The battle to extinguish the coronavirus is nowhere near the end. Cases have yet to be bought under control in many states. California is among the worst hit; Last week a new single-day death record was set, and the state’s reopening has been rolled back.
Apart from the obvious need to contain the virus’ spread, comes the need for as much testing as possible.
Diagnostics specialist Biocept (BIOC) has risen to the challenge. Being San Diego based, the small cap is perfectly located to meet demand in the Golden State.
Over 100,000 tests are conducted each day in California. Although cases have modestly declined over the past week, the positivity rate is still over 6%, which is higher than the WHO’s 5% threshold for sufficient testing and indicates the need for additional tests.
Maxim analyst Jason McCarthy notes that in addition to being able to provide the much needed testing kits, the venture should prove beneficial to Biocept’s balance sheet.
“Biocept is working to increase its testing supply which comes at a key time as the US is facing a testing bottleneck with tests taking as long as 7 days to turnaround,” said the 5-star analyst, “COVID-19 is looking like it could drive growth for Biocept which we have pointed towards in prior notes. The company likely generated ~$700k since late June, and has been testing an increasing number of specimens each week, which should place them on track to offset slowed revenues around oncology testing due to the pandemic and potentially even drive growth.”
Biocept has already received over 7,000 COVID-19 testing samples. The $700,000 McCarthy points out are on account of a $100 Medicare reimbursement for each test.
Over 12,000 collection kits have been sent out since distribution begin in late June. Biocept has another 18,000 tests ready to go and has ordered components to produce another 20,000 collection kits. Based on present collection kit inventory, Biocept could boost the balance sheet by an additional $2.3 million.
Accordingly, McCarthy rates Biocept a Buy along with a $1 price target. This figure implies 12-month upside of 12% from current levels. (To watch McCarthy’s track record, click here)
Over the past 3 months, only one other analyst has posted a review of Biocept’s prospects. The additional Buy provides the diagnostics specialist with a Moderate Buy consensus rating. Investors could pocket a 71% gain, should the $1.53 average price target be met in the year ahead. (See Biocept stock analysis on TipRanks)
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