Movers and SHAKERS
Image Courtesy of Cue health
Companies that Make Covid Test Kits Should Benefit from Staggering New Demand
A new wave of Covid19 cases shifts shortage concerns to test kits and testing facilities. While lines for testing during 2020 were long for most, that condition quickly faded, most mass testing sites closed for lack of patients after vaccines were made available. Lines and shortages then quickly shifted to the distribution of vaccines. Each change brings reason for investors to look at the companies that may experience new demand from the shift.
In a regular meeting with Governors (December 27), the President discussed concerns and what all parties can do to help their states related to Covid this winter. The President outlined the post-Christmas spike and spoke about three things they are doing. The first was related to increasing the ability to vaccinate by bringing more vaccines and vaccinators to the market. The second, we will highlight below because it is a major shift, it’s related to making hundreds of millions of Covid test kits available. The third, is support for hospitals.
Growth in Testing
In his meeting with the Governors, the President said, “The second thing we’re doing is more testing. Seeing how tough it was for some folks to get a test this weekend shows that we have more work to do, and we’re doing it.” He then outlined steps the White House is taking to make tests, hundreds of millions of tests, available for the asking.
Remarks by President Biden at COVID-?19 Response Team’s Call with the National Governors Association
The President announced he ordered FEMA to set up pop-up sites in places with high demand to shorten waiting periods for testing. As for over-the-counter test kits he reminded there were zero at the beginning of 2020, there are now eight versions on the market with another just cleared. He quoted some staggering numbers related to these at home kits saying, as a country we went from having none in January, 46 million in October, 100 million in November, and almost 200 million in December.
Over-the-counter test kits from pharmacies have been out-of-pocket costs for those using them. The President intends to change this, “Because of steps we have been taking to increase the number of authorized tests, we’re now able to purchase 500 million at-home rapid tests to be sent to the American people for free when they request it.” When in stock, an at home test kit typically retails for $12. This sector of the medical device and diagnosis field is likely to experience even more demand. Biden also pointed out that while they are providing no-cost to consumer tests, those that purchase over-the-counter tests will be able to seek reimbursement from their insurance company.
Virus Diagnostic Companies
While there are a number of behemoth companies that have a division that are involved in diagnosis and tracking, the below small-cap companies derive a larger percentage of revenue from these products. Information on each of these companies are available to research on Channelchek.
OraSure (NASDAQ:OSUR), manufactures the OraSure Technologies InteliSwab™ COVID-19 Rapid Test. It’s a self-swab test that provides results in 30 minutes. They are a medical device company that develops, manufactures, and markets medical devices and diagnostic products. The Company's products include molecular sampling kits for the genome and microbiome services and analytics, rapid diagnostics for infectious disease, and tests for substance abuse. OSUR has a market cap of $650m and a one-month price range between $8.53 and 9.60, currently OSUR is trading near $9 per share.
Cue Health (NASDAQ:HLTH), offers the product Cue COVID-19 Test. The kit is unique in it is an at-home test kit with a reusable reader that provides results and information to a CUE app on the user’s smart phone. Cue Health Monitoring System includes Cue Reader, made up of a portable, and reusable reader, Cue Cartridge, a single-use test cartridge, and Cue sample collection wand. Cue Data, with cloud-based data and analytics capability reads and reports back to the user. HLTH has a market cap of $2.3b and a one-month price range between $10.21 and $15.88, currently HLTH is reading near $15.82 per share.
Lucira (NASDAQ:LHDX), produces the first at home test kit that was FDA approved, the LUCIRA COVID-19 All-In-One Test Kit. The medical technology company is focused on the development of infectious disease test kits. The Company has developed a testing platform that produces high-complexity-laboratory-accurate molecular testing in a single-use and test kit. Its initial focus is on respiratory diseases, starting with COVID-19 and influenza A and B virus indications. LHDX has a market cap of $317.5m and a one-month price range between $4.91 and $8.47 currently, LHDX is trading near $8.12 per share.
Fluidigm (NASDAQ:FLDM), received emergency FDA authorization for its Covid-19 Saliva Test on December 7. The company says According to FLDM, its microfluidics technology enables processing of more samples per batch than more traditional, microwell plate-based PCR technology. The Biomark HD platform can generate as many as 6,000 test results per day on a single system. FLDM has a market cap of $287m and a one-month price range between $3.70 and $4.64 currently, FLDM is trading near $3.75 per share.
Covid test kits, whether at home or used at a facility are in increasing demand and have government sponsorship. Whether this translates into one or big two winners or across the board success for companies manufacturing kits remains to be seen. Understanding the full company profile is always important prior to investing. Investment time frame may be important when the company only serves the needs of Covid cases - the end game for Covid is that the disease will eventually no longer be a great a concern. Therefore, companies that also manufacture or plan to manufacture diagnostic products for other infectious disease along with Covid may be more suited for long-term investors. Login to Channelchek with your no-cost account and learn more about these companies and others.
Managing Editor, Channelchek
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