Good afternoon. My name is John Kelly. I'm the CEO and Managing Director of Atomo Diagnostics, and I'd like to welcome everyone here today to our Q 2 FY25 Quarterly Report webinar. I'm just going to share today's announcement with you so we can go through it, and then we'll take some questions. In terms of highlights for the quarter, we announced that we had received a substantial order for the supply of HIV self-testing to Australia. That's through a government-funded channel, and that was approximately AUD 440,000 worth of product into the Australian market at attractive revenues. We also had announced in Quarter 1 that we had been awarded an Australian Government CRC-P grant, and we announced that in this quarter we had executed that grant arrangement with the Commonwealth and had received the first payment and commenced project activities.
That is the culmination of a number of months of work in advance of receiving that grant with ourselves and Burnet to get a working assay proof of concept program onto our platform. We'll talk a little bit more about that program and why we're excited about that product. In terms of revenue for the quarter, we have announced AUD 1.2 million worth of revenue unaudited for the Quarter 2, and that brings H1 revenue for the half-year to approximately AUD 2.1 million in revenue. Cash receipts for the Quarter 2 were AUD 1.7 million, and on top of that, we received a further approximately AUD 3.25 million from the R&D ATO rebate, as well as that first payment from CRCP, which was just under AUD 500,000. Let's talk a little bit more about the HIV business in some detail.
We are continuing to see growth in our HIV business, particularly in Australia, where we do enjoy good margins as we supply a lot of the market, both public and private channels directly. We received from the NAPWHA-run program an order for a substantial amount of product, and that really is a step up in demand through that channel. That's really resulted from funding from the Federal Government through the May budget for an expansion of HIV self-test services in Australia, and for the first time, the procurement of HIV self-test for public health deployment. We're the only approved test on the ARTG, so we've been able to take advantage of that momentum, and we're part of the community groups and key stakeholders who really demonstrated the effectiveness of self-testing in the community.
That NAPWHA run program, HIVtest.au, is proving very effective at reaching people that need to test and also giving tests to people that find costs through pharmacy channels a barrier to testing. And that's funded by the Federal Government, supported by Grindr through targeted promotion, and has been a very successful program. And we're very excited to be part of that and expect to see ongoing demand through that channel. In addition to public health at-home mail programs, we've also continued to expand our pharmacy retail business. We brought just over 40 pharmacies on to the network over the quarter, and that now has us in major metropolitan and urban pharmacies across the country.
And we've also made very substantial progress in lining up the launch of the product into one of the main pharmacy channels in New Zealand, and we expect that launch to occur in April and May this year. Outside of those two channels, we are also seeing the commencement now of the demand through the vending machine programs. Vending machine, you may recall, were the second channel that the Federal Government wanted to scale up through its self-test program, and we had worked with SAMHSA and others to pilot those programs over the last couple of years, and they've now started to scale. There has been a bit of a lead time to get the extra vending machines manufactured and installed.
We're now starting to see them come through, and we're also expecting a significant step up in demand through the rest of this year and into 2026 as that vending machine program goes national, and we'll obviously announce further that progress as it occurs. Outside of Australia, we have, just after the period finished, announced a restructuring of our long-term partnership with Newfoundland Diagnostics, who are a U.K.-based company that supply not only in the U.K. but in a range of markets across Europe, and more recently, we give them rights also for Colombia. They've been very successful in the COVID period and beyond in making self-testing a standard category item in pharmacy retail in the U.K. in particular, and they have our product now arranged under their brand in Boots pharmacies as well as Tesco Supermarkets.
And they are the two biggest pharmacy retail channels in the U.K., and we're very excited to be in there as a partner with them and showcasing our products through those major retail channels. This agreement with them essentially gets us into those channels over the longer period. It's an agreement that runs for five years and is worth on the contract minimums just over AUD 5 million of business to us. We have a good relationship with Newfoundland.
