Good morning, everyone, and welcome to Atomo Diagnostics' FY 2024 results presentation. I'm John Kelly. I'm the Managing Director of Atomo Diagnostics.
I'm Suzy Elhlou, the Financial Controller at Atomo.
We're just gonna share the presentation that we put out to market, late last week. Hopefully, everyone can see that. So to start, Atomo is a developer and commercializer of innovative rapid test solutions, primarily for blood, but expanding into other sample types, and our solutions are increasingly recognized in a market that is open to and more aware of the opportunities that exist for home testing. Good. Opportunities that exist in the market in decentralized settings, including in the home. Our solutions remain unique in the market in terms of the level of reliability and usability that they give to untrained users in decentralized settings, and that usability performance has seen the company and the technology make progress over this year, including entry into the pharmacy retail market in the U.K.
The two biggest pharmacy retail channels being Boots and Tesco, and that reflects, I think, a broader expansion into consumer health globally, with Atomo entering into the German pharmacy market as well as here in Australia, in local market deployment through several hundred pharmacies, with plans to launch into New Zealand later this year. I think that decentralized transition from lab testing into consumer testing is a trend that will continue to accelerate post the COVID pandemic, and we'll talk a little bit about the landscape and how that's been helpful for us post-COVID.
We're also seeing on the OEM side of the business, our Pascal platform continued to be of interest to companies that wanna improve their usability in the market, and we note that our partner, Lumos, secured 510(k) approval for their FebriDx test on our platform in the U.S., and that was the last large market registration. We already have approvals for Pascal in Australia, in Europe and obviously in Canada, and the U.S. market now being the latest and largest of those markets that the platform now has an approval in, and we note that there is significant opportunity in the U.S. market for that platform. In terms of the landscape, I think what's changed is that COVID has now brought about a structural change in how rapid testing is considered by the market.
Clinicians, regulators, and consumers have all had experience with at-home testing through COVID, and there's now a much greater acceptance from public health that home testing can be a valuable and increasingly important part of healthcare delivery. And we now also have very high levels of user compliance with the idea that they can increasingly look to test at home. And that's obviously very favorable for Atomo, 'cause that's the part of the market where we've really focused our engineering and commercialization efforts. The global point-of-care market's growing, but the point of care, part of that market being at home, is growing faster than the rest of the market, and I think that speaks to that transition.
We're seeing products that weren't previously sold in pharmacy retail, like HIV self-testing, now becoming a standard category item, and we're seeing retailers starting to look at diagnostics as a growth area in their business. And certainly Boots and you know, Tesco's in particular, were not selling these types of products pre the COVID pandemic. Importantly, we're also seeing, I think, post the pandemic, an adoption of home testing as a key tool for public health. And we note the recent Australian government support for at-home HIV self-testing, that Atomo's obviously been a significant part of establishing. But that reflects a global trend, and one that we think will continue for not just HIV testing, but for infectious disease testing more broadly.
And that supports, I think, the fact that healthcare delivery is becoming increasingly expensive to provide through facilities. And that means a decentralization of services, which includes the decentralization of pathology services. And we'll see in a later slide how we're seeing significantly more growth in the point of care part of the market, and HIV self-testing is an example of that. The reason that we're interested and excited about that transition to home health is the fact that our technology was specifically developed to deliver improved levels of performance in those settings. Our integrated solution removes the need for accessories, which removes complexity. More importantly, it removes sources of error, and we have a device that's been designed specifically to deliver user performance in the hands of untrained users.
The validation of that by clinicians and regulators, we think, is now well established. We have had a number of independent evaluations show that the performance of our device relative to that standard blood test kit is transformative. Greater than 90% reduction in blood delivery errors, 100% reduction in buffer delivery errors, quicker to do the test, easier to do the test, and that all results in a greater than 90% user preference, which is of particular importance as we transition into consumer markets. That improvement of performance in terms of blood and buffer delivery are fundamental to the success of blood testing in decentralized settings, because they're the two major sources of error that account for problems with kits.
