Novacyt shares surge on demand for Covid-19 test

(Sharecast News) - Clinical diagnostics company Novacyt updated the market on its novel Covid-19 coronavirus test developed by its molecular diagnostics division Primerdesign on Friday.
The AIM-traded firm said it has signed a major distribution agreement in Asia, and an original equipment manufacturer (OEM) agreement with a United States healthcare group.

It said that, as at 27 February, Primerdesign had sold more than ?0.93m of both CE-mark and research use only (RUO) tests.

Since launching its CE-mark test, the company said it was experiencing high levels of interest in the product, with the value of quotations having grown significantly, as the firm was in active discussions with a number of countries which had an "acute need" for tests as part of their national screening programmes.

Due to the high level of interest in the test and the rapidly evolving nature of this outbreak, the company said it could not predict with any certainty the conversion rate of those ongoing enquiries.

Primerdesign had also signed its first major distribution agreement for the Covid-19 test with a global life sciences company, to supply the test to two Asian territories outside mainland China.

Initial sales, which were subject to local emergency use approval, were expected to be ?2.1m during the first six months of the agreement.

It expected the first sales under the agreement to take place in March.

The company also confirmed that it had signed an OEM agreement with a US healthcare group for the manufacture and sale of its RUO coronavirus tests.

In addition, as it had previously announced, the Primerdesign test was currently under review by the US Food and Drug Administration (FDA) for Emergency Use Approval, which would allow it to be used for clinical diagnosis of Covid-19 in the US.

The FDA and the company remained in regular contact.

Novacyt said public health authorities around the world were pursuing a variety of strategies when it came to testing for the coronavirus.

For example, it pointed out that Public Health England (PHE) had issued testing guidance to the NHS to be deployed across eight testing centres in the UK.

PHE, as part of its planning, had also invited diagnostic manufacturers including Primerdesign to submit tests for a formal evaluation process, which was expected to conclude next month.

It was not known at the current time what conclusions or guidance PHE would subsequently give to the NHS for testing.

The company said the current Covid-19 screening procedure in France involved directing all patient samples to the Institut Pasteur in Paris.

It was not known yet whether more widespread testing would be performed, and what test methods would be approved for use in those hospitals and clinics.

Other health authorities around the world had approved tests for emergency use from local manufacturers, and many were also currently reviewing the Primerdesign test.

The speed and processes to gain emergency approval for tests differed from country to country, the board explained, depending on their approval process and the perceived threat level of Covid-19.

Novacyt said it had put in place a number of measures to significantly increase production capacity, and was continuing to plan for greater throughput to ensure Primerdesign could meet all current and potential demand.

Those measures included, if necessary, using its manufacturing capacity at both of its UK sites.

"I am extremely pleased with the commercial interest shown in our test to date and to be able to support the global response to monitor and contain the Covid-19 outbreak," said chief executive officer Graham Mullis.

"The two contracts announced today reinforce how quickly the response to this virus is developing and shows our commitment to support these efforts anywhere in the world.

"We believe the Primerdesign test remains among the quickest and most accurate tests available for Covid-19, as well as being stable for long distance shipping without the need for specialist cold-chain shipping."

Mullis said the test was also designed to run on multiple molecular testing platforms commonly used globally.

"I am proud of the team who are working extremely hard to meet the regulatory and manufacturing challenges to make our test available to as many affected countries as possible."

At 0950 GMT, shares in Novacyt were up 23.48% at 142p.