Key points:
- Genedrive has achieved a CDTA for its covid test
- This now allows sales – bulk and direct – in the UK
- What matters now is how many sales are actually generated
Genedrive (LON: GDR) shares have risen 9% this morning in London on the back of CTDA approval. The big question is whether this means there is more to come from Genedrive shares or not.
The thing to understand is that the CTDA approval is entirely different from the CE Mark application which drove Genedrive up to 70 pence the last time around. There could therefore be more – or possibly less – excitement this time around.
Genedrive, as we know, is a health care testing company. As it puts it “near patient molecular diagnostics company”. Obviously, when Covid hit then Genedrive, like some number of others, was in prime position to be able to begin and then make the testing kits which were being bought in their hundreds of millions. There was also substantial government support for doing that designing and making.
This didn't quite work out, unfortunately. The time taken to get the test to market meant that the vast government orders were missed out upon. Oh well, that's the sort of thing that can happen. But what then created interest in Genedrive shares was their announcement that they had applied for a CE Mark. This allows such tests to be sold right across Europe. But at that point, it's still necessary to find buyers of course.
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As we've remarked before governments tend to want to buy their own local production which made Gendrive selling into Europe a little difficult. So again, none of those mass contracts did arrive. The attempts to sell into Europe are now direct, with all of the costs that involves. This is largely why the share price has slipped back from that 70 pence to near the starting point of 23p.
We do need to note though that the CE Mark doesn't involve any validation of the test itself. It's purely a notification to the authorities. This is what makes it so different from the CTDA approval just gained.
CDTA is the UK's system. This requires (usually at Porton Down) actual testing of the test kits. Confirmation that it does work as advertised, in a manner that the CE Mark doesn't. It also means that – now the emergency measures are over – that the Genedrive test is approved for sale in the UK and possibly to the NHS and other large organisations.
As with the CE Mark it doesn't guarantee any such sales but it does make them more likely – for without it they're most unlikely.
So, what we've not got is that Genedrive has a covid test that it can sell across Europe (the CE Mark) even if that's a little difficult and expensive to actually do. And with this CDTA approval it can sell in the UK, both direct and also in bulk. That's why the shares have been up as much as 9% this morning.
The big question is whether this will continue. The answer to that will likely lie in what we get told about sales performance as we go forward. In this immediate future it'll be what folk think such sales numbers are likely to be. It's possible to take either view – now it's good to go there will be substantial sales. Or, boat missed, there we are.
