- Shares in Lumos Diagnostics (LDX) dip this morning after the company retracts an announcement about its FebriDx product
- On Wednesday, Lumos said a study published in a peer-reviewed journal found FebriDx could save the US healthcare system up to $2.5 billion per year
- This is because of the product’s potential to optimise antibiotic prescriptions by detecting the difference between bacterial and viral acute respiratory infections
- Today, Lumos retracts the Wednesday announcement because of the potential for investors to confuse healthcare savings with a financial forecast
- Shares in Lumos Diagnostics are down 1.1 per cent and trading at 92 cents
Shares in Lumos Diagnostics (LDX) have dipped this morning after the company had to retract an announcement from earlier this week about its FebriDx product.
Lumos announced on Wednesday a study published in the Journal of Health Economics and Outcomes Research (JHEOR) found FebriDx could save the US healthcare system up to $2.5 billion per year thanks to its ability to optimise antibiotic prescriptions.
However, Lumos called a trading halt soon after releasing the Wednesday announcement, claiming the pause in trade was necessary to ensure it was meeting ASX disclosure obligations.
Today, and after corresponding with the market operator, Lumos has retracted the Wednesday announcement because of the potential for investors to confuse healthcare savings with a financial forecast.
The issue with the news
Lumos’ FebriDx product is designed to tell the difference between bacterial acute respiratory infections (ARIs) and viral ARIs. This is important because a bacterial infection can be treated with antibiotics, while a viral infection cannot.
According to Lumos, roughly half of the antibiotics prescribed for ARIs in outpatient ambulance settings are unnecessary. What’s more, many patients experience adverse effects from taking these unneeded antibiotics.
The result is a string of unnecessary costs to the US healthcare industry each year — costs that the study published in the JHEOR found could be dramatically reduced through the use of the FebriDx product.
Lumos said it commissioned the study, though the company insisted it did not have a hand in the modelling process and was not aware of the study’s findings until it was published publicly.
Today, Lumos clarified that the study and subsequent ASX announcement were never intended to constitute a financial forecast for the potential market for the FebriDx device.
“Investors should note generally that possible healthcare ‘savings’ cannot be taken as the size of a potential market,” the company said in a statement to the ASX.
“Lumos has not provided any guidance as to possible market size for its Lumos’ FebriDx test, the possible pricing of its FebriDx test nor possible market take up or penetration of that potential market.”
The company added that its FebriDx test kit has not yet been approved by the US Food and Drug Administration (FDA), and this is a risk investors should consider.
Lumos said investors should not rely on the Wednesday ASX announcement or the findings of the journal article for making investment decisions.
Shares in Lumos Diagnostics were down 1.1 per cent and trading at 92 cents each at 1:49 pm AEDT. The company has a $136.6 million market cap.