Atomo Diagnostics Limited (ASX: AT1) has secured an exclusive global licensing agreement with the Burnet Diagnostics Initiative for a novel liver function test, extending through December 2044. The deal represents a strategic expansion of Atomo’s existing partnership with Burnet Institute, building on their Active Syphilis test collaboration announced in March 2025.
The agreement carries immediate commercial validation. A multinational pharmaceutical company is already evaluating the technology, having previously ordered 20,000 Pascal cassettes to support real-time monitoring of drug-induced liver injury in a US clinical trial. With product development substantively complete and diagnostic performance established, Atomo views the worldwide licensing rights as material to its commercialisation strategy.
Under the licensing structure, Atomo commits to an immediate payment of $150,000 to Burnet, followed by regulatory milestone payments totalling $650,000 upon securing approvals from the FDA (United States), IVDR (Europe), and TGA (Australia). Royalty payments commence only after regulatory approval, aligning cash outflows with product de-risking milestones. The royalty structure includes a lower rate for low-middle income countries, acknowledging differential pricing requirements in emerging markets.
Managing Director John Kelly stated: “We have developed an excellent working relationship with Burnet through our existing partnership on Active Syphilis and are delighted to expand this strategic engagement to now include an exciting novel Liver test with broad clinical utility across a range of common acute and chronic liver conditions.”
Key Commercial Milestones:
- Immediate licensing payment: $150,000 (completed)
- FDA regulatory approval milestone payment
- IVDR regulatory approval milestone payment
- TGA regulatory approval milestone payment
- Royalty payments commence post-regulatory approval
The extensive development and clinical work already undertaken on the Pascal platform reduces both product development risk and anticipated timelines to regulatory submissions.
What Does Atomo’s Liver Function Test License Mean for Investors?
The Atomo Diagnostics Pascal Liver Test represents a de-risked revenue opportunity with a clear commercial pathway already validated by pharmaceutical industry interest. Unlike speculative early-stage diagnostics programs, this product enters licensing with established diagnostic performance and real-world evaluation underway at a multinational pharmaceutical company.
The agreement leverages Atomo’s existing Pascal cassette technology, reducing development costs and accelerating time-to-market compared to developing a standalone test platform. The company’s Pascal system already supports commercialised products for HIV, COVID-19, and pregnancy testing, providing proven manufacturing capabilities and regulatory precedent.
The structured payment model aligns financial commitments with progressive value unlocks. The initial $150,000 licensing fee is modest relative to the potential market opportunity, whilst the $650,000 in regulatory milestone payments only become due as the product clears approval hurdles in major markets. Royalties activate only post-approval, conserving cash during the development phase.
Importantly, the licensing agreement includes differential royalty rates for low-middle income countries, demonstrating commercial sophistication in addressing global pricing dynamics. Whilst specific royalty percentages remain confidential, Atomo confirms they align with diagnostics industry standards for agreements of this nature.
For retail investors, this announcement provides revenue optionality beyond Atomo’s existing product portfolio, with defined cost structures and pharmaceutical validation occurring before regulatory approval. The December 2044 licence term provides two decades of potential commercial exclusivity.
The Clinical Problem: Detecting Drug-Induced Liver Injury
Alanine aminotransferase (ALT) is an enzyme found primarily in liver cells. When the liver becomes inflamed or damaged, ALT leaks into the bloodstream at elevated levels, making it a key biomarker for detecting liver injury. Healthcare professionals use ALT measurements to identify liver problems early, monitor disease progression, and assess treatment effectiveness.
Drug-induced liver injury (DILI) represents a critical clinical challenge requiring rapid detection and urgent response. When patients take medications with known liver toxicity risks (including certain antibiotics, pain relievers, and chemotherapy drugs), monitoring ALT levels enables early identification of liver inflammation before it progresses to serious damage. Traditional ALT testing requires laboratory blood draws with results often taking hours or days, delaying clinical decision-making.
Point-of-care and home-based ALT testing addresses this timing gap. The Atomo Diagnostics Pascal Liver Test delivers results at the site of patient care, enabling immediate clinical decisions about medication continuation, dose adjustment, or alternative treatment selection. This capability proves particularly valuable in clinical trial settings, where pharmaceutical companies must monitor participants for safety events in real-time.
