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COVID-19 tests may become more frequent as Boris Johnson suggests rapid assays to open nightclubs

The diagnostics market has yet to peak, according to a broker

Novacyt SA - COVID-19 tests may become more frequent as Boris Johnson suggests rapid assays to open nightclubs

COVID-19 tests are here to stay even though the vaccine rollout is continuing at pace, while some experts reckon the diagnostics market has yet to peak.

Boris Johnson suggested rapid lateral flow assays could be used to support businesses that have been shuttered for nearly a year, such as nightclubs and theatres.

"That, in combination with vaccination, will probably be the route forward," he said at a press conference, although he noted it is still “early days", with "lots of discussions still to be had".

"There is a long way to go before we can get people back at big events safely,” a government source told the BBC.

Diagnostics firms touched record highs at the onset of the pandemic last year but rallies were dampened once vaccines started being approved and rolled out.

Many bounced back when it became clear tests will be needed for many months ahead until the virus is curbed.

Herd immunity would require 60-70% of the global population to be immune, which is around 5bn people.

To effectively help control the pandemic in the UK alone, it has been suggested the government will need around 120mln tests per month.

Proof of negative results is already required for international travel – all passengers to the UK must take a test three days before departure then take another two on days 2 and 8 of the 10-day quarantine once arrived.   

Companies offering or developing PCR tests include Novacyt SA (LON:NCYT), Yourgene Health PLC (LON:YGEN) and genedrive PLC (LON:GDR).

genedrive recently announced partner Beckman Coulter Life Sciences will sell its testing technology in the US, opening a new sales channel.

The automated solution can process 1,000 PCR samples per workstation over a standard eight-hour day, requiring in the process the equivalent of just half a full-time technician.

PCR testing is the most common type of testing as it provided the highest levels of accuracy, but is expensive and requires experienced professionals and some results can take days to process.

Lateral flow diagnostics, although not always as accurate as other technologies, can provide cheap and rapid results and be administered without training.

Companies offering or developing COVID-19 lateral flow tests (LFT) include Avacta Group PLC (LON:AVCT), Omega Diagnostics Group PLC (LON:ODX), Abingdon Health plc (LON:ABDX) and Immunodiagnostic Systems Holdings PLC (LON:IDH).

Braveheart Investment Group PLC’s (LON:BRH) investee company Paraytec is working with Sheffield University on a fast tool as well.

Meanwhile, Sensyne Health PLC (LON:SENS) is providing its MagnifEye system to LFT producer Excalibur Healthcare Services.

MagnifEye is an AI-powered software to read test results on smartphones; its algorithm detects lines that are difficult to read, including those not visible to the human eye, with the goal to improve accuracy.

“The encouraging progress on vaccines has prompted fears over the sustainability of this market; however, we believe these fears are unwarranted,” analysts at broker finnCap (LON:FCAP) said last month.

“We believe the market has yet to peak and will do so in 2021, but will remain strong into 2022 and beyond. Overall, it is likely that COVID-19 will be a part of our lives for years to come and may even be a perpetual presence – and as long as this remains the case, COVID-19 testing will be an important tool for keeping the disease in check and avoiding outbreaks.”

Quick facts: Novacyt SA

Price: 696 GBX

AIM:NCYT
Market: AIM
Market Cap: £4.91 m
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