"There are many countries where we will go to provide our test, but not to our government." That's all. In front of the analysts gathered to illustrate Diasorin's excellent quarterly report, the CEO Carlo Rosa on Wednesday avoided commenting on the outcome of the tender for the supply of serological tests announced by the extraordinary commissioner for the Covid-19 emergency. Surprisingly, the order was awarded to the American Abbott which undertook to supply 150 free kits rather than to the Italian company which enjoyed the favors of the forecast. But it takes much more these days to make Rosa gratified lose her good mood, both by the successes of the diagnostic tests developed by the group and by the advance of the stock in Piazza Affari, one of the few able to shine in a price list dominated by fear.
In the last 12 months biotech stock soars 90% approximately two-thirds in recent months, as attention gradually increased for the results of the group which closed the first quarter with a net profit of 37,3 million euros, a decrease of 6,6% compared to first quarter of 2019 but according to Jefferies, after sales 4% higher than expected. On Wednesday, coinciding with the conference call with analysts, the stock took off with a leap of 7,48%. Today, in a thoughtful market, the departure of the title it was abrupt but then recovered (-0,23%) unlike Recordati +0,32%, the other pharma stock in positive territory since January, a privilege shared only with Nexi in Piazza Affari.
To fuel the Diasorin rally, Rosa announced that the company has received the green light from the Canadian authorities for the sale of the serological test, a decision that follows the approval from the US Food and Drug Administration by a few days. Furthermore, added the CEO, "the governments of other countries, such as Belgium and Israel, are responding well to serological tests". The company will increase production capacity from 5 to 10 million tests per month to meet the demand for swabs that signal the presence of neutralizing IgG antibodies in response to Covid-19 infection. A relevant strategic contribution in the fight to contain the expansion of the coronavirus.
"Our challenge - Rosa declared in an interview with the Financial Times - is to develop a test that is just as reliable as the current ones but faster and at a much lower cost because it was developed on a simple technology". The molecular test on a proprietary platform allows, starting with the swab detection of the virus within 1,5 hours versus 6-8 hours for competing systems. In business terms, this results in incremental revenue estimates rising from the previous 5-10 million to 10-12 million per month. We expect capacity to pick up a bit and continue to build on a monthly basis.”
For the experimentation of serological tests Diasorin is collaborating with the Lombardy Region. In the hope that the Milan prosecutor's office and the Tar, brought into action by the complaint of Techno Genetics which disputes the start of the collaboration between the San Matteo hospital in Pavia and the Italian multinational without a tender, do not see negative findings. But the same Techno Genetics is the Italian subsidiary of a multinational company in Shanghai.