We see them as a very dynamic partner in this space, and I'll be heading back over to the U.K. in February to have some discussions around how we can support them in scaling that channel, as well as also talking to them about the success we've had with public health procurement in Australia and seeing how we can help them use that as a case study to access the emerging opportunity they're seeing in the U.K. through the National Health Service. Again, as public health continues to adopt and promote self-test, use as a really cost-effective way to reach people in the community.
We'll also be talking to them about opportunities for other tests that they may be able to arrange for us through these channels that we're bringing to market or our partners are bringing to market, as well as opportunities in the U.S. where they've recently established a business and start to now push into that U.S. market as well, so that's a very valuable partnership for us and shows, I think, what we can do when we get the products into the hands of the right type of partners. If we move on now to Syphilis, which is the next finished test that we're looking to focus into that channel, we think it sits very nicely with HIV in terms of a sexual health portfolio.
Also, we have a significant overlap of people who test for HIV also needing to potentially test for syphilis, and that means that the tests sit well together in the portfolio and also offer themselves up as a combo test, two tests in the one box as well. We have now received the first payment of a grant from the Australian Government for the development of that test in partnership with the Burnet Institute and our long-term manufacturing partner, IDE Group, here in Sydney. We are actively progressing that program, and we'll be looking to close out our arrangements with Burnet and IDE to support the completion of that program. That program runs through 2025, and we'll continue to receive payments from the government through this year and into next year as we complete that work. We're excited about this test for a couple of reasons.
It's very novel, not just because it's on the Pascal platform, which means it can be deployed in professional settings and also in consumer self-test channels, but also because Burnet had developed an assay that's pretty unique. There's not that many rapid Syphilis tests on the market. The ones that are on the market typically have been commercialized by large U.S. diagnostics companies, and they're antibody-only tests. What that means is that they will detect Syphilis infection quite accurately, but they will also detect antibodies from prior Syphilis infection that's been treated, which means if you've had prior Syphilis infection, these tests are essentially ineffective. The assay that Burnet had developed in the lab and developed for proof of concept work on our Pascal platform has a different type of detection, and that makes it a lot more specific for active versus prior treated.
That's a very important clinical distinction because it allows more understanding of a positive result. It's not just positive for antibodies; it's positive for active infection versus prior infection and allows for a different diagnostic pathway to be delivered. It's also critically important, we think, for emerging markets where access to confirmatory lab testing is difficult or nonexistent, and a test that's much more specific for active Syphilis detection can be used for test- and- treat in a single clinical visit point of care, which is where these tests need to operate to be successful. That opens up not just global health channels, but emerging markets like South America and Southeast Asia, where rates of Syphilis are increasing very rapidly, as they are in Australia and the US. Over last year, more than eight million people diagnosed with Syphilis, many millions more not diagnosed.
It's a very rapidly increasing public health issue, and I think being to market potentially with the first rapid test that can be specific for active Syphilis would be a very significant commercial milestone for the business. We're very excited about that. We also, through our partnership with Burnet, have delivered in the last quarter about 20,000 Pascal devices to be used for an ALT test they've developed, which really monitors liver function, and that test has been deployed in a clinical trial by a large multinational pharmaceutical company so that people on that trial can test at home to make sure there's no liver toxicity impact from that drug trial.
While that drug trial sort of efficacy market is valuable and one that both Atomo and Burnet are excited about, we do recognize that liver function is a very broad category of biomarker and applies to a lot of other potential conditions: hepatitis C infection, alcohol-related liver damage. So we're looking at what other types of applications this type of easy-to-use, rapid liver monitoring test might deploy in the field, and we'll keep certainly the market abreast of any developments in that area. Outside of those tests and outside of the progress we've made with Pascal, we are also now looking at how we can redeploy our existing IP and know-how into adjacent markets close to the markets that we're currently in.
