The Lumos Diagnostics (ASX:LDX) share price is soaring another 8% today. Here’s why

a group of young people dance together with their hands in the air, moving to music.a group of young people dance together with their hands in the air, moving to music.a group of young people dance together with their hands in the air, moving to music.

Key points

  • The Lumos Diagnostics share price is up 8% today, and 22% in the last 3 days
  • RAT supply shortages soon coming to an end
  • Victorian government’s investment in Lumos Diagnostics has excited investors

The Lumos Diagnostics Holdings Ltd (ASX: LDX) share price is again on the move today. This comes after news broke that rapid antigen test (RAT) shortages have started to ease over the past few days.

During afternoon trade, the medical diagnostics company’s shares are up 7.92% to $1.09 apiece, having earlier been as high as $1.26. This means that since the end of January — the close of trade on Monday — Lumos Diagnostics shares are up by more than 22%.

RAT supply concerns almost a thing in the past

Investors are pushing up the Lumos Diagnostics share price following the Federal Health Minister’s comments today regarding RATs.

According to an article published by news.com.au, Australia’s supply shortage of RATs could soon be at an end.

Health Minister Greg Hunt said he received a positive message from Chemist Warehouse boss Mario Verrocchi on Wednesday morning.

“The message from the CEO … was that they have very significant supplies,” Hunt said.

On January 24, the government launched a scheme to provide free RATs for pensioners and concession cardholders.

Around 3.1 million RATs have been handed out under the scheme, which is available to roughly 6 million Australians.

Chemist Warehouse, Australia’s largest pharmacy chain, revealed it has handed out two-thirds of free RATs to eligible users. This equates to about 2 million free RATs.

The news follows Lumos Diagnostics’ release yesterday in which it advised the Victorian government intends to support a diagnostics manufacturing facility and innovation hub.

The Andrews government plans to invest $17.2 million in Lumos Diagnostics to establish capability for manufacturing RATs in Victoria.

However, this is subject to the company meeting a number of requirements such as securing approval from the Australian Therapeutic Goods Administration (TGA) for its RATs.

Lumos Diagnostics believes if it is granted these rights, production can begin as early as the second quarter of 2022.

Once the facility is set up, up to 1 million RATs will be initially produced each year. This is expected to increase to up to 50 million RATs a year through the introduction of greater automation and expanding production lines.

Furthermore, the RATs can also be modified to be used for influenza, infectious diseases, reproductive health, and chronic disease management.

About the Lumos Diagnostics share price

Since being listed in July last year, the Lumos Diagnostics share price is down around 12%. However, with this week’s gains, it is up around 13% year to date.

Lumos Diagnostics has a market capitalisation of about $152 million.

The post The Lumos Diagnostics (ASX:LDX) share price is soaring another 8% today. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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