The past six months have confirmed the catbird seat for the MedTech space in the investment world. Diagnostic test makers who have come out with meaningful developments amid the coronavirus scenario have witnessed a surge in stock prices.
Since February, with the federal regulatory body speeding up the approval procedure for these tests, a series of testing laboratory and biotech companies have achieved FDA’s Emergency Use Authorization (EUA) for launching their coronavirus test kits with many still in the pipeline. In this journey, while the big shots diagnostic testing players are scoring big, smaller and little-known stocks too are in the race, hinting there’s still a lucrative investment opportunity out there right now.
Let us delve deeper.
Molecular Diagnostics Versus Rapid Antigen and Antibody Testing Run-Ups
In this regard, per the FDA’s definition, molecular tests include nucleic acid amplification test (NAAT) and the RT-PCR tests that detect the virus’s genetic material. Antigen tests on the other hand are rapid tests that detect specific proteins on the surface of the virus. Antibody tests are serological tests that diagnose active coronavirus infection at the time of the test or confirm that one does not have COVID-19.
In the initial phase, major molecular diagnostic players reaped the benefits of the amplified demand for COVID-19 testing. These include companies like Quest Diagnostics’ (DGX - Free Report) COVID-19 test service that got the FDA’s EUA on Mar 17. LabCorp too made a significant stride following the launch of RT PCR testing on Mar 5. Both LabCorp and Quest Diagnostics, over the past six months, have risen 10.9% and 7.3%, respectively.
Price Comparison: Molecular Testing Stocks
However, with the surge in new infections, concerns related to costs and complexities of molecular diagnostic testing procedures starting from sample collection till execution and above all the time required for results extraction rose. This gradually made way for SARS-COV2 rapid antigen and antibody tests.
Here we may mention Becton, Dickinson and Company (BDX - Free Report) or BD. In July, the company received EUA for its Rapid Point-of-Care Antigen Test. This portable test delivers results in 15 minutes. Over the past three months, this stock has risen 2.4%.
Abbott (ABT - Free Report) , in August, made a path breaking development in this space with the launch of its $5 rapid antigen test, BinaxNOW COVID-19 Ag Card. This cost-effective credit card sized pocket-friendly test uses Abbott’s lateral flow technology and provides results in as less as 15 minutes. Over the past three months, this stock has surged 20.6%.
Price Comparison: Rapid Testing Stocks
In terms of rapid antibody serology tests, the first name that crops up on investors’ minds Fluidigm , which received the FDA’s EUA for its rapid COVID-19 saliva test in August. The stock has surged 79.4% over the past three months.
We may also mention Bio-Rad’s blood-based immunoassay kit to identify antibodies to the SARS-CoV-2. The stock has rallied 14.4% in the past three months.
A Hot Lineup
Here, for investors’ convenience, we have discussed particularly those stocks, which hold enormous potential in the diagnostic testing space with their COVID-19-specific innovations. All these companies have outperformed their respective industries in the recent times.
Quidel Corporation (QDEL - Free Report) was the first to achieve the FDA’s EUA for its rapid antigen test Sofia 2 SARS Antigen FIA in May. This test is authorized for use only at high and moderate complexity laboratories certified by Clinical Laboratory Improvement Amendments (CLIA) as well as for point-of-care testing by facilities operating under a CLIA Certificate of Waiver. Notably Quidel's rapid immunoassay product sales jumped 270% in the second quarter. This Zacks Rank #1 (Strong Buy) stock has gained 87.2% over the past six months, outperforming the 25.3% growth of its industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
QIAGEN N.V. (QGEN - Free Report) : Currently, the company is under the limelight with given its progress in antibody and antigen tests for SARS-CoV-2. In August, it launched Access Anti-SARS-CoV-2 Total test to detect antibodies in people exposed to the SARS-CoV-2 virus. In September, it came up with plans to launch the Access Anti-SARS-CoV-2 Antigen Test. Earlier, the company also launched a range of PCR tests on QIAstat-Dx and NeuMoDx systems and delivered universal NGS solutions for use with any sequencer. This Zacks Rank #1 stock has rallied 24.1% over the past six months, outperforming 17.7% growth of its industry.
Thermo Fisher Scientific (TMO - Free Report) : In March, Thermo Fisher successfully attained EUA from the FDA for its diagnostic test that has been developed for the detection of nucleic acid from SARS-CoV-2. This authorization was amended later to include additional instruments. On Mar 26, the company announced that this test had received the CE mark in the European Union. Apart from PCR tests, the company is currently working on serological tests. This Zacks Rank #2 (Buy) stock has surged 47.6% over the past six months, outperforming 35.4% growth of its industry.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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