One of the areas that we're very excited about is the idea of a Pascal-style device that delivered Pascal-type functionality around accurate blood collection, blood delivery, onboard buffer reagent delivery to a test, but one that was compatible with existing tests that are in the market, and we've been working to repurpose our technology to develop a solution that essentially does that, and we've disclosed that in this quarterly, so we can now start to talk to the market and potential customers more openly. Essentially, the difference between this Florey concept and Pascal is that, unlike Pascal, which has the test actually in the device, Florey is more of an accessory that the standard cassette clips into.
So once you've clipped it into our device, you can deliver the blood, you can deliver the buffer, you can run the sort of Atomo usability bit that we do very well, but you don't have the test strip in the device, which means the device that we manufacture and supply is not a diagnostic product. Therefore, it has a much lower regulatory barrier for customers to adopt it and start to use it. And that means that we can target it now for tests that are in the market already approved at scale and offer those larger partners something that's more easily introduced into their supply chain and something that's also more easily introduced into their workflow because it has a lower regulatory barrier.
Also importantly, because the cassette can clip out of our device after the test has been run, it means that that standard cassette can then be clipped into a desktop reader, and that's, we think, a critically important feature because there are hundreds of thousands of desktop readers in the field around the world, particularly in the U.S., where desktop readers are used to provide a level of traceability to support reimbursement in point-of-care clinics, and when we've spoken to some of those larger companies in the past around the benefits of Pascal, one of the bits of feedback was that it would be very difficult for them to retrofit tens of thousands of readers in the machine to fit the physical cassette dimensions that we have in Pascal.
So being able to deliver Atomo-style usability at the front end but still have a cassette that can easily clip into a standard reader means that we are, in theory, compatible with all of those test applications in that large reader market, particularly in the U.S. CLIA- waiver markets. We're very, very excited about the opportunities that this product may afford to scale into those markets, so that would mean that Pascal is promoted in new test applications where people can develop their test on Pascal, and with us having a 510(k) for Pascal through our partnership with Lumos, we've proven that that's a viable way to get to market.
But for customers who already have a test in the market that have done the regulatory and clinical work that don't want to go back and revalidate all of that, this Florey concept gives them an Atomo usability solution with a much reduced burden for operational and clinical and regulatory revalidation. And we think that's a compelling offer. In addition to that, we've also been looking at the other things that Atomo does really well in terms of the solutions it delivers to market. One of the things we keep hearing from customers in the field with Galileo and Pascal is how easy our blood collection system on those cassettes is to use because we've some special design proprietary know-how. We've some special molding know-how. We've got some special process know-how that makes that really work fantastically well.
And what we've done with this concept is really take that blood collection unit and really just look to optimize the ergonomics so that it can be used as a standalone device. So it can be used essentially with a standard cassette. It takes blood off the finger. You touch it to the cassette, and it automatically drains into the cassette in a way that's more easy to use and more reliable than blow-molded pipettes and inverted cups that typically are used in normal bits-in-box kits. So this is a lower-cost but very high-volume market. It's one that we haven't looked at the market opportunity significantly at this stage, but we do know that that device in our Galileo and Pascal systems works very, very well. And we're excited to see what the commercial opportunity might look for this.
But in terms of prioritization, certainly the Florey concept that I described prior has a much bigger commercial opportunity for us. The important point to note is that we're not looking at spending large amounts of development funds to get these products kind of through proof of concept. They're utilizing existing IP. They're utilizing existing designs and proprietary processes that we already have. So it's a smart way for us to expand our solutions into adjacent markets at relatively low cost, and we'll certainly keep the market abreast of developments on those two product opportunities as they mature. If we go back to the financials and look at them in a little bit more detail, we announced AUD 1.2 million of revenue for the quarter. Again, HIV sales accounts for the lion's share of that revenue, and we're continuing to see momentum in that HIV business.