Why ALT Monitoring Matters for Patient Safety:
- Detects liver inflammation before symptoms appear
- Enables rapid response to drug-induced liver injury
- Supports safer medication management for high-risk therapies
- Reduces hospitalisation risk through early intervention
- Facilitates real-time safety monitoring in clinical trials
Burnet Institute Director of Commercialisation Jen Barnes highlighted the clinical utility: “An easy-to-use point-of-care ALT test has the potential to benefit multiple patient populations across a range of conditions by enabling earlier detection, faster clinical decision-making, and more timely access to appropriate care.”
The test’s application extends beyond DILI monitoring. Chronic liver conditions including viral hepatitis B and C, fatty liver disease, and alcoholic liver disease all require regular ALT monitoring, creating substantial addressable markets across acute and chronic care settings.
How Does the Pascal Liver Test Detect Drug-Induced Liver Injury?
The licensed liver function test integrates with Atomo’s proven Pascal cassette platform, leveraging technology already validated across multiple diagnostic applications. The Pascal system combines sample collection, processing, and result display in a single integrated device, eliminating the multi-step procedures required by traditional laboratory testing.
For drug-induced liver injury monitoring, the test measures ALT levels in a small blood sample, delivering results at the point-of-care or in the home setting. This rapid detection capability supports pharmaceutical clinical trials, where monitoring participants for liver injury enables immediate safety interventions if ALT levels rise above acceptable thresholds.
The 20,000 Pascal cassettes previously supplied to a multinational pharmaceutical company for a US drug trial demonstrates real-world validation. Pharmaceutical companies conducting trials of medications with potential liver toxicity require reliable, rapid ALT monitoring to protect participant safety and meet regulatory requirements.
Testing Process Flow:
- Small blood sample collected via fingerstick
- Sample applied to Pascal cassette
- Integrated processing measures ALT levels
- Result displayed on device within minutes
- Clinical decision made immediately based on result
The platform approach provides Atomo with significant commercial advantages. Rather than developing new manufacturing processes, regulatory pathways, and quality systems, the company adapts its existing Pascal infrastructure to incorporate the licensed ALT assay technology. This reduces both capital requirements and time-to-market compared to standalone test development.
What Is the Market Potential for Atomo’s Rapid ALT Test?
The Atomo Diagnostics Pascal Liver Test addresses multiple clinical applications beyond its initial drug-induced liver injury focus, creating diversified revenue pathways that reduce dependence on single-market success. The global licensing scope enables commercialisation across developed and emerging markets, with differential pricing structures accommodating varied healthcare economics.
Pharmaceutical clinical trial monitoring represents the near-term revenue opportunity, validated by existing multinational company evaluation. This application requires reliable, rapid testing to ensure participant safety during trials of medications with potential liver toxicity. The existing order for 20,000 cassettes demonstrates commercial traction in this segment.
Chronic liver disease monitoring creates medium-term expansion potential across several high-prevalence conditions. Viral hepatitis B and C require regular ALT monitoring to assess disease progression and treatment effectiveness. Fatty liver disease, increasingly common in developed economies due to obesity and metabolic syndrome, necessitates ongoing liver function surveillance. Alcoholic liver disease monitoring supports clinical management of patients with alcohol-related liver damage.
The lower royalty rate structure for low-middle income countries acknowledges substantial global populations requiring accessible liver function testing. Emerging markets often lack laboratory infrastructure for traditional ALT testing, creating addressable demand for point-of-care alternatives.
| Clinical Application | Patient Monitoring Requirement | Commercial Priority |
|---|---|---|
| Drug-Induced Liver Injury | Real-time safety monitoring during high-risk medication use and clinical trials | Near-term (active pharma evaluation) |
| Viral Hepatitis B/C | Regular screening and treatment response monitoring | Medium-term expansion |
| Fatty Liver Disease | Ongoing surveillance for disease progression | Medium-term expansion |
| Alcoholic Liver Disease | Clinical management and relapse monitoring | Medium-term expansion |
The portfolio approach to commercialisation provides strategic flexibility. Success in pharmaceutical trial monitoring establishes product credibility whilst generating revenue to fund regulatory submissions for broader chronic disease applications. Each approved indication expands the addressable market without requiring fundamental product redesign.
Regulatory Pathway and Commercial Timeline
The licensing agreement structures regulatory milestone payments across three major jurisdictions, creating a tiered approval pathway that balances market access with capital efficiency. Atomo commits to $650,000 in aggregate regulatory milestone payments upon securing approvals from the FDA (United States), IVDR (Europe), and TGA (Australia), with payments triggered as each regulatory hurdle clears.
