COVID-19 TESTING SECTOR DEMAND SET TO CONTINUE AMID VACCINE ROLLOUT

COVID-19 TESTING SECTOR DEMAND SET TO CONTINUE  

AMID VACCINE ROLLOUT 

Amid the continued high demand for testing and staggered vaccine rollout, the diagnostics industry, which was valued in 2020 at $17.2bn-$19.8bn, is set to rise further in 2021 

London 21 January 2021 – The diagnostics sector will continue to see growth in 2021 as demand for COVID-19 testing continues to surge. It has been suggested that to ensure effective disease control, the UK alone would require 120m tests per month. Global demand exceeds supply, providing opportunities for existing diagnostics providers and newcomers alike. The diagnostics sector remains a high-growth area, at a time when most other sectors are experiencing disruptions due to the pandemic. 

These are the findings of finnCap’s new quarterly Life Sciences sector report, ‘Rude Health: COVID-19 Diagnostics’. 

COVID-19 testing is likely to peak in 2021 but will continue to see strong demand into 2022 and beyond as a result of the logistical hurdles in vaccinating the global population as well as the uncertainty around how long vaccine jabs provide immunity and their effectiveness against new COVID strains. 

The report looks at the different types of COVID-19 diagnostic technologies and the companies utilizing them. PCR testing is the most common type of testing, providing the highest levels of accuracy, but carries the downsides of being expensive and requiring experienced professionals, with results that can days to process depending on the lab. Companies offering or developing PCR tests include Novacyt, Yourgene and genedrive.  

Lateral Flow Diagnostics, on the other hand, can provide cheap and rapid results (within 15 minutes) and can be administered without training, but are not as accurate as other technologies. Companies offering/developing COVID-19 lateral flow diagnostics include Avacta, Mologic-Omega Diagnostics and Immunodiagnostic systems. 

The report also highlights two less well-known processes – the ELISA (enzyme linked immunosorbent assays) being utilised by companies such as EKF Diagnostics and LAMP (loop mediated isothermal amplification) being ultilised by companies such as OptiGene.  

The demand for testing is so high that all processes, regardless of their specific advantages and disadvantages will continue to be needed over a busy 2021. FinnCap highlights AIM listed and private companies, Avacta (AVCT), Novacyte (NCYT), Omega Diagnostics (ODX), genedrive (GDR) and OptiGene among them, and discusses the technologies they have employed and the tests that they have developed or are developing.  

In addition, the report also looks at the performance of the AIM life sciences sector, which outperformed larger-cap and health indices and other sectors in 2020, boosted by COVID-19 testing stocks, which will place it in a strong position for 2021. £1.039bn was raised for the life sciences sector on the AIM Index over 2020, a leap on the £242mn raised over the same period in 2019. 

Arshad Ahad, Research Analyst, Life Sciences, at finnCap, commented: “The COVID-19 diagnostics sector was at the forefront of international attention in 2020 as the primary weapon to fight the pandemic. The encouraging progress on vaccines has prompted fears over the sustainability of this market; however, we believe these fears are unwarranted. We believe the market has yet to peak and will do so in 2021, but will remain strong into 2022 and beyond. Overall, it is likely that COVID-19 will be a part of our lives for years to come and may even be a perpetual presence – and as long as this remains the case, COVID-19 testing will be an important tool for keeping the disease in check and avoiding outbreaks.”