while on the payment side, our cash totaled $9.1 million. So overall, we have been very deliberate in our cost management, and we're seeing the impact of that discipline in reducing our EBITDA loss as previously discussed. So while the net cash was an outflow, we remain in a stable financial position, supported by the capital raising during the period and the additional funding we received of the $1.3 million cash net of transaction costs. So this gives us a clear runway to continue executing on our strategy with confidence. I'd now like to just take a moment and walk through the key trends supporting our company's -- shaping our company's performance and progress. Over the last several years, we've seen consistent and sustained revenue. This trajectory reflects a strong market demand, deepening customer engagement across POC, HIV sales test, OEM technology and broadening development revenue. At the same time, we've delivered improvements in margin. Margin expansion remains a core priority as we scale and the positive trend that we're seeing gives us the confidence in the long-term economics of the business. So importantly, our revenue portfolio has also diversified, as you can see on the graph to the left. We're now seeing strong contribution across 3 key revenue streams. So HIV sales, this has been primarily driven by our expanding Australia domestic market, which did grow 60% year-on-year and looks to continue to grow. OEM sales, which look to significantly grow as well in the coming period as one of our key customers, Lumos has secured a very significant contract with PHASE Scientific for the Pascal housed FebriDx test. And we provided the market with some estimates on the potential impact for Atomo Pascal revenue moving forward from recent Atomo announcements. And our third stream, we expect opportunities from expanding our portfolio and technology platforms such as Active Syphilis and Florey platform, which John will go through in further detail throughout the presentation. So this diversification reduces risk, enhances our resilience and positions us well for sustainable growth across multiple fronts. So in parallel to this, we've undertaken a comprehensive overhaul of our operating expenses over the recent financial periods, as shown on the graph to the right. We worked hard to moderate our costs and reshape the business into a leaner, more efficient organization, all without compromising our ability to capture revenue opportunities. So what we're seeing now is a business that is growing stronger, more balanced and more focused and with improving financial profile and a clear momentum towards growing -- towards breakeven. So on that note, I'd like to pass back on to John just to go through in more detail on our products and platform offerings.

Thank you, Suzy. Appreciate that. Hopefully, that gives you a sense of not only where the finances are for FY '25, but also where we're trending in terms of our finances moving forward. And I'd like to take an opportunity now to talk about the core assets that are driving that future business growth. Obviously, HIV self-test was the first and flagship product that we brought to market. It's a leading test in a number of key markets. And we've, as Suzy mentioned, prioritized markets over the last 2 years where we see better margins, and that reflects a transition over time away from reliance on global health volume where margins are tighter. We have been particularly successful in launching into the Australian market. We helped develop the market here. We're not only seeing growth in both the pharmacy retail channels as well as in public health funded channels. We were instrumental in the setting up of pilot programs that have now been scaled up nationally, utilizing our existing back-end e-commerce infrastructure and that e-commerce infrastructure has now been used to support the NAPWHA at-home mail program, where we supply tests direct to end users' homes discretely, and those tests are free to the user paid for by the Australian federal government as part of their HIV global HIV diagnostics budget. In addition to the mail home program, we worked with a number of partners, particularly SAMESH in South Australia initially to prove the concept of vending machine access for tests in high throughput areas where young people congregate, universities, that's been expanded to a number of other venues. That program has proven particularly successful in reaching people who haven't been testing regularly or in many cases, never tested before. And that is a key group that the government is trying to access with testing services and that program has also been funded by the government for national scale up when we announced large orders through the period for both the NAPWHA and vending machine programs. And we do expect to see both those programs continue to scale over the coming period. We're working with our partners, particularly Newfoundland Diagnostics in the U.K. to try to see if we can help them replicate that public health momentum in the National Health Service. They have started that engagement this year, but their primary focus was and remains pharmacy retail. They've been very successful in getting us onto the shelves