As Covid-19 cases continue to climb around the world, testing stocks have once again risen in popularity. With an effective vaccine still a few months away at best, testing is currently the best solution for governments to try and keep the pandemic under control.
In the UK, the government has made it clear that Covid testing will be ramped up significantly in the coming months. Prime Minister Boris Johnson recently announced plans to test up to 10% of the UK’s population each week, a rise from the current 300,000 weekly tests to over 5 million, as part of ‘Operation Moonshot’. Even after the development of a successful vaccine, Covid testing will likely be around for a while.
With the sudden strong change in fundamentals, investors have once again set their sights on Covid stocks, driving many to new heights. So below, we attempt to demystify this part of the diagnostics market.
Some of the best performers on the UK market this year have been Covid-19 focused testing stocks and there have been more than a few multi-baggers. Below is a screenshot of the best performers on the UK market over the last year. As you can see below, 6 of the top 21 performing companies have been involved in Covid-19 diagnostics, therapeutics or equipment provision in some way.
In this article, we will explain some of the different testing solutions on the market, evaluating the different advantages & drawbacks of these solutions and where they are at in the development process.
In the follow-up article, we will briefly assess some of the UK listed companies in this space, to give investors a more comprehensive idea of the opportunities in this potentially highly lucrative but highly speculative segment of the market. We will be covering the following: Novacyt, Avacta, Omega Diagnostics, Genedrive, Braveheart Investment Group and Yourgene Health.
Types of Covid-19 Testing
It is important to remember that diagnostics testing focuses upon two key elements: sensitivity and specificity.
- Sensitivity refers to the ability of a test to accurately detect those who have the disease that is being tested for (known as the ‘true positive’ rate). A test which is highly sensitive will be able to detect most cases of infection, thereby generating few false negative…
