There was some relief for shareholders in specialist diagnostics group Novacyt (NCYT:AIM) on Wednesday after its shares gained 6% to 725p following an update on its research and development (R&D) activities. The shares have dropped 42% over the last month.

Today’s update shows that in addition to maximizing the Covid-19 testing opportunity, Novacyt is delivering on its strategy to become a sustainable broad-based diagnostics business by launching new products.

NEW STRAINS

With new strains of the virus representing a threat to the vaccine roll-out programme, the company has expanded its polymerase chain reaction (PCR) portfolio to incorporate the detection of the Bristol and California variants, allowing real-time bio-informatics surveillance.

The company also announced the launch of its next generation high-throughput PCR test for Covid-19, which reduces processing time and labour cost by up to 30%.

ANTIBODY TEST LAUCH

Novacyt expects to launch its IgG lateral flow test (LFT) in the second quarter, slightly later than planned, to develop the next generation of LFTs which can detect neutralising antibodies generated by vaccination.

This will assist scientists in monitoring the effectiveness of future vaccines, as well as extending the revenue horizon for the company’s products.

ONGOING TESTING

Novacyt said it had completed early studies using its loop-mediated isothermal amplification (LAMP) technology and demonstrated encouraging initial results. This method has the potential to increase test accuracy while reducing costs.

Also, after the successful completion of the clinical trail using the company’s rapid test platforms for care homes, over 4,500 samples are now being analysed with the results expected to be announced in the second half.

Meanwhile, pharmaceutical giant AstraZeneca (AZN) has been using Novacyt's genesig ® Covid-19 test since early on in the pandemic for its internal programme of voluntary screening for asymptomatic employees in the UK and Sweden.

Around 54,000 out of 70,000 volunteers were tested by taking saliva samples rather than the usual nasal and throat swabs.

Adoption rates increased four-fold and over 90% of 1,062 employees expressed a preference for this method of testing, demonstrating the potential for mass-screening of asymptomatic patients.

ASPERGILLOSIS FUNGAL INFECTIONS

Aspergillosis is an infection caused by aspergillus fungus common in immune-compromised patients which affects around five million people worldwide aside from Covid-19 patients, according to the company.

The company’s new multiplex PCR assay panel will detect all five major aspergillus sub-types. Validation studies are expected to start soon with a potential product launch in the second half of 2021.

Numis commented, ‘today's release is a reminder of Novacyt's strong, rapid test development capabilities, which we see delivering value beyond the ongoing peak of COVID-19 testing.’

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Issue Date: 24 Feb 2021