in Tesco's and Boots, 2 of the leading U.K. retailers in that market. And it's interesting to note that let alone Boots, certainly, Tesco's were not selling HIV self-tests before the COVID pandemic. So there's been a clear transition to this acceptability of home-based diagnostics as mainstream retail channels. And that's one that we think we can continue to leverage off, not only with HIV, but with syphilis and other tests over the coming years. Outside of the U.K., we're looking to expand our distributor network, particularly into Europe and other markets like Southeast Asia and South America, where we feel we can further optimize the distribution infrastructure that we can bring to bear and having Syphilis coming in behind HIV, I think, gives potential distribution partners some excitement around the portfolio that we can provide to them. So we do continue to see long-term growth in the HIV self-test business. And we're also -- it's probably worth noting looking at opportunities to put a Gen 4 HIV test onto Pascal with a view to really entering that professional use market, particularly with the management of PrEP in facilities-based treatment programs. We had some early discussions with a strip provider that has some interest in that area. So I think HIV remains for us a core driver of long-term growth in the business and underpins the journey that we're on. We've seen success in Europe. We've seen obviously some retraction in LMIC global health markets as a result of changes in U.S. federal government policy around global health support. As Suzy noted, that was the least profitable part of our business, and we have, for a number of years, been focused on growing HIV revenues outside of global health to offset any decline in revenues in that channel. Europe still has significant potential for us. And in the Australia and New Zealand market, we're the market -- clear market leader, and we'll note that during the year, we also successfully launched New Zealand through Chemist Warehouse. We'll turn now to Active Syphilis. We're very excited about this opportunity, not only because it fits very nicely into our existing HIV channels for both public and consumer health supply. But because the test itself that we've developed in partnership with the Burnet Institute is incredibly novel in terms of not only its ability to be both a professional and self-test offering, but also because of the Active Syphilis component. With most -- or actually with all existing rapid syphilis tests on the market, they are traditionally antibody tests. That means that they will be reactive for someone that has syphilis, but they will also be reactive for someone that's had syphilis in the past and been successfully treated. And that is a very significant clinical limitation in the use of rapid tests in a point-of-care setting, particularly for test and treat programs. And the reason for that is that as the amount of people that have had syphilis previously increases, the amount of people that are being incorrectly diagnosed as positive and sent through for expensive confirmatory processes becomes less and less efficient. And we've heard cases of 75% to 80% of people being sent forward from screening programs actually being incorrectly diagnosed as syphilis active patients, but really being patients who've had syphilis previously. That makes test-and-treat programs for rapid testing almost useless in certain high-risk cohorts where previous infections are quite common. Syphilis rates more broadly are increasing globally, and we feel that a test that can actively distinguish between current infection and prior treated infection is a game changer, particularly on the Atomo Pascal device given its proven ability to be used in CLIA waive and at-home settings. The test exceeds the World Health target product profile for Active Syphilis detection. We believe it's the first test to actually meet, let alone exceed those requirements. We're very excited about the opportunity globally for this test and the latest performance that we'll talk about in a second really underpins what we think the value of that opportunity is. Syphilis is a very -- it's an emerging problem. Rates in the U.S. have nearly doubled over the last 5 years. Rates in Australia have more than doubled in the last 10 years. It is becoming an emerging public health crisis, and we're now starting to see a lot more focus by government. And I think that maybe reflects why Atomo was successful with the grant to develop this test, but we're also seeing significant interest from global health providers around the access to a test that can be used to test and treat in a single visit accurately. We have done a lot of development this year. We've worked with Burnet to do some initial clinical validation. The performance has been -- it's -- I'd say met, it's actually, in some ways, exceeded our expectations, particularly in terms of what we think we can get regards claim specificity. So in terms of the performance of the test, if we compare it to the market leaders, we have less blood volume needed, which makes it more suitable for self-test users. It's on the Pascal platform, which we know add significant user preference compared to multicomponent