So we're very clear in our ability to show that we have addressed those, and we're very clear in our ability to show downstream retail partners that that really matters to consumers, and that user preference is important. Struggling to move to the next page. Oh, there we go. I'll hand over to Suzy for the financials.
Thanks, John. In looking at the results for the FY 2023-2024, in comparison to FY 2023 period, here we first have the profit and loss table for the comparative periods. So top line revenue, just shy of doubled from AUD 2.5 - 4 million to over AUD 4 million for the year. But also just to remind everyone, included in the FY 2023 revenue was also non-core revenue for COVID-19 tests. Once we allow for those sales and take that out, the normalized top line revenue increased by 90% year-on-year, with normalized gross margin improving from 37% to 39%. And that's been driven by continued growth in our HIV global business, particularly in developed markets, yielding better margin. So the quality of revenue has improved year-on-year.
We continue to see growing demand in our core business for HIV tests, as well as our technology platforms. There's been a significant rejuvenation of our OEM business in the post-COVID-19 market, as well as our key partners come back to their core business as well, and we're expecting to see continued improvement as they roll out their products globally. In terms of our business cost, we took out over AUD 1 million OpEx in FY 2023, and as a result of those cost reduction strategies implemented over the past 24 months, a further AUD 1.6 million OpEx for FY 2024 reduced. That brings business costs down over the past two years by approximately 30%, while still being able to increase revenue quite significantly.
That's quite important as we look to continue to bring down those costs, but in a way that doesn't impact our ability to continue to accelerate revenue. Now, coming to the balance sheet table. We ended the year with over AUD 3.5 million cash in hand, with no debt. We continue to pursue strategies that will allow us to conserve cash and strategically allocate those resources to key priorities of the business in expanding the portfolio of the company, as well as our presence for approved products that are on the market. In moving to the cash flow activities for the year, we made nearly AUD 7 million cash receipts for the period. AUD 4 million of that was from product sales, which, as we mentioned, was significantly up from last year's revenue from improved HIV and OEM sales.
We also received AUD 750,000 from R&D rebate, as well as just over AUD 2 million from the net capital raised early in the financial year. CapEx expenses continue to be negligible, as we have that inbuilt capacity already completed in previous years, while OpEx continues to reduce. So overall, our monthly cash burn continues to moderate, with our cash burn coming down from over AUD 530,000 a month in FY 2023, to roughly about AUD 400,000 a month in FY 2024, and that's excluding the capital raise. That's an improvement of more than 25% and is really driven by the improved quality of revenue that's being generated, but also as a result of leveraging the inbuilt capacity to step up revenue without needing to invest more in the business infrastructure for CapEx, and while reducing our overhead operation costs.
As you can see from the FY 2024 results, we have increased revenue quite significantly while re-reducing business costs. If we take a look at that over a longer period, as seen on these two graphs, we continue to see an improvement in the underlying fundamentals of the business. That's supported by a reemergence of our core sales in both the HIV and our key OEM partners post-COVID, and at the same time being able to continuously reduce costs, and those two trends are really important in bringing us closer to breaking even, and ones that we'll continue to focus on going forward. I'll pass on that to John.
No, I'd just add, I think those that longer term, sort of two, three-year view shows the step-up obviously in revenue as we come out of that COVID period. We've been able to deliver that, as Suzy says, with a reducing OpEx footprint. So that gives the fundamentals of the business a better standing moving forward and one that we're continuing to focus on and prioritize. We're gonna talk a little bit about the technology solutions and the products that underpin the business, and then lead us into discussion on commercial strategy. We'll then talk to our short-term and long-term priorities that then come out of the back of that strategy. So in terms of the products, we're very proud of the technologies we've developed.
Blood testing was our first suite of solutions that we tried to deliver to market, and they still remain, I think, responsible for the majority of our revenue. We've been able to deliver a number of solutions to market that fully integrate the functionality and workflow of rapid testing, and we've been able to bring to bear a level of user interaction with the device that's intuitive, and that really has delivered high levels of performance and high levels of user satisfaction with the product, and that's what's gonna drive the success of the technology over the longer term. We were very aware of the fact that a lot of the market during COVID was swab-based, so we have pivoted our technology into a swab-formatted solution.
