Shares in international diagnostics company Novacyt (NCYT:AIM) surged 25% to hit an all-time high of 585p after winning a second major contract to supply the UK Department of Health and Social Care (DHSC) with its Covid-19 testing equipment.

In the first phase of the deal Novacyt’s wholly-owned subsidiary Primerdesign will supply 300 of its polymerase chain reaction (PCR) instruments for up to six months with an initial minimum contract value of £150 million for the first 14 weeks. Depending on the outcome and demand for the products, a further £100 million could be expected for the subsequent 10 weeks.

The second phase, which is at the discretion of the DHSC, allows for the supply of a further 700 PCR instruments, related kits and support services as well as additional Covid-19 products from the company’s portfolio. The second phase could generate ‘considerably more’ sales than phase one, says Novacyt.

To put the contract into perspective, at the first-half results (17 September) Novacyt reported revenues of €72.4 million or around £62.5 million.

The company noted that it has available capacity to meet both stages of the new contract as well as continue to build its sales across international markets.

Chief executive Graham Mullis commented: ‘The ability to test multiple patients with our market leading Covid-19 kits and instruments designed to provide results in under 60 minutes will help to ensure vital NHS services can continue to function during these difficult times.’

COVID-19 ANTIBODY TEST

In a second announcement the firm said it had launched a CE-Mark approved serology (antibody) test which detects antibodies from samples of blood.

The company said the new test complements the existing portfolio to provide clinicians with the diagnostic tools to detect and differentiate between active and prior Covid-19 infections.

The new test was validated in a study using 1,673 patient samples (112 positive and 1,561 negative) and demonstrated 100% sensitivity in patients that were tested at 14 days after testing positive for the virus.

This means it accurately identified all positively infected patients. The test also demonstrated 99.4% specificity which means it correctly identified almost all of the patients who were not infected, while nine patients out of 1,561 were incorrectly identified as negative.

The company stated it has manufacturing capacity to deliver more than 3 million antibody tests per month initially and is working with its manufacturing partner to ensure this can be increased if required.

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Issue Date: 29 Sep 2020