Testing Space in Focus Again Thanks to New Wave of Coronavirus
Not many expected the New Year to start with tightened COVID-19 restrictions. The U.K. has already stepped into the third lockdown despite the extensive rollout of vaccines. In the United States, following the holiday season and the Capitol Hill riot last week, many market watchers apprehend imposition of widespread restrictions across the country once again.
Arizona yesterday reported record number of deaths. Washington has already extended public emergency for 15 days.
Abbott in Limelight
Given the relentless surge in COVID-19 cases over the past couple of months, diagnostic laboratories are almost on the verge of succumbing to the enormous pressure of developing COVID-19 test kits. Amid this, Abbott’s ABT endeavor to complete the supply of 150 million BinaxNOW COVID-19 tests by this week has come as a major respite for the government.
We note that through a combined initiative of the U.S. Department of Health and Human Services (HHS) and the Department of and Defense (DOD), the government, in August, decided to buy 150 million of Abbott’s $5 rapid antigen test for COVID-19. Abbott also promised to continue supplying HHS with a total of 30 million tests till March 2021.
The HHS expects the supply of BinaxNow kits to significantly boost the testing capacity of the nation. These kits will be distributed through HHS to different states, territories and targeted entities like nursing homes, assisted living facilities, home health and hospice agencies, historically black colleges and universities (HBCUs), and the Indian Health Service (an operating division within the HHS).
Testing Space Grabs the Spotlight Again
Both in terms of diagnostic tests (molecular and antigen) and antibody tests to detect SARS-CoV-2, diagnostic testing companies have invested billions of dollars so far. Though it was initially assumed that once vaccines are rolled out, the demand for testing will decline, the ongoing resurgence in cases has put the focus back on the testing space.
Needless to say, it's once again time for investors to keep a close eye on suitable stocks from the space for robust portfolio gains going ahead.
A Hot Lineup
In December 2020, the FDA granted Emergency Use Authorization (EUA) to Ellume Health’s COVID-19 Home Test as the first over-the-counter fully at-home diagnostic test. Notably, as part of this Australian company’s global COVID-19 partnership with QIAGEN QGEN, it is developing COVID-19 tests. Prior to that, Ellume launched Access Anti-SARS-CoV-2 Total test under the collaboration with QIAGEN. Qiagen carries a Zacks Rank #2 (Buy).
One-Year Price Performance
Meanwhile, competing against Abbott’s rapid antigen test, Quidel Corporation
Again, Becton, Dickinson and Company’s or BD
In terms of molecular diagnostics and antigen tests, Hologic
Quest Diagnostics
LabCorp
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