kit formats as well as obviously reducing errors and providing much better repeatability with untrained users. So it makes it ideal for CLIA waiver applications as well as at-home applications, and that's a real competitive advantage these other tests are not approved for self-test use. We think the Pascal Active Syphilis test certainly can meet that standard. We have competitive levels of sensitivity, that being the ability to detect Active Syphilis patients in screening. But really where we add additional clinical benefit is our ability to distinguish between people who have syphilis and active infection versus people who've had a prior infection treated but still have antibodies to syphilis. And it's that ability to distinguish between active versus prior treated that really gives this test its compelling market advantage and clinical benefits because you'll see from the specificity results of the other tests that they are essentially unable to distinguish between those 2 groups. They will call all of those patients positive. They will send them all through for further testing or they will be put on treatment erroneously. The Atomo test has much better levels of ability to distinguish between the 2. And the encouraging feedback is that in our engagement, some extensive engagement we've had over the last couple of months with clinicians, both in Australia and in the U.S. That is a very material clinical benefit. That is something that will make this test a preferred test in point-of-care testing programs, we believe, added to the fact that it can be delivered to the end user in the Pascal format. We believe that the opportunity for this test is very, very significant in a market where syphilis is becoming increasingly problematic for global health players as well as public health markets in high-value settings like Australia, like the U.K., like the U.S. So we're very excited about the opportunities. We will be now engaging with the TGA, BSI in Europe and the U.S. by way of a pre-sub to finalize our clinical endpoints to then validate in a clinical study, and we'll be looking to get that product to market as a priority in Australia and Europe, and we'll be looking for a U.S. partner to help with the U.S. go-to-market commercialization as well. We'll stay -- we'll obviously keep the market informed, but we're very excited about the opportunity this product gives to us as a product and also as part of a sexual health portfolio alongside HIV. I'll then talk about the OEM technology. I think Suzy made a point that our OEM technology revenues for FY '25 were broadly similar to FY '24. I think that reflects the fact that the recent agreement with -- that Lumos has in place with PHASE Scientific has really yet, at least from an FY '25 perspective, impact the business. We're going to see that now coming into FY '26. We've already disclosed an initial order from them. We expect to see a significant ramp-up over the next couple of years on the basis that CLIA waiver is secured for FebriDx, and we're very proud of the performance that the Atomo Pascal device has delivered in enabling that CLIA waiver submission to go in with a high level of confidence. Greater than 99% concordance between trained and untrained users on the Pascal device is, in my opinion, market-leading performance for a blood-based test in a low trained clinical setting. And I think that is going to be material for the uptake of FebriDx in the market. And I think more broadly, beyond FebriDx, will position Atomo and its Pascal platform as the gold standard solution in the U.S. CLIA waive blood test market. And that's a journey that we've been on for a while. And I think this CLIA waiver performance for FebriDx takes us a further step towards that goal. So we do expect to see significant demand for Pascal in the near-term through FebriDx and the PHASE agreement, but over the medium term, more broadly as Pascal gets acknowledged as being the gold standard solution for blood testing in clinical settings, pharmacy settings, decentralized settings and ultimately, in the home where the test was designed to be used. We're very proud of the performance that we've delivered. It's now increasingly recognized by clinicians and regulators as delivering precision and repeatability that just isn't available with standard multicomponent kits. And I think we've done a really good job of getting that product to market as a platform, and now we're starting to see the demand build up as the performance is validated and the benefits of getting CLIA waiver increasingly clear to diagnostic partners. I think Lumos announced that, that was a potential more than 10x increase in addressable market with CLIA waiver. I think that's the kind of market growth benefits that this platform can provide, and we think the demand for this platform is going to be substantial. That's really based off best-in-class usability. We reduced blood delivery errors down by more than 90%. We reduced buffer delivery errors almost completely. The steps of use are interlocked so that they can't happen in the wrong sequence. And the time to do the test has been reduced because the steps are more straightforward. And importantly, the end user is not second