Italy’s Only Rising Stock This Year Is a Covid-19 Test Kit Maker

(Bloomberg) --

In the European country hardest hit by Covid-19, investors are betting on a maker of quicker tests to detect the virus.

DiaSorin SpA shares are up about 3% this year and have gained 17% since the company on March 10 said that it was developing a test for the rapid detection of the novel coronavirus Covid-19. It’s the only stock in the 40-member benchmark FTSE MIB Index, which is down 30% this year, to climb in 2020.

The molecular test will give patient results within 60 minutes compared to 5 to 7 hours needed in other tests, the company said in its March 10 statement, which noted that the studies undertaken for the test support a launch by the end of the month. Last week, DiaSorin received emergency use authorization from the U.S. Food and Drug Administration for the test.

“DiaSorin moved at great speed to bring a quick, cheap and relatively easy to use test to the market,” Kempen analyst Alex Cogut said by email. The earnings impact depends on the duration of the pandemic, he said, adding that the company expects to earn 5 million euros ($5.4 million) to 10 million euros per month from its new kit. DiaSorin reported revenue of 706 million euros and Ebitda of 277 million euros in 2019.

While most of the company’s other tests are considered non-essential right now, those are likely to just be delayed into the second half rather than becoming lost revenue, Cogut said.

French peer BioMerieux is also benefiting from the chase for quicker testing tools for the virus, with shares up 29% this year. The company said on Tuesday it got emergency use authorization from the FDA for its BioFire Covid-19 test.

©2020 Bloomberg L.P.