A parade of diagnostic test makers could record record revenues as Americans are tested for the rapidly spreading omicron variant of Covid-19.
Abbott Laboratories, Quidel and Becton, Dickinson and Company were among the companies named in a report this week from investment bank William Blair, which cited a “perfect storm” of events, including vacation travel, the wave of omicron variant Covid-19 cases and continued spread of the coronavirus that will contribute to high demand for Covid-19 tests.
The report came a day before President Joe Biden announced that the United States plans to distribute 500 million home Covid-19 tests in January due to the increase in cases of omicron variants.
“Manufacturers of Covid-19 tests (both molecular and antigenic) are expected to continue to deliver massive, potentially record-breaking revenue and cash flow as demand remains high for these high-margin products,” wrote analysts at William Blair in their December 20 report. âUnlike the winter of 2020-21, 2021-22 is showing signs of a significant flu season starting to gain traction exactly around the time of taking Omicron and a massive wave of vacation travel. We believe this portends a possible perfect storm of respiratory illnesses that could potentially take the number of tests to levels we’ve never seen before. ”
Already, testing has been a huge activity for diagnostic companies. Abbott, for example, said global sales related to Covid-19 testing were $ 1.9 billion in the third quarter of this year. In an October call to discuss this third quarter report, Abbott chief executive Robert Ford said the company had “shipped more than a billion tests since the start of the pandemic.”
Abbott sells a diverse portfolio of tests, including BinaxNow, a home test that gives results in 15 minutes and can be administered at home, schools, workplaces and other sites. Such a test, which always requires a nasal swab by a healthcare professional, is akin to a pregnancy test in its use of “lateral flow technology” and is about the size of a credit card.
Demand for diagnostic tests like Abbott’s BinaxNow or Becton Dickinson’s Veritor is causing supply problems in pharmacies and outlets. For example, Walgreens this week placed a limit on purchases of rapid home tests due to what the drugstore chain has called “incredible demand.”
âDue to the incredible demand for rapid home testing, we have implemented a purchase limit of four items on COVID-19 home testing products at our stores and digital properties in an effort to help improve inventory while continuing to work diligently with our supplier partners to best meet customer demands, âsaid Walgreens spokesperson Emily Hartwig-Mekstan.
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