We've also got steady OEM sales to NG Biotech and Lumos in the quarter, and we expect to see that demand continue as well. Outside of that, there's a small amount of revenue coming in for development fees. While the development fees aren't material from a financial perspective, I think they're critically important for the business because that's companies paying for us to do development work so they can look at prototypes, look at product opportunities. And obviously, those small development fees may lead to larger product opportunities down track. So we are very focused on keeping that pipeline open and trying to develop fees while we can, but being mindful of the real goal being to bring those products through into production and start looking to convert from development fees to supply chain agreements.
In terms of our operating cost for the business for the half year, it was 3.4m audited. That compares to about 3.7m for the same year prior, 12 months ago. And I think that continues to show a focus from the business on the need to run a lean operation. We have pulled out nearly AUD 3 million of OpEx over the last two years from the business, and we're continuing to stay very focused on making sure that the cost of running the business is as lean as it can be.
Cash receipts for the quarter were approximately AUD 3 million, and that is the AUD 1.72 million of customer receipts that I've just detailed, as well as a substantial payment from the ATO by way of the R&D rebate that we've typically secured from them because of the large amount of R&D work that we undertake, and also the first of a number of payments that we've received from the government for the Syphilis CRC-P grant program. That meant that we finished the quarter debt-free and with cash on hand of AUD 2.9 million at 31 December. That's an improvement on the prior quarter where we finished with approximately AUD 2.6 million at the end of Q1 . We're pleased that our cash on hand remains in a robust situation, and we're obviously continuing to focus on the cash coming into the business as well as the cost base of the business.
In terms of our priorities for 2025, I don't think they're going to come as a shock. We're continuing to grow the HIV sales business. That's our bread and butter in terms of revenue growth over the shorter period. We're focusing on expanding the Australian business here through a number of methods. One is to continue to actively promote in the pharmacy channel. We're still seeing new pharmacies come to the product as awareness and word of mouth about the product spread. We're continuing to see increased demand from public health. Obviously, the NAPWHA program order was announced in the last quarter. We're continuing to manufacture and supply into that. We are also expecting to see sizable orders come through now as the vending machine program starts to scale. So we do expect to see good growth in Australia.
Obviously, with the long-term arrangement with Newfoundland locked in over the longer period, we do expect to see growth in Europe as well. We've spoken to Newfoundland about their interest in other markets. They've approached us with some interest in South America. We gave them Colombia because they set up an office there and started to supply into Colombia. They'd now want to use that as a base for other South American markets, and we're open to that, as well as looking at what else we can do in Europe in some markets where Newfoundland themselves are not particularly active, particularly in the southern and sort of Baltic and Iberian parts of the market.
We are very well progressed with the registration of the test in New Zealand and expect to launch in the coming months through a well-known leading national pharmacy chain over in New Zealand, and we'll obviously announce that as and when that agreement gets finalized. We are continuing to look at opportunities in LMIC markets, not just supplying and continuing to support Viatris in the public health channel, but I think increasingly looking at opportunities in LMIC markets, but outside of public health. We get better pricing when we go into private sector channels in global health markets, and the types of partners that we need to work with there are different to Mylan, who typically focus on the Ministry of Health public channel.
And we think in markets, particularly Southeast Asia and South America, there's opportunities that are more readily scaled in private channels, and we're looking to focus on those. And then longer term in Australia, we're really looking to understand how we can be a solution for people on PrEP. There's approximately 60,000 people on PrEP in Australia, and that number is increasing. Those people take tablets to minimize the risk of HIV prevention, but under the current protocol, they have to test four times a year to stay HIV negative, to stay on that program. At the moment, the policy is that they need to go into a clinic and test in that clinic every 12 weeks for HIV negative confirmation. There are a number of countries where there are programs that allow people to test at home on every second test, and that is cheaper.
