Relay Medical (CSE: RELA) has entered into an arrangement to exclusively sell and distribute two separate rapid diagnostic tests for COVID-19. Announced after the bell yesterday, the arrangement is currently classified as a binding letter of intent, which was entered into with Proprietary Innovation Labs.
The arrangement will see Relay’s medical diagnostic subsidiary, HemoPalm Corp, acquire the exclusive global rights (excluding China) to sell and distribute both an antigen and an antibody test kit for COVID-19. The antigen test is notably a lateral flow rapid diagnostic test, akin to a rapid pregnancy test. Both tests are CE approved, enabling the sale and distribution within Europe and other jurisdictions.
The tests are said to be ideal for point of care testing, with results available in as little as ten minutes. The manufacturer is notably capable of producing over 25 million test kits per month, enabling significant sales opportunities should Relay develop the required sales channels.
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Further, the company is considering submitting to both Health Canada and the US Food and Drug Administration to enable domestic approval of the device as an approved COVID-19 test. Currently, the CE designation enablres the sale of the test kits in 22 countries within the European Union.
In terms of the technical data, the antigen test, which tests for active infections, has a clinical sensitivity of 95.0% and a clinical specificity of 99.6%. The antibody test, which measures immune responses in people suspected of carrying the virus, comparatively has a clinical sensitivity of 93.3% and a clinical specificity of 99.0%.
With respect to terms, the company intends to enter a definitive agreement within 45 days. Currently, it is outlined that an exclusive identifiable brand will be mutually agreed to by both parties, while profits will be shared from the sale of products. 60% of the profits from a sale will be provided to the party sourcing the purchaser, while 40% goes to the other party. Relay also issued 400,000 common shares in connection with the agreement.
Relay Medical last traded at $0.21 on the CSE.
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