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magazineNovacyt shares buffeted by positive vaccine news
Novacyt (NCYT:AIM) 670p
Gain to date: 6%
Original entry point: Buy at 632p, 8 October 2020
Shares in Novacyt (NCYT:AIM) have dropped by a third in value on news that the Pfizer-BioNTech Covid-19 vaccine candidate was found to be 90% effective against the virus without any evidence of major safety concerns.
To put the latest development into context, Shore Capital analyst Adam Barker described the news as a ‘remarkable feat and a testament to the swift mobilisation, expertise and tireless efforts of the global scientific community’.
In the short-term the impact on testing volumes for Novacyt is not affected by the vaccine announcement according to broker Numis which has kept its earnings forecasts unchanged.
The longer-term attractions of Novacyt are predicated on the increasing strategic importance of diagnostic testing and the company becoming a key partner to the NHS. In this regard Numis notes that Novacyt is ‘well positioned’ for the Governments’ £22 billion two-year National Microbiology Framework project which was published last week.
SHARES SAYS: With more vaccine-related news expected over coming weeks the shares will likely remain volatile, but the longer-term attractions remain in place.
Still a buy.
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