Plenty of run left in Genetic Signatures

By Trevor Hoey. Published at May 11, 2020, in ASX Biotechs

Less than a fortnight ago Finfeed noted Genetic Signature Ltd’s (ASX: GSS) news that it had supplemented its existing assays to specifically identify the 2019 novel strain of coronavirus (SARS-CoV-2), the virus that causes COVID-19.

Management also noted at the time that it had submitted a formal application for European CE-IVD registration for a new real-time PCR (polymerase chain reaction).

I saw these developments as particularly significant for the company, and indeed shares in the company surged on the day the news was released.

There has been continual strong news flow from the company, as it received CE-IVD registration for its SARS-CoV-2 Detection Kit, as well as notification from the Therapeutic Goods Administration (TGA) that its EasyScreenTM SARS-CoV-2 Detection Kit has been approved to be listed on the ARTG in Australia.

Not surprisingly, this has provided significant share price momentum, and since the company first came under Finfeed’s spotlight its shares have increased from $1.10 to $2.08.

Bell Potter sees upside of 25%

Bell Potter analyst Tanushree Jain likes the story, and just last week he upgraded his price target from $1.50 to $2.60 saying, ‘’March quarter 2020 revenue of $1.8 million (up 71% year-on-year), set a new record for GSS.

‘’The increase was driven by initial sales of GSS’ COVID-19 testing kit in Australia and the European Union (under regulatory exemptions).

‘’Formal regulatory approvals in the European Union and Australia for the kit were received in April.

‘’All indications are that the three months to June 30, 2020 will be another record quarter (Bell Potter estimates revenues of $5 million), with indicative revenue for Apr’20 alone at $1.7 million.’’

Consequently, while the company’s shares have had a strong run, Hester still sees upside of 25% relative to Friday’s closing price of $2.08.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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