That has been established to a level of proof of concept, so we know it works, and we know that it does deliver a simplified workflow and improved signal strength in terms of the pre-mix delivered to a cassette. We're now looking to find the right test and the right test partner to bring that to market with. We don't wanna spend a lot of money to develop the device, because it cannot be commercialized on its own. It needs to be commercialized as an accessory for a test, and we're obviously looking to find that test partner to validate and commercialize the product with. But we do know that the performance is good, and we know that the usability is improved in line with our ethos of delivering integrated, user-friendly solutions to market.
And the successful launch of that device in the market would significantly increase, obviously, the addressable market that are totally compliant within rapid testing, with swabs being, you know, along with blood, the two main sample types of note in the market. We're continually reminded that moving forward, the market requires a level of digital functionality, particularly in point of care settings. Those are typically addressed through two technology formats in point of care healthcare settings, small desktop reader solutions, and increasingly in the home, the ability to look at some sort of app-based platform.
The reason that digitally read results are preferred by clinicians in point-of-care setting is not just down to the fact that they have a requirement for analytical quantitation in terms of assay performance, but also importance around location and date stamping for the purposes of reimbursement. That's of particular interest in U.S. markets, where reimbursement is key for adoption of tests and point-of-care formats. We've been working with a number of reader developers to make sure that their offerings are Pascal compatible, and we found that has been very helpful, particularly in discussions with potential U.S. partners, who are always very mindful of the need to be able to deliver reader-based solutions into point-of-care.
We have developed and patented some know-how around our own app for home use, and we believe that that app will provide significant benefit longer term in not only verifying results, but providing, again, data capture and traceability back into telehealth services, so that clinicians can start to have testing performed at home, but as part of a controlled, reimbursed healthcare system. This slide talks to the progress that's been made over the last couple of years with the technology. We see at the top of the list on the left-hand side, registrations that Atomo has delivered as the listed manufacturer. They are currently HIV related, although we have previously brought to market an antibody blood test that was used in the early phases of the COVID-19 pandemic, and that shows our ability to bring our own finished products to market.
We have the certification, the capabilities to do that, and we're looking at other tests where we can deliver that. Outside of those Atomo-listed manufacturer products, we continue to support a range of partners with their approvals, and we provide large parts of the dossier related to the device performance, and they obviously have the assay and go-to-market validation requirements on top of that. We have Lumos and NG. NG have a blood-based pregnancy test that they've launched in a number of markets globally. Likewise, Lumos have launched FebriDx in a number of markets, including, we know, most recently, 510(k) approval in the US, with some plans to move forward for CLIA waiver.
We are very excited that we have been able to get our HIV product launched globally, and equally excited that we have been able to support our partners in their efforts to get their products registered in key Tier One jurisdictions for the Pascal platform, which not only improves the markets that they can generate revenue in, but more importantly for us, I think, gives the Pascal platform significantly more commercial gravitas and more regulatory de-risking of partner discussions now that we can point to those approvals in key markets. And that then leads to our thoughts on commercial strategy. At the moment, the bulk of our revenue is generated by the sale of HIV self-test products.
We continue to see that being the bulk of the business, but we do, over time, believe that we will see an increase in platform adoption for Pascal, which will lead to a larger share of revenue from OEM partnerships, and that's important for us because the cost of supporting a dollar's revenue in OEM is less than finished product, because we're not directly responsible for the clinical and regulatory go-to-market costs on partner products, and that means that we can scale the revenue of the business without having to continue to invest significant amounts in go-to-market finished product investment, and I think that allows us to scale cost effectively, and we're expecting, you know, to really prioritize that, and we note that the approval of the platform in the U.S. really, you know, underpins a lot of that opportunity.
Outside of that, we're starting to see something that we hadn't seen previously, and that is paid development services business, where people come to us and ask for custom development work or solutions around proving their test can work on our platform, or in some cases, looking to adopt or adapt our platform solutions for other opportunities. And we'll talk at the end of the presentation around opportunities outside of lateral flow that we're excited about. We do see that development business growing as the platform gets more credibility, and we get more regulatory approvals, and we show more utility, particularly in our ability to win contracts going into channels like Tesco's and Boots. That's where a lot of diagnostic companies want to end up, and our platform has some proven credentials in helping them get there.