guessing whether they've done the steps correctly and they've got the right result. And that's been proven now in a validated third-party study for CLIA waiver with FebriDx, greater than 99% concordance. And I think that's an amazing level of performance that we're very proud of, and we think it really does support now a significant level of growth for Pascal as a platform and supply not just to Lumos for FebriDx, but we believe over time, a large number of clinical applications on the platform. I'm going to talk a little bit about Florey and why we developed it. Pascal, as I've, I think, made clear over the last couple of minutes, an excellent performing device. It's perfect for companies like Lumos that are developing a new test and bringing it to market. And we provide a cassette that supports their clinical approvals, a dossier that supports their regulatory activities. But because it is the device that the test sits in, it becomes the device that gets regulatory approval. And while that's not a problem for a new test, it means that for existing tests in market to move to Pascal requires a partner to go back and do some revalidation and some clinical work to get a reapproved version of their product on the Pascal cassette. And that turned out, particularly with bigger companies that were already in market at scale, that turned out to be a barrier to adoption even though they really like the usability that Pascal delivered. So what we've done over the last year is really think how can we deliver Pascal-type usability but minimize the operational and regulatory overheads that come with moving to an Atomo solution. And we've come up with Florey, which essentially takes the blood collection and delivery and the buffer delivery from Pascal and optimizes it to be compatible with a standard cassette. Essentially, the standard cassette clips into our device. We deliver the blood, we deliver the buffer. The cassette can be read as is or it can be taken out and put into a desktop reader in a clinic if it needs to be read digitally for traceability, for quantification, for reimbursement purposes. So what we really have done, we believe, with this solution is give the market a significant improvement in precision and usability, but to do it in a way where the standard cassette remains unchanged, the cassette in the reader remains unchanged, and therefore, our device is essentially an accessory, a usability accessory rather than the finished test. And that significantly reduces, we believe, the clinical and regulatory burden to move on to Atomo Pascal functionality and the initial reviews that we've had from some experts in regulatory affairs suggest that's the case. And certainly, the feedback we got from the market when we went to ADLM last month was hugely encouraging. I think people see that it does deliver benefits but removes the barriers, and I'm very excited about the opportunity of this product over the longer-term because it can be retrospectively added into an existing product supply chain as an accessory, we believe, with minimal disruption and cost and effort for the partner company that wants to upgrade the usability. And what we'll be looking to do is prove usability between Pascal and Florey so that, that equivalency allows us to then leverage off the work we've done with Pascal, and we think there's a significant market opportunity for this cassette. We'll be looking to tool it up and go into pilot manufacturing. We are confident that there are customers for this application. We'll keep investors aware of developments as they progress and disclosure becomes appropriate. We also have the Curie swab device, which delivers a similar level of usability and functional improvement. But for swab testing, that is still a platform that we think has enormous opportunity longer-term. We are waiting for a customer to come along and help pay for the validation of that, and we'll advise as and when that customer is secured. But we do think that both swab and blood testing applications can be improved enormously with Atomo technology, brought to bear. So in terms of summary, we have a number of assets that are either in market and about to scale revenue or coming to market with very significant addressable markets, and we believe some quite unique functionality that will allow us to be successful in those markets. In terms of investment highlights, we have a number of technologies that we think are proprietary. They're patented, they're proven. We think the investment opportunity now in Atomo is significant as we move into FY '26. We have very unique functionality now proven. And it's not just functionality for the sake of it, it's functionality that really impacts real-world performance. And I think the study results from the CLIA FebriDx prove that, greater than 99%. That's unmatched levels of performance that we can now point to in any commercial discussions with partners for other applications. The performance of Pascal underpins the fact that it's a very flexible platform, and we have a number of different tests validated on it. So certainly, FebriDx revenue is very material to Lumos. It's material to us as the supplier of Pascal into that test. But for us, that partnership