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Summary
- The unprecedented pandemic has once again diverted the spotlight on the healthcare sector
- Companies are escalating the production of diagnostic tests and therapeutics in the race to successfully recognise and treat patients of Covid-19
- Many experts and global research analysts believe that spending on health will rise as governments will be building more resilience into their health systems
The global economy and the financial markets have witnessed the impact of the Covid-19 pandemic and the lockdown it triggered. However, there is still no clarity on the more profound effect that it is having across the businesses and the industrial sectors. During this unprecedented global pandemic challenge, the healthcare sector has been at the forefront. The sector has risen to the occasion, by offering a helping hand to the government for all the support it needs, be it testing support, preparing isolation beds for the treatment of Covid-19 positive patients, or deploying equipment and staff in identified nodal hospitals.
Has the Healthcare Sector Benefitted from the Pandemic?
In the light of the ongoing disruption spurred by the Covid-19 pandemic, most of the companies are adopting new business models and philosophies for better management of potential outbreaks in the future. Nations with colossal healthcare spending are probably going to profit by this pandemic. Companies are escalating the production of diagnostic tests and therapeutics in the race to successfully recognise and treat patients experiencing this exceptionally transmittable respiratory infection. In the long run, the organisation which is successful in developing and launching vaccine for coronavirus would emerge as the leader. However, a commercially viable vaccine is still months away. Leading pharmaceutical companies are receiving pressure from governments to quicken the human preliminaries of antibody.
Besides, other companies which are probably going to benefit from this pandemic are those who are engaged in manufacturing ventilators, hospital beds, face masks, safety gears, and other medical equipment. However, with various nations restricting the export of medical equipment, there has been a significant impact on the global supply chain. On the other hand, it has a positive impact on the domestic production continuing to surge with several entrepreneurs offering to manufacture clinical apparatuses and gear.
What Happens When a Vaccine is Developed?
The pandemic has diverted the spotlight on the healthcare sector. Some healthcare companies have also seen a decline in their activities amid cancelled surgical procedures and non-essential appointments. However, companies making the equipment used to treat Covid-19 patients have seen orders rise sharply. Testing and diagnostics specialists have also seen a massive upsurge in demand for Covid-19 testing that offset the decline in tests for other illnesses. Meanwhile, hopes for a return to normal conditions are ultimately pinned on finding a vaccine or treatment. There are over 100 potential vaccines in development, and existing treatments for other diseases are being trialled to see if they may be effective against the virus.
But what happens if a vaccine is found? Would the current period of growth come to a sharp halt? The areas of focus might change, but there are reasons to think that, even before Covid-19, the sector was on the cusp of a period of rising demand, innovation, and potentially higher growth.
Many experts and global research analysts believe that spending on health will rise as governments will be building more resilience into their health systems. Just as the banking sector had to increase buffer against risk after the global financial crisis, the health sector will be expected to do the same after the pandemic. Even when the current crisis has passed, it is estimated that the demand is likely to remain robust. Importance of being prepared has been paid attention to because of the pandemic. As such, it is expected that the companies producing life-saving equipment and drugs will continue to see elevated demand relative to the pre-crisis period.
Lockdown has seen a long-overdue revival in the fortunes of the UK's innovative small-cap life sciences companies with some eye-catching movements. In context with the above discussion, let's focus on the performance of some of the best small-cap healthcare stocks.
Synairgen PLC
Incorporated in 2004, Synairgen PLC is a holding company, engaged in the drug discovery and development of therapies for respiratory diseases, focusing on areas such as severe asthma, chronic obstructive pulmonary disease (COPD), etc.
Synairgen PLC (LON:SNG) stock was trading at GBX 247.00 on 20 August 2020, at 9:32 AM, down by 0.80 per cent from its previous close of GBX 249.00. The 52-week low/high price was GBX 5.88/249.00. It was having a market capitalisation (Mcap) of £372.09 million. The volