Covid-19 Company Review

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The majority of listed companies across the world have been battered on their stock markets by the unfolding coronavirus crisis in recent months. But for the few companies that may be able to play a part in tackling Covid-19, the pandemic has added significant value. 

Below, we take a look at some of the Aim-listed companies that have benefited so far, outlining what role they may play in defeating coronavirus, and assessing whether there is more to come from each of them. 

Novayct

In mid-January, this Anglo-French biotech company’s share price was trading at around 15p. Today, it is sitting pretty at 405p. 

The firm, listed on Aim since 2017, first announced in late January that it had launched a molecular test to detect Covid-19. 

As fears around coronavirus have accelerated in the months since, Novacyt’s share price has continued to rise.

Earlier this week, the company signed a contract with the Department of Health and Social Care to supply 288,000 diagnostic tests a week to the NHS for an initial six-month period.

And in an update on Wednesday, Novacyt revealed it is now supplying its test to more than 100 companies. 

More news may come when the company reports its full-year results on 11 May.

Inspiration Health is another Aim company in the thick of the fight against coronavirus. However, because there are some concerns about disruption to the company’s main business – supplying neonatal and perinatal equipment to health services – Inspiration’s share price has been choppy, and has risen only slightly since the beginning of the year.

In an update to investors on 21 April, Inspiration said its work sourcing ventilators for the NHS and other health organisations across the world is offsetting any other disruption from the pandemic.

Its share price is currently 63p, which is below its value in January.

Avacta Group

Avacta’s share price shot up from 21p to 96p over the course of April. Early in the month, the Aim-listed company revealed it was collaborating with Cytiva, formerly known as GE Healthcare Life Sciences, to develop and manufacture a rapid test for Covid-19. Updating the market on 22 April, the firm revealed the companies are “well ahead of schedule”. 

After this latest news, UK Investor Magazine covered a positive note from Turner Pope research analyst Barry Gibb. 

He reportedly said: “Beyond the obvious reputational and commercial, albeit presently unquantifiable, short and longer-term opportunities that could emerge from its new partnership with Cytiva, this development represents a major inflection point along with potential for creation of significant value for Avacta, while it also forwards its partnered programmes and licensing relationships for its diagnostics reagents.”

Open Orphan

Open Orphan, listed in both London and Dublin, is another firm that has been performing strongly on hopes it can play a part in the fight against Covid-19. Its share price has risen solidly from 5p to 8p since the beginning of the year on hopes of a potential coronavirus treatment.

The company revealed on 23 April that its London-based subsidiary, hVIVO, has started testing an anti-viral for treating Covid-19 on behalf of its client, Nearmedic International.

Open Orphan executive chairman Cathal Friel said: “We are very happy to be assisting in the battle against Covid-19 and are delighted to be working with Nearmedic International Ltd. hVIVO is a world leading provider of services to global vaccine and antiviral development companies and our scientists have considerable knowledge from previous anti-viral trials which gives us confidence in our testing. We look forward to updating the market on a regular basis in the weeks and months ahead.”

Fusion Antibodies

Belfast-based Fusion Antibodies this week announced a £3m share placing to help fund its Covid-19 work. The contract research company is working with Queen’s University Belfast to develop new therapeutic and diagnostic approaches to help fight the virus.

Announcing the fundraise, chief executive Paul Kerr said: “We are delighted to be able to announce this oversubscribed placing which will help us in our critical work. In these currently extremely challenging times, we now have the resources to undertake the additional proof-of-concept work on the Mammalian Antibody Library Discovery Platform in respect of COVID-19, as well as for our existing oncology targets, whilst continuing to support our clients in their vital role. We remain confident that our products and services can help to accelerate finding a solution to this global health crisis.”

Fusion’s share price has risen from 87p early in April to 129p on Thursday.

Omega Diagnostics Group

Omega is another Aim company that saw its shares rise sharply through April – from 8p to 57p. Early in the month, the company announced it had signed a memorandum of understanding with three other UK companies to develop a Covid-19 point-of-care antibody test. 

Then this week, the disease testing kit supplier revealed it had CE-marked a test. The company now plans to manufacture up to 46,000 Covid-19 tests a day. 

Synairgen

Southampton-headquartered Synairgen, a respiratory drug company, is trialling a treatment for Covid-19. Its share price has risen from 7p in January to more than 60p today. 

On Thursday, the company announced it had received approvals to extend its trial to patients in their homes. Its study on hospital treatments is “progressing well”, with results expected in June.

Bloomberg quoted Finncap analyst Mark Brewer as saying that the company’s drug has “enormous” market potential in late March. The Motley Fool also this week recommended investors buy into the stock.

The global response to help pick up the pieces has never been more essential…

The author was remunerated but does not hold shares in the companies mentioned


Categories: Bulletin