It's also more convenient for people, and the requirement to go to a clinic every 12 weeks has been cited as one of the main reasons people drop off PrEP treatments, and we believe that being able to test at home, potentially with telehealth confirmation that you've done the test, would be a much more cost-effective and convenient way for people to test once, possibly twice a year, and that would significantly increase the overall market for our product in Australia if we were able to make that policy happen, so that's one of our strategic goals for the year, is to really lobby for that to be at least trialed with a view to implementing a policy change. Our other strategic priority obviously continues to be the opportunity with Syphilis.
We're looking to progress that program this year in terms of both the technology as well as the commercial opportunity. On the technology side, we're looking to close out, as I mentioned, our agreements to support continued development. We want to get into clinical trials later this year. The clinical trials through the grant that are funded by the CRC-P allow us to submit at the end of that program into Australia and also for IVDR in Europe. We are looking at options to have some non-dilutive support made available for U.S. clinical trials that would support a pathway for U.S. FDA approval, as well as looking at some not-for-profit grant opportunities that would support pre-qualification by World Health for an LMIC market version.
We do note that we have a HIV production facility in South Africa that would be ideally used for Syphilis production and would make that global health product much more cost-effective but also attractive for grant support. So we'll continue to work on that and advise of progress as it occurs. In addition to that, we're looking at commercial downstream partners. We know from a U.S. company that recently got an approval that there's a lot of demand for rapid Syphilis testing. We think with the novelty of the assay that Burnet developed and the novelty of the usability that Pascal delivers, particularly in self-testing, we think we've got a compelling product as we get closer to market. We're confident we'll be able to secure meaningful commercial partnerships by way of volume commitments or licensing arrangements or other.
We'll certainly be prioritizing that and looking to announce that as soon as it's material. Outside of our finished products, continuing to grow OEM business is a key goal. We note that Lumos, our partner, who have a FebriDx test already 510(k) approved in the U.S., are pushing on with a program to support CLIA waiver. CLIA waiver allows for tests to be used in non-lab certified settings, which increases the addressable market in the U.S. typically by a factor of five. And that is not only good news for the volumes that we could expect to supply Lumos on the other side of a CLIA waiver, but also then makes the Pascal platform that bit more competitive in the U.S. market. We're very focused on trying to build awareness of Pascal's usability as Lumos moves forward with that process.
Outside of that, we're very excited, as I mentioned, about the opportunities for this new clipping concept, and we'll be looking to also demonstrate the benefits of that, as well as establishing the reduced barriers to adoption for existing products around clinical regulatory and operational changes and impacts, and we'll certainly be looking to get some early adopters onto that platform and prove that what we believe a fairly compelling usability offer to existing customers in the market. That's the update for this quarter. I'd like to thank you for your continued interest and support of Atomo. We have received a couple of questions. I've tried to deal with most of them through the presentation itself, but there are a couple that maybe I'll follow up with. It says, "Does Atomo anticipate further orders from LMIC distributors like Viatris?" The answer is yes.
We received an order for them in December. That is going to be manufactured, I believe, in February after we finish the second batch of the order for the Australian government-funded NAPWHA program. We do see orders from them, but they are sporadic, as is the nature of global health tender business, which is why, as I mentioned, we'll be looking to try to focus our commercial efforts now more on private sector channel opportunities in those developing markets where we can start to bypass some of the Ministry of Health channels and get better pricing going direct into pharmacy and other markets where there's better pricing. Another question, "Atomo previously referenced potential partners and partnerships in the U.S.
Is the company still in discussion with organizations?" Yes, I was in the U.S. earlier in January, meeting with a couple of larger companies with a view to, I think, showcasing the technology that we have on the OEM side for a number of customers that have OEM-style supply B2B businesses, as well as showing the HIV and talking about the Syphilis opportunities that we have with our products and what the U.S. pathway to market might look like and trying to establish some opportunities there. So we do certainly continue to work with potential partners with a view to scaling our technology and finding someone who has the infrastructure and capital to help, particularly with U.S. market entry. We'll continue to stay focused on that.
I'd like to thank everyone for joining me today, and I hope it's been a useful presentation. Thank you.