Thread by @TaylorQuant

Major flex by Novacyt today in response to ridiculous market conditions.

Decentralised testing flex.
Centralised testing flex.
LFT flex.
Validations flex.

Non-covid roadmap in Q2 will get the hype train moving shortly too.

#NCYT #ALNOV #NVYTF

londonstockexchange.com/news-article/N…

As always with a Novacyt infodump it takes weeks for the gravity of it to settle. All this tech will be realised in 2021+ in terms of revenues and growth. But it's all in there.

Initial thoughts?

LFT modification to 'extend the revenue horizon for COVID-19'.

Many antibody LFTs on market simply haven't been selling. Uptake isn't there, especially in the UK. The requirements for these have changed, and the major rollout won't be until we have greater vax numbers.

Novacyt's LFT tweak for neutralising antibodies wisely is isn't specified but means talks are going on about what 'exactly' is needed, when, and how much in 2021 and 2022.

This is in line with Roche's comments end of Jan about extending COVID-19 revenues post 2021 by varying capacity from peak PCR testing, into multiplexes, antibody testing etc.

2. COVID-HT is the major surprise here. Many of us thought that centralised lab testing was a short, but lucrative windfall for Novacyt, but it appears they're going for the centralised big players here with this high-throughput workflow.

If you're not familiar with it, it's what the RNS says - a quick turnaround test for labs using automated kit - for some of labs that can process 1000s per day. DARPA grade, but was only available in AstraZeneca's lab, until now it seems.

They've identified a competitive edge and will push it out.

This is big. If Novacyt can prove that they can handle more centralised labs, with a better test than Perkin, Thermo Fisher, Randox etc then PCR revs will be much better than expected, but beyond that it's a USP flex.

Also huge potential for OEMs here if the larger players think it'll save them money/time across their labs. Unfortunately OEMs are rarely uncovered although that's @PrimerDesign's business (they design Primers and for anyone), so sales figures will do the talking later.

Aspergillus - you can see this play already.

It's a USP flex for the Q32.

Q32 now does three multiplexes:
WinterPlex
VariPlex
Aspergillus

Is there a better setup for decentralised testing at health bodies or hospital wards than this now anywhere?

And PROmate going 2-gene.

So you can take all of that and place it in markets, that require that for re-imbursement.

Also secures the system against any potential mutations on the 1 gene. But to date the 1-gene choice is the most robust test.

Validations are on point.

These are how you get your tests past PH committees. These studies may have dragged on, but it's essential they were done and at scale. It's how Novacyt places themselves as a leader. Excellent work by @PrimerDesign, QMU and #AZN here.

What do we want to see next?

Well more tech like aspergillus panels. Ones that make the Q32 an essential, no-brainer choice. Sure you can can buy this tech for COVID-19, but what do you do after that?

That's the question for labs now.

Buy some tech that's purely for COVID-19 or kit yourselves with flexible tech for a range of screening?

And that's the battleground play. Won't be easy, Novacyt needs to maintain this pace, and Thermo etc are definitely watching this space

Earnings calls made that abundantly clear. They all want to get their instruments into as many decentralised settings as possible.

To do that now though - you'll need to show post COVID-19 diagnostics ranges that work on that machine, and a public health need for those ranges.

This drive works best while governments are backing certain health campaigns.

So for Novacyt watch them move exactly to the tune of what governments are campaigning for politically, be it ending some STD or whatever.

And that test will work in a Q32 or Q16.

LAMP test, nice to develop and get to market. Can be good incremental revenues there in low income countries or if it becomes the go-to for surge testing later. Don't think anyone was entirely sold on this being a major revenue stream and looks like Nova aren't either.

What they didn't flex was their new DNA Analysis / Mass Spectometry instrument by IT-IS. This is a non-covid play and has already received a government grant through DTI.

So more to come that they're keeping under wraps, can't complain about them protecting commercial interests

All about Q2 now isn't it really - the long term growth roadmap and how they'll present it.

Pretty sure many of us are dreaming that it's presented as a Prospectus.

And what that would mean *ahem*.

For the immediate road ahead though - still all about these lingering deals.

Super pleased with this update.

The more they R&D like a major diagnostics company, the more they'll get treated like in on the markets in time.

Stunning work Novacyt.