This payment structure aligns cash outflows with product de-risking. Rather than committing substantial upfront capital before regulatory validation, Atomo pays Burnet as the product successfully navigates approval processes in each major market. The approach conserves working capital whilst maintaining partnership alignment through progressive value recognition.
Royalty payments commence only after regulatory approval, eliminating cash outflows during the development and approval phases. This structure proves particularly founder-friendly, protecting Atomo’s cash position whilst the product remains pre-revenue. Once approved and commercialised, royalties activate as a percentage of net revenues, with lower rates applied to low-middle income country sales where pricing constraints reduce revenue per unit.
The extensive development and clinical work already undertaken on the Pascal platform reduces regulatory risk compared to novel diagnostic technologies. Atomo’s existing regulatory submissions and approvals for Pascal-based HIV, COVID-19, and pregnancy tests provide precedent for navigating regulatory pathways, potentially accelerating submission timelines.
| Regulatory Milestone | Regulatory Body | Payment Component | Market Access Unlock |
|---|---|---|---|
| FDA Approval | United States Food and Drug Administration | Portion of **$650,000** total | United States market commercialisation |
| IVDR Approval | European In Vitro Diagnostic Regulation | Portion of **$650,000** total | European Union market commercialisation |
| TGA Approval | Australian Therapeutic Goods Administration | Portion of **$650,000** total | Australian market commercialisation |
| Royalty Activation | Post-regulatory approval in any jurisdiction | Percentage of net revenues (confidential rates) | Ongoing revenue share with Burnet Institute |
The product’s substantively complete development status, combined with established diagnostic performance and active pharmaceutical company evaluation, positions the test ahead of typical early-stage diagnostic programs that must still validate clinical utility before pursuing regulatory submissions.
Strategic Partnership Expansion with Burnet Institute
The liver function test licensing agreement represents the second product collaboration between (ASX: AT1) and Burnet Institute within ten months, following their March 2025 Active Syphilis test partnership under a federal government CRC-P grant. This repeat partnering validates the working relationship and suggests potential for additional Pascal platform applications emerging from Burnet’s diagnostics pipeline.
Burnet Institute’s commercialisation focus aligns with Atomo’s platform strategy. Rather than developing purely academic research tools, Burnet prioritises market-ready products addressing real-world clinical needs. Director of Commercialisation Jen Barnes emphasised this approach, stating the Burnet Diagnostics Initiative focuses on products that “address real-world clinical needs and improve outcomes for patients.”
The dual-product pipeline demonstrates partnership depth beyond single-transaction licensing. Both the Active Syphilis and liver function tests leverage Atomo’s Pascal platform, indicating Burnet’s confidence in the technology’s commercial viability across multiple diagnostic applications. This technology fit reduces integration complexity and accelerates development timelines for future collaborations.
Partnership Timeline Milestones:
- March 2025: Active Syphilis test licensing agreement announced, supported by federal CRC-P grant
- April 2024: Initial 20,000 Pascal cassette order fulfilled for pharmaceutical company DILI monitoring
- January 2026: Liver function test licensing agreement secured with exclusivity through December 2044
The partnership structure positions Burnet to focus on assay development and clinical validation whilst Atomo provides platform technology, manufacturing capabilities, and global commercialisation infrastructure. This division of expertise creates operational efficiency, with each party contributing their core competencies rather than duplicating capabilities.
For investors, the expanding Burnet relationship provides a visible pipeline of potential future Pascal applications beyond the two currently licensed products. Burnet’s ongoing diagnostics research may yield additional assays suitable for point-of-care delivery, creating organic growth opportunities within an established partnership framework.
Want to see how Atomo’s licensing strategy could drive long-term value?
The Pascal platform’s expansion into liver diagnostics demonstrates Atomo’s ability to leverage existing infrastructure for new revenue streams, with pharmaceutical validation already underway. This licensing model reduces development risk whilst preserving two decades of commercial exclusivity across global markets.
For detailed analysis of AT1’s commercial pipeline, regulatory milestones, and strategic positioning within the point-of-care diagnostics sector, visit the Atomo Diagnostics investor centre. Track how the company converts licensing agreements into market-ready products across multiple clinical applications.