United Kingdom

MARKET REPORT: Coronavirus testing race lifts shares in pharmaceutical firms

After weeks of the pandemic affecting Britons' daily lives, testing has moved to the front of the political agenda. 

But pharmaceuticals companies have been hard at work on the problem of testing for weeks – and in some cases, for months. Investors yesterday cheered some of the latest breakthroughs announced by AIM-listed medical minnows that have punched above their weight. 

Shares in Novacyt shot up 20.2 per cent, or 43.5p, to 258.5p after the World Health Organisation approved its Covid-19 diagnostic test to be procured by UN agencies. 

Novacyt, which developed the tests at its Primerdesign division in Southampton, is supplying a 'growing number of hospitals' in the UK and overseas, where it has been given the green light from regulators in countries such as France and the US. 

Staff are 'working all hours', says chief executive Graham Mullis. In addition, it has inked a deal with pharma giants Astrazeneca (down 0.4 per cent, or 29p, to 6971p), Glaxosmithkline (down 1 per cent, or 15.4p, to 1499.4p) and the University of Cambridge to collaborate on a new facility as the Government seeks to ramp up testing. Novacyt shares are nearly 20 times higher so far this year, having started 2020 at 13p. 

Another AIM group, Avacta, soared 80.2 per cent, or 19.25p, to 43.25p after it partnered US group Cytiva to make a rapid test for coronavirus screening. It is already making the substances that can determine if someone, even if they are asymptomatic, has the disease. 

The partners should be able to produce a strip-test – similar to a pregnancy test – that would use a respiratory sample such as saliva to diagnose patients in minutes. Novacyt and Avacta's rallies were at odds with the rest of the stock market, however, as a twoday rally fizzled out. 

The FTSE 100 fell 0.47 per cent, or 26.72 points, to 5677.73, after the EU's finance ministers failed to agree steps towards a bloc-wide coronavirus recovery plan. 

Josh Mahony, senior analyst at online trading platform IG, said the squabbling was the 'talk of the town', with European indexes including France's Cac and Germany's Dax falling around 1 per cent. 

The FTSE 250 rose 1.89 per cent, or 293.87 points, to 15,862.83. Oil prices mostly treaded water, hovering around $32 a barrel ahead of a virtual meeting between Saudi Arabia and Russia. 

The countries are said to be keen to make production cuts if the US joins in. Coronavirus continued to cause havoc for companies across sectors, with DIY and building merchants group Grafton – down early on but recovering by 3.3 per cent, or 20p, to 620p – the latest to temporarily chop executives' pay by 20 per cent and request suspending its bonus scheme. 

But Jefferies brokers were keen to find some silver linings, with analysts upgrading Asos to 'buy' as they deemed it likely to gain market share while High Street shops are shut. 

Asos, which has raised £247m to boost its books, rose 28.3 per cent, or 440.5p, to 2000p. Taylor Wimpey was up 3.9 per cent, or 4.9p, to 132.1p as investors praised its £5m hardship fund for selfemployed subcontractors to tide them over while they wait for cash from the Government's support scheme. 

It will pay £600m a month for three months in interest-free loans to around 2,750 workers. 

There was a mixed response to boardroom changes, with Drax up 5.6 per cent, or 9.9p, to 185.5p after it made the head of its generation business redundant. 

But Aston Martin shares slid 14 per cent, or 11.9p, to 73.3p, as Vikram Bhatia, the car maker's finance boss for most of 2015, returned as interim finance head.

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