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The Armchair Trader first picked Novacyt (LON:NCYT) as a stock with something special to offer back in February. At the time we were still some way off lockdown, but we were already anticipating that there would be plenty of emphasis on the development of an effective test for COVID-19. Since then the Novacyt share price continued to rocket, reaching a high of GBX 5.98 before sliding to an established trading range around the 2.60-2.70 mark.

However Novacyt shares seem to be picking up speed again, although the growth trend has been slower over the course of the summer. The demand for effective testing for COVID-19 has not gone away – despite early optimism, the world is still waiting for an effective vaccine. Without one, solid testing is going to be an important tool in governments’ strategy for containing the virus.

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Novacyt has benefited from the rise in its stock, as the company can now re-jig the way it manages its R&D. It is also looking at new testing products, like the ability to test for different types of influenza virus alongside COVID. We could be in for some tough times during the new flu season in the northern hemisphere, and the ability to distinguish between COVID and more prosaic flu viruses, could be essential.

Synairgen making great strides

Synairgen (LON:SNG), another stock we have been following closely, has been making great strides with the development of what is now being termed SNG001, an inhaled formula designed to help treat the symptoms of COVID. Unlike Novacyt, which is focused on the difficult field of testing, Synairgen is seeking to aid patients with the virus, and save them from potentially requiring a ventilator.

This could be critical for survival chances, as anecdotal evidence gathered by The Armchair Trader from medical professionals in the UK, indicates that the survival rate for ventilated patients is not very good at all.

Synairgen reported positive results last month for its Phase II trial which used existing hospitalised patients. Its drug has demonstrated very significant success in helping breathing in patients with COVID. All patients in the study who used the treatment survived, although sadly this was not the case with patients using the placebo.

The inhaled treatment uses interferon beta, a naturally occurring antiviral protein, which supports the lung’s efforts to neutralise the virus. This product has actually been in development since 2018, but is not achieving more significance in the light of the current outbreak. However, there is still plenty more testing to do.

Synairgen shares have enjoyed similar massive success to Novacyt. Unlike Novacyt, they are currently not far off a high of GBX 51, but have slipped in recent days to trade at GBX 38.

We covered both companies early in the pandemic, and feel both have some very solid products to offer the medical profession in the ongoing battle against the coronavirus. The value of these products will go up the longer a widely embraced vaccine takes to develop.

Right now that vaccine still seems a long way of, with some very serious questions to be answered as to how effective virus antibodies are in sticking around in the bloodstream.

Both companies are a LOT more expensive to buy into than they were in February, although Novacyt has come off more. Novacyt remains the more expensive stock to buy into relatively speaking, but looks like it still has more potential upside. Investors are still waiting on further results and approvals for SNG001, but the July trial data looks very solid.


Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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This Post Has One Comment

  1. SNG001 has been in development since 2009 not 2018 & the current SP as I type is 204 not 38

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