with Lumos is limited to one narrow clinical application, and we believe that there's multiple applications that are suitable and will be coming to market on this platform as its bona fides get increasingly recognized in helping companies like Lumos deliver the kind of performance that Pascal has delivered in that study. We also have the ability to bring our own solutions forward in large addressable markets. We've done it with HIV. We proved we can do it. We prove we can compete with large multinationals on performance. We've validated a low-cost manufacturing facility that we run in South Africa that allows us to be cost competitive, even though we're not at scale. As we scale, we're going to see continued improvements in margins. And now with Pascal scaling up, we're very confident we can deliver improved margin improvements. We've gone from 39% to 51%. We think we can get into the high 50s with some volume, and that's across both the finished product and OEM businesses. We're focusing on sexual health for our own finished products. That's because we needed to pick an area where we could be -- we could have meaningful impact commercially. HIV then sits very nicely alongside syphilis. We have channels in both private sector and public sector markets for HIV that are ideally suited to introduce syphilis and would also be ideally suited to introduce a HIV Gen 4 as and when that product becomes closer to market. So we think sexual health is an area where we can be a leading player. It is an exciting market for us because it has both over-the-counter consumer demand as well as increasing public health demand for pharmacy, facility and at-home channels, and they're now publicly funded in the way they weren't before COVID. And we're really focused on tests that can tick both those boxes that can sell over-the-counter, but also have large bulk contracts from public health providers as well. With the OEM cassette device, obviously, Pascal, I think, has now proven itself as having enormous value to the market. We believe it's -- it's a journey towards becoming the gold standard for testing in CLIA waived and at-home markets, and that's a very valuable place to be. It's been a long journey to get there, and we'll talk a little bit, I think, now about what's taken some time. I think a new technology that's unproven is by its nature, risky to larger companies. And I think over time, we've been able to prove with our HIV performance where we put 18 batches into Europe without any being rejected by the regulator after being tested by the performance that we've delivered for FebriDx, the device and the solutions that we offer are now increasingly validated. And I think that makes it much easier for companies that are interested in usability to now look to partner with Atomo. And I think being able to also offer the Florey device that allows them to do that without large scale, expensive, time-consuming clinical and regulatory and operational impacts, further derisks that transition to Atomo usability. And I'm fully convinced that in the next 5 to 10 years, Atomo technology will be the benchmark for performance in blood-based and I hope also swab-based rapid diagnostics. I'd like to thank everyone for joining us today. That's the end of the presentation. We have had a number of questions that have come in. We will stop sharing the presentation, and we will then just take a few questions. We'll also have a look and see if any have come in during our presentation.

So the first question, it's -- the company seems to be getting ready to deliver. Why has it taken so long? Well, I think I've addressed that in some ways. New technology, particularly in health care is -- it's -- there's a lot of inertia in health care. There's a lot of risk aversion. So obviously, technologies need to be well proven before they will be accepted. That's been a bit of a journey. I think also in the early stages of Atomo, there was risk around whether Atomo would be around to supply, whether it could scale, whether it was a reliable partner over the longer-term. I think we've proven that we are here and our technology is scalable. And I think that has helped. We also did -- we launched our HIV test in Australia and Europe in 2019. Our partner, Lumos with FebriDx and NG Biotech with their blood precision pregnancy test. We're launching at the start of 2020. That's when COVID hit, the market and our partners pivoted into antigen-based COVID testing. Blood testing really took a back seat in both public health priorities as well as in our partners' go-to-market priorities. And it's really only since COVID that we've seen now Lumos starting to reengage the market, launch in the U.S., build that momentum. So there has been a bit of a delay because of COVID, but I think now we're starting to see with the success we're seeing in the HIV public funded growth as well as with FebriDx that there is significant opportunities for our solutions, and I think we have caught up to where we want to be. And I think the future for our technology is extremely encouraging. Another question was -- it says here, gross margins in the business have improved over the year. Is that going to continue? I'll let Suzy talk to that one.