So we do see that development business, while being smaller than the two core finished product businesses, still starting to be more material for us. If we look at the OEM business in a little bit more detail, we've obviously commercialized both Pascal and Galileo. Pascal is our flagship OEM platform, and we will look to develop our own new tests primarily on that platform moving forward, now that it has secured regulatory approval around the world. Our first product to market was based on the Galileo platform, which is a simpler, lower cost platform, and that really supports our HIV business currently in global markets. Outside of that, we have a number of other platforms that do things slightly differently and add certain functionalities that are important to some customers, and we've taken those through to various stages of market readiness.
Curie, which is our swab platform, is now through its proof of concept phase and ready to find some commercial partners to go into clinical validation and build a dossier and look to support them in their regulatory approvals. Our OEM customers, obviously, Lumos, we've mentioned, with the FebriDx product, that's critically important to us, not just from short-term OEM revenue perspective, but also longer term. We see the U.S. market and the approval of Pascal in that market as being material to our future prospects. 510(k) has been cleared. CLIA waiver is the next target for Lumos, and Atomo is keen to move beyond that into OTC home use.
We've done that in other markets, and we feel that the current pathway for FebriDx in the US builds a platform for us to move into OTC for our own products over time. Outside of the Lumos agreement, we have a partnership with NG Biotech. They secured CE Mark for their blood-based pregnancy test just before COVID, and didn't really get around to launching that because of the COVID pandemic. They essentially went back to the relaunch of that after COVID, and the last eighteen months, they've launched in France, the U.K., Spain, Italy, Portugal, the United Arab Emirates, and Brazil. And we're starting to see some increased optimism, particularly that partnership they have with Tua Farmacêutica into Portugal, Italy and Spain.
We have, I think, come to understand that having any sizable partner to promote the adoption of blood testing in a market that's essentially urine-based is important. NG have been able to prove that with a pharmacy partner locked into that process, sales can be material, but without the right partner, sales can be challenging. Primarily based on the need to generate awareness on the opportunity to test with blood and the benefits of testing with blood and the marketing needed to support that. Outside of those two OEM contracts, we're starting to see obviously a range of pipeline engagements.
I've been over in the U.S. twice in the last three months to support discussions at various conferences, and we're starting to see a range of inbound interest from one large IVD company through to a lot of smaller development groups and university sort of spin-outs. We obviously are keen to partner with a broad range of partners, and we continue to support discussions that include technical engagement as well as the provision of some samples to support de-risking of their decision to move forward on the platform. That is something that we're very focused on. We're very excited about the opportunity to partner with the Burnet Diagnostics Initiative, which is a group attached to Burnet Institute in Melbourne, and they've developed a number of test assays and optimized them on Pascal, and we're in discussions with them.
We'll talk a little bit about the commercial opportunities in the presentation, but the most progressed is an ALT biomarker that is a surrogate for liver function. We've received an initial order for a batch of product that we're starting to manufacture now. We'll deliver that in Q2, and that supports a clinical trial. The idea there being that home-based testing of liver function allows for clinical trials to proceed with less risk and with better oversight of the trial process. But we are mindful that ALT liver function can be used for a whole range of applications, and we're excited about the prospects of that over the longer term. In terms of finished tests, obviously, HIV is our core, our core product. The HIV market, as you can see, is expected to grow at an annual compound interest of 8%.
But interestingly, the self-test market is expected to grow at a significantly higher rate of market adoption. And that, I think, reflects the fact that there's a shifting of diagnostics away from labs towards the patient. And that means that the point-of-care market is growing faster than the lab market. It's essentially taking market share off labs, and within that point-of-care market, self-testing is the segment that's growing most. And we're very excited about that because that's where we are in terms of performance. We believe the market leader on the device side, and we're looking to find the right partners to help that scale. The evidence of that is entering into markets that we weren't in a couple of years ago.
