RE: DIAGNOSTICS LARGE CAPS PREDICT COVID TESTING VOLUMES FOR 202117 Feb 2021 17:48
Novacyt appeared to be waiting until further in 2021 before committing to a revenue forecast, the large cap diagnostics whales were much less guarded. Abbott, Perkin Elmer, Thermo Fisher and Roche revealed their analyst forecasts for covid testing for the year ahead in earnings calls last month, and number of common themes emerged, the most notable that testing for covid ramped up significantly in Q4 2020 and is set to continue to the first half of 2021. The numbers make for interesting reading and even once peak testing is reached, likely in the second half on 2021, the revenues are still staggering in the period ahead. Where they diverge in their analysis is also revealing, and likely informs us to a degree about their strategy and weight of various covid product lines and markets they’re embedded within.
Novacyt continues a key theme alongside the earnings calls for the Big Four below, in that they are all continuing to launch new products well into the year ahead, even though vaccinations are likely to begin showing some effect. Clearly all analysts consider the return on investment of new covid products in 2021 and 2022 to provide a more significant return over organic non-covid assay sales, and that is bolstered by the fact that the pandemic is truly global, hinting at years of sustainable multi covid portfolio revenues.
Roche is a standout below as they did not reveal covid test sales distinct from overall group sales, however they made interesting insights on longevity. As cases get driven down by the vaccine they believe this will intensify other types of testing such as population surveillance, screening, antibody testing and flu/covid multiplex sales.
Thermo Fisher, Abbott and Roche are strongly aligned on both the decentralisation of testing being the future of diagnostics, and also on the opportunity provided by the testing instrument installations to pivot into mass screening programs after the pandemic. Notable mentions went to HPV and tuberculosis. This closely fits Novacyt’s narrative and shows they’re on the right track with their R&D and acquisition spend.
The future of diagnostics is clearly defined by the lead players, and the race is on to innovate and install decentralised instruments in as many territories as possible while government funding boosts this momentum. Although instrument sales are a relatively minor portion of the revenues shown below, (merely 10% for Perkin Elmer for example), in terms of future revenue growth, they are the most critical aspect now. It’s in this light that Novacyt’s acquisition of IT-IS and manufacturing boost makes increasing sense. They will need to drive harder in this area than any other, and innovate faster too with revisions and new models of the Q-series to make them even faster and easier to use....
See article for the rest
https://novacytinsider.com/earnings-call-2021/
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