Yes. Thanks, John. Well, in terms of gross margin, as we mentioned, we did see a significant improvement from prior year. We do expect to be able to sustain that margin in the coming period, and that really comes down to a couple of factors really. Firstly, the mix of HIV business revenue. As we mentioned, global health business has slowed down during the period. However, we have been able to continue growing HIV revenue in the Australia and Europe market, which delivers significantly better margins when compared to the global health. Secondly, OEM, I think for current margins, they are also reflective of the OEM business, which is also better than our HIV global health. And we expect margins for the OEM to improve as we scale further and further optimize our supply chain. And thirdly, really, our development and license fee revenue is quite profitable for the business as the revenue is based on patented technology and investment that we've already made into the business. So that keeps our costs quite low for that revenue stream.

Yes. Thanks, Suzy. We have another question that's come in online. What's happened with the pregnancy test that's not been mentioned in the last couple of webinars? NG still continue to buy Pascal cassettes for their blood pregnancy test. They sell it in France, a number of European markets and Brazil. We did submit to the TGA with their dossier. Their dossier has now subsequently gone through IVDR and passed. So the European regulator is happy with the clinical data that is available with that test. Without going into too many details, the TGA wanted to see additional clinical data. Some of that data, particularly early pregnancy validation is very difficult to secure in -- we're talking the difference between being positive in the blood-based test versus a urine test might be 3 or 4 days, finding somebody in a clinical study that's in that 3-day window is exceptionally challenging. So there's practicalities around how we do that. We are still very interested in the market here. We've had some discussions around what a clinical study, maybe trying to leverage IVF would be so that we've got more control on where people might be in their pregnancy cycle. So we haven't forgotten the test. I think we also didn't have the capital really to fund the clinical study in Australia if that was needed. Now that we've raised some capital, our options are a little better than they were. And as we continue to grow and see more revenue coming in from HIV, from syphilis from Pascal and Florey, then our ability to fund these other platform applications to market becomes a lot more viable. One other question was received earlier. Can you tell us more about the agreement with Lumos and Pascal revenues into that PHASE contract? Listen, we've made some disclosures around what we think the opportunity might mean for us. Clearly, it's material to us in terms of revenue to Lumos. We're not going to talk any more about the details between the 2 businesses in terms of agreement. That's company confidential. What I can say is that we're hugely proud of the performance that Pascal has delivered into that contract in terms of opening up CLIA waiver for them. They require Pascal for that product. That's -- it's clear that the performance has supported the approval. And we think that bodes really well, not only for supply of Pascal to FebriDx as they scale it. And we know they announced yesterday some funding from BARDA to expand the intended claims for CLIA waiver from down to 2 years of age. I'm much more likely to take my children to the doctor for respiratory infection than I would to take myself. So I think the expansion of applicability for that test down to 2 bodes very well for increased demand in the U.S. market. And I think that only further gives us pause for confidence that this will be a big volume supply agreement for us. But beyond that, I think the CLIA waiver opens up the opportunity for us to bring our own test to market, particularly syphilis, which is on Pascal as well as potentially the blood pregnancy test, which is on Pascal. And obviously, we're looking at other applications longer-term where we think CLIA waiver and home-based approval provides significant market opportunity. So that is my thoughts on that. We've not got any more questions in. So I'd like to take this opportunity to thank you for -- I suppose for your patience through the last couple of years, I feel like we've got to a position now where we really can start to drive growth in the core business being HIV and Pascal as well as bringing on complementary new solutions like syphilis, like Florey that leverage off our existing infrastructure, leverage off our existing IP, but expand the business such that we can now start to rely on multiple revenue channels and be less dependent on global health volumes, which got us a start in the business, but really were challenging from a revenue and margin perspective, and we think we're moving beyond those, which I think is helpful. I'd like to thank everyone for their time. We are very excited about the opportunities for FY '26, and we will certainly keep you in touch. We'd encourage you to use Investor Hub as a go-to center for all things Atomo, and we'll be certainly trying to improve our communication and visibility for investors over the coming year, and thank you for your time.

Thank you, everyone.