Obviously, Tesco and Boots in the UK, a large pharmacy chain in Germany, and we've successfully entered the market in Australia. We're in several hundred pharmacies, and that part of the business is growing strongly. In addition to that, and I think over the medium term, perhaps more important, is the adoption now post-COVID of public health procurement for at-home testing. That wasn't happening before the pandemic, and we now see in Australia, as well as other countries, significant interest from public health procurement on the purchasing and deployment of free at-home tests. And we're expecting to see sizable growth in our HIV business here in Australia off the back of that government funding. But that talks, I think, to the opportunity that exists for us more broadly, to become a key provider of self-testing into that growing public health market.
In terms of the channels we're looking to take to market for HIV, obviously, in Australia, we sell directly. We are the only registered approved supplier of HIV self-tests in Australia, and we're looking to utilize that to continue to partner with government in public health programs, both the NAPWHA At Home program as well as the scaled-up vending machine programs that are being run across various states. In the most recent one, being the announcement of a large program with New South Wales Health. We're utilizing our TGA approval to facilitate market entry into New Zealand, and we've been working for the last couple of months on securing a partner to help with the import as well as a distribution partner in pharmacy.
And we've had a lot of interest in New Zealand based on the success we've been able to show for product adoption in pharmacies in Australia... Within global health, we note that Viatris have provided some significant orders during calendar year 2024, and we're excited to see them now start to generate business in some of those global tenders. And in Europe, obviously, our partner, Newfoundland, has procured a significant amount of tests to support the launch of their products across pharmacy retail agreements in the U.K. and Germany, being the primary two, but they are active in the Netherlands. They're looking to launch into Eastern Europe, and we're supporting them with an East European variant that we expect to see approval for in the coming months. So that's an exciting part of the business.
All of those segments are growing over time, and we expect to see that growth continue as public health continues to adopt self-test policy. Beyond HIV, we're very excited about the partnership with Burnet Diagnostics. The two tests that they've optimized on our platform, a test for active syphilis and the liver function test that I spoke to earlier. With regard to syphilis, it's an increasingly big problem for global health, in part, because of the adoption of PrEP for HIV management. There's less condom usage in key markets, which drives other growth, STIs, and syphilis is an example of that.
It's becoming increasingly important within public health, not just in Australia, but globally and in the U.S., and we feel that syphilis is a really well-aligned opportunity for us as a leader in HIV testing, but also one that has significant commercial attraction because it has an at-home pharmacy self-test opportunity, similar to HIV, but also expectations around support from public health. The reason we're very excited to partner with Burnet on their syphilis test is the uniqueness, not just of the assay, but the uniqueness of delivering it in the Atomo platform to market. Current rapid syphilis tests on the market essentially detect antibodies for syphilis, and those antibodies are present when you have active syphilis, but those antibodies are also present if you've had and been treated for active syphilis in the last 12-18 months, sometimes longer.
And that means that although they're very sensitive to detecting active syphilis, they're not very specific at being able to detect active syphilis versus prior syphilis, which means you don't get a diagnosis of syphilis off a screening test. You simply get referred through for confirmatory testing to see whether you have syphilis or not, and that typically takes, you know, anywhere from two to five days. People are waiting to find out if they have a serious and stressful medical condition. And we believe a test that can actively screen out for non-syphilis versus prior syphilis is extremely useful. It allows for test and treat in a single visit, and it would be a unique solution to market.
We're in the process of working with Burnet now to work on an agreement to support commercialization of that, and we're very excited about the opportunities that that brings. We've had some interest from partners around the world on what that test might mean. Outside of syphilis, we have supported them on the development and optimization of their liver function test, which is being targeted initially at supported clinical trials, although I did note earlier that there are a large range of clinical areas where liver function is important, outside of drug testing, and that is a number of chronic conditions, including potentially HCV, Hepatitis C. So we're excited about, again, you know, the utility of that test over the longer term, and we see the partnership with Burnet being an important stepping stone to bringing new products to market.
We continue to focus outside of sexual health and women's health. We note that the TGA made a decision earlier this year not to register the blood-based pregnancy test from NG on the ARTG. We tried to sponsor that based off NG's existing product dossier, which we do know was deemed acceptable to support registration in a number of other markets. However, regulators have their own requirements, and we're now working with NG to assess a plan, timing, cost, and feasibility to provide back to TGA the additional clinical data that they were looking for that wasn't part of the current dossier that NG has, so that's ongoing, and we'll be looking to update the market in due course once we come to a final position on that.
Outside of blood pregnancy, we've previously stated an interest in iron deficiency testing, anemia, being the biggest subset of patients in that cohort. It's not only women that have a problem with iron deficiency, but they do represent a very sizable portion of sufferers, particularly pregnant women and young adolescent women. We have done proof of concept work with a partner. We found a strip that works well on Pascal. We've done the verification work, and all that remains now to bring that to market is completion of a clinical trial on the platform, and then completion of the dossier and submission.
So there is some work to go there, but we do see high, high likelihood of being able to execute on that from a performance perspective, and we do note that our partners around the world indicate anemia as one of the major areas of interest that they have commercially. So in terms of kind of where we are and where we're focusing our efforts moving forward, as Susie mentioned in the financial section, we're looking to leverage the existing infrastructure that we have around the technologies we developed and the integrated solutions that we've brought to market, as well as the certifications we have to make scaled-up production for cassettes and finished product.
Our short-term pathway focuses on supporting market entry in the US, so supporting, obviously, Lumos and their clear activities, as well as starting to establish go-to-market pathways for Atomo products, and we note that both HIV and syphilis are of significant need in terms of public health in the US, as well as offering commercial retail opportunities as well. To support that, on the syphilis side, we're looking obviously to complete our arrangements with Burnet and move forward with commercialization of their assays on the Atomo Pascal platform. We're continuing to focus on the management of OpEx and continuing to reduce our expenditure as a business, and we see that being good management moving forward.
And obviously, looking to expand on the OEM customer base that we have for Pascal, and we're confident off the back of the 510(k) approval in the U.S., that will be forthcoming. Over the medium, longer term, obviously, looking to establish some development partnerships that provide meaningful development fee services revenue to the business, and we believe that that's a medium-term opportunity that can be delivered. Ultimately, our key goal over the medium term is to get product approvals for our own products in the U.S., and both HIV and syphilis are two, you know, leading candidates for that process. And then beyond that, I think we're starting to see, particularly at the conferences, that a lot of the new technologies coming through for point-of-care are moving beyond lateral flow into rapid molecular and microfluidic solutions.
Those technologies have benefits that lateral flow don't have around limits of detection and ability to quantitate. We do know that Atomo's IP wraps around lateral flow but is not limited to lateral flow, and we are equally interested in the molecular microfluidic markets longer term. We also note that although those solutions offer improvements in diagnostic performance, the cassettes that deliver those tests still suffer from the same blood buffer sample workflow challenges that lateral flow has, and there are still challenges that will stop some of these technologies getting CLIA waiver and certainly OTC home approval. That's where Atomo's solutions offer, we think, significant benefit, the same way we've proven in lateral flow that we can offer benefits. The conversations now are around how we can adapt our solutions to fit the needs of molecular and microfluidic cassettes.
So we still deliver, in this scenario, the upfront usability portion, but we adapt the delivery to not have a strip on board, but to be interoperable with the types of cassettes that molecular and microfluidic technology develop. We have a number of early developments there, but exciting ones because those are the tech, the products of the future that are gonna drive growth over the longer term. I'd like to thank everyone for taking time to join us today and for continued support. Hopefully, you'll see that the performance for the year is an improvement on FY 2023 in terms of revenue. Also, that the company is very focused on reducing its OpEx and being responsible about its cash burn.
But most importantly, that the HIV business is growing strongly, the OEM opportunities are growing, and the long-term opportunity to repurpose our technology for next-generation diagnostic platforms is material and exciting, and one that we think we can execute on over time. So thank you all for your time. I appreciate it. Oh, yeah, sorry, just wanted to say before we leave, we had a couple of questions come in. We've tried to address them in the presentation, through the disclosure that we put out on the presentation. But if there are any additional questions that people feel they wanna ask, please feel free to contact us, and we'll get around to addressing them in our next presentation to market. Thank you.