Novacyt Share News (NCYT)

(Sharecast News) - Clinical diagnostics company Novacyt updated the market on its Covid-19 coronavirus test, developed by its molecular diagnostics division Primerdesign, on Thursday.
The AIM-traded firm said it had invested in a "significant increase" in manufacturing capacity, to support growing demand for the test .

As at 11 March, Primerdesign had sold and received orders for more than ?2.3m of its CE-mark and research use only (RUO) tests, which represented around five months of sales for the division under normal circumstances.

That was additional revenue to the core Novacyt business, which the board said also started the year "strongly".

In the past two weeks, the number of countries the firm was selling its Covid-19 test into had doubled to more than 50, which was expected to increase further as the virus continued to spread.

Currently, the company said it was seeing "significant" sales from Europe and from a number of new and existing distribution partners across the Middle East.

"Due to the high level of interest in the Primerdesign Covid-19 test and evolving nature of this outbreak, the company cannot predict sales with any certainty as the pipeline continues to change daily," the board said in its statement.

"However, it is clear that the demand for, and interest in, the company's tests remains very high and the directors' key focus is on ensuring Primerdesign can service the demand from as many customers as possible."

During the last two weeks, Primerdesign scaled up its manufacturing capacity for the test, and was currently meeting demand, the firm said.

The company had purchased enough raw materials to manufacture 3.5 million Covid-19 tests, and in addition, it had "significantly increased" its manufacturing capacity by appointing a third-party manufacturer, which it said specialises in high quality, GMP pharma and molecular diagnostic outsourcing and was based in mainland Europe.

It was expected that the combination of the two manufacturing operations would support production of up to two million tests per month, which would increase capacity by a factor of 10.

That increase in output would be available within the next two weeks, Novacyt said.

The purchase of further raw materials, and a further scale-up of manufacturing capacity, was possible under this outsourcing agreement.

The company added that it was working closely with the US Food and Drug Administration (FDA) to meet the "stringent" requirements for Emergency Use Approval (EUA) of its Covid-19 test, adding that it was hopeful its application would be successful.

A number of other national health agencies were still reviewing the test, but the firm said it was unable to indicate when those approvals could be granted.

As soon as an approval was granted, the board said it would communicate that.

"Novacyt is pleased to report the completion of a formal evaluation of its Covid-19 test by Public Health England (PHE), and is very satisfied with the performance assessment of its test," the directors added.

"The company believes this data represents an important endorsement of the claims made to date in relation to the quality and performance of its Covid-19 test."

It said it was understood that the report would be shared with the NHS to support their decisions for general Covid-19 testing across the UK.

Novacyt said it therefore expected to see an increase in the number of NHS hospitals purchasing Primerdesign's test.

Primerdesign was continually reviewing all publicly available Covid-19 genome databases, Novacyt added, to ensure the test remained effective in identifying all known strains of the virus.

As a result, the board said it remained confident in the continued performance of its test as the virus continued to spread.

"We believe the commercial demand for and interest in our Covid-19 test could continue for several months as the virus continues to spread from country to country," said chief executive officer Graham Mullis.

"We are therefore ensuring we are fully prepared to meet the increasing demand for the product, as we continue to position Novacyt to support the global response to monitor and contain the Covid-19 outbreak.

"The sale of our Covid-19 test has already generated significant revenue for the company, which we expect to continue given the increasing demand for the test."

In addition, Millis said the firm believed interest in the test would have a "positive, long-term impact" on Novacyt, as new customers looked to purchase its broader product range.

"We are already seeing an increased demand for our B2B capabilities as customers look to utilise our molecular design and development capabilities.

"We will continue to update shareholders regularly with the company's progress, but we also ask shareholders to be patient as we try to respond to an ever-changing situation."

At 1224 GMT, shares in Novacyt were up 10.23% at 118.5p.