finnCap throws its support by COVID-19 testing stocks, here’s 3 reasons why

As news of another promising COVID-19 vaccine candidate was released, specialist AIM broker finnCap looked to throw its support behind a number of stocks with a focus on the testing opportunity.

Within a broad life sciences update, finnCap noted that “While these results are highly encouraging, we reiterate that they do not diminish the urgent need for COVID-19 treatments and testing, which will still be required for years to come, and we outline why we consider Synairgen, Avacta, genedrive, Omega Diagnostics and Open Orphan to offer good buying opportunities.”

The three reasons why its optimistic on COVID-19 testing stocks

  1. A number of unknowns. It notes that full results from the trials have not been released yet and as such have not been peer reviewed.
  2. Logistical challenges. A roll-out campaign is presumed to be slow with multiple doses needed – one month apart and each batch needs to be quality assured before it can be used. Concerns about the speed of development may also limit uptake.
  3. Herd immunity challenges. It will take years to develop this even with a successful vaccine the broker notes, adding that demand for tests will outstrip supply into 2021 and beyond.

Concluding, they rather bluntly add:

“Overall: a vaccine roll-out will take many months, while cases, hospitalisations and deaths continue to surge and, as such, little has changed with regards to the COVID-19 opportunity, despite this very positive news.”

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