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Coronavirus test makers could be about to cash in as US heads for winter crunch

Laboratory operators in the US have said a lack of capacity has created a backlog of tests that are being processed too slowly to stem the tide of infections

Genedrive PLC - Coronavirus test makers could be about to cash in as US heads for winter crunch

A number of London-listed groups making coronavirus tests could potentially be in line to benefit from a coming shortage of US testing capacity.

In a Financial Times report on Tuesday, executive vice-president of US lab operator Quest Diagnostics James Davis warned that it will be impossible to increase testing rates to cope with demand during autumn when cases of seasonal flu and common colds appear presenting similar symptoms to coronavirus.

Testing companies are finding themselves struggling to keep up with capacity as the pandemic ravages the US, with no signs that the infection rate will slow in the next few months.

Davis said the there was “no way” testing capacity will be doubled in the next three months, highlighting a shortage of chemical reagents and testing machines from manufacturers.

The backlog also means the current official figures for US infections, around 3.9mln cases at the last count, is likely to be out of date alongside the death figure of around 143,000.

Davis told the FT that “other solutions need to be found” to clear the logjam, other testing would cease to serve a purpose due to the delays making containment and tracing nearly impossible.

Possible opportunity

With laboratory testing in the US buckling under the weight of its coronavirus caseload, there could be a possible opening for firms developing rapid tests that do not require laboratory analysis to target the shortage in the American market as winter approaches.

Potential beneficiaries include Genedrive PLC (LON:GDR), which is currently awaiting approval by regulators for its point of care Genedrive 96 SARS-CoV-2 test, which has already received over £1mln indicative orders and is targeted for release at the end of 2020.

Meanwhile, last week networking and biotech group BATM Advanced Communications Limited (LON:BVC), which last week unveiled three new coronavirus diagnostic kits that are designed to detect the number of antibodies in a person’s blood, possibly to assess the severity of the infection, as well as detecting the infection at lower viral loads, potentially allowing action to be taken earlier in the cycle of the disease.

READ: BATM higher as it unveils three new coronavirus testing kits

The third test is designed to rapidly identify the specific respiratory virus or bacteria in someone presenting with symptoms of, or suspected to have pre-symptomatic respiratory illnesses, a useful quality heading into the flu season as it could allow coronavirus patients to be quickly distinguished from those suffering from common infections.

The tests are expected to go on sale at the end of the third quarter, right as flu season begins across the northern hemisphere.

READ: Integumen formalises collaboration with Avacta as it develops real-time coronavirus detection technology

Avacta PLC (LON:AVCT), an AIM-listed maker of affirmers, small proteins that bind to target molecules, could also be in line to profit from a surge in testing demand after inking a deal with Integumen PLC (LON:SKIN) to use the latter’s technology in a coronavirus detection kit.

Integumen said the Avacta affirmers “have the potential to play a key role in the real-time identification of localised COVID-19 hotspots in wastewater”, helping the authorities to isolate local outbreaks and potentially stem the impact of a ‘second wave’ of infections over the winter months.

Quick facts: Genedrive PLC

Price: 102 GBX

Market: AIM
Market Cap: £57.59 m

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