If you bought into Genedrive shares (LON: GDR) at any time in the last couple of years, the continued decline may seem worrying. The small-cap UK-based diagnostics group has, since 2020, experienced rapid rallies, followed by sustained downside.
Since the highs of May 2020, the Genedrive share price has slumped, which, while bad news for those left nursing losses, may be seen as good news for those considering stepping in at these levels to open a new position.
Make no mistakes, the firm is still a high-risk proposition. However, if some of the elements of the business plan that caused such excitement previously do come back into play, there might once more be eye-watering share price gains in the pipeline.
With all this in mind, we need to know about the latest news coming off the Genedrive pipeline, and what the GDR stock price forecast for next year and beyond looks like.
Genedrive News
June: Genedrive acknowledged that the UK’s National Institute for Health and Care Excellence (NICE) has recommended in draft guidance that CYP2C19 genotyping should be used to guide clopidogrel use after Ischaemic Stroke or Transient Ischaemic Attack and that the Genedrive CYP2C19-ID test should be used as the test of choice for point-of-care strategies.
May: Genedrive said it has conditionally raised total gross proceeds of approximately £2.03 million through an Open Offer and a further circa £1.89 million through a REX Offer. As a result, taking into account the amounts raised in a Firm Placing and the Conditional Placing, GDR said it conditionally raised £6 million, which was the required minimum amount needed to be raised in order for the Fundraising to become unconditional.
May: Genedrive announced it had received orders worth over £100,000 from five further UK hospitals for its Genedrive MT-RNR1 rapid genetic testing kit.
May: Genedrive said a key milestone was met in The Development and Validation of Technology for Time Critical Genomic Testing programme for its CYP2C19-ID kit. The programme passed the patient numbers required for a subsequent submission for an in vitro diagnostics CE certification, which is still anticipated in early 2025.
Where Will Genedrive’s Stock Price Be in 12 Months?
The Genedrive Stock forecast is heavily influenced by the hit-or-miss nature of its products making it to market.
The share price rise and fall reflect the fact that such products are required to undergo formal clinical qualification and regulatory filing, and the rate at which these are completed can be hard to predict.
The balance sheet is not great reading. It is yet to turn a profit and revenues are minimal at best. It is burning through its cash pile, although it recently raised £6 million.
One positive to note is that in May GDR secured orders worth more than £100,000 from five more UK hospitals for its Genedrive MT-RNR1 rapid genetic testing kit.
Despite the company’s confidence, if it keeps haemorrhaging cash, then shareholder interests could wane further.
Who is Genedrive?
Genedrive’s core operations involve developing rapid and low-cost molecular diagnostics platforms. These are used to identify and treat a selection of infectious diseases. It also has other divisions that involve human genotyping, animal health and pathogen identification. The firm uses cutting-edge technology and, true to its academic roots, is still based at the University of Manchester.
The 2016 name change from Epistem Plc to Genedrive Plc represented a shift in approach as the firm looked to exploit the commercial applications of its range of new products.
When COVID-19 hit in early 2020, the firm was quickly identified as being in a position to meet the dramatic upward shift in demand for the kinds of products needed to manage the global pandemic. The firm’s Genedrive® 96 COV19-ID Kit offered the hope of ground-breaking technology being used to offer easy-to-use, reliable, and rapid testing for COVID-19.
Red tape got in the way of Genedrive’s meteoric share price rise, and the stock has failed to breach its 2020 highs since.
Genedrive Long-Term Forecast
It is clear that Genedrive is very much a ‘buyer beware’ situation, but given the continued share price decline, it may attract some investors looking for a bargain.
Digging down into the company’s most recent report, the company said it is “encouraging to see how we have been able to generateGenedrive®MT-RNR1 kitsales both inside and outside the UK.”
There are obviously concerns about Genedrive and its shares, despite the company remaining confident. Whether its recent positives are enough to sustain it in the long run is another question. Nevertheless, investors interested in buying GDR shares should be extremely cautious and understand the risks of the business they are buying into.
Is Genedrive a Good Buy?
There are a particularly large number of ‘unknowns’ in play, and investors who don’t happen to be world-leading students of many different areas of medical diagnostics are largely reliant on others being willing to interpret the medical data into more manageable terms.
A decision to buy Genedrive is a long way from making that call because you visited a high-street shop and decided that it being packed full of new customers was an adequate buy signal.
Other risks include the size of the firm. Genedrive may have had a share price in the region of nearly £3 during the endemic surge, but it is, in essence, a small-cap penny stock, and those have particular characteristics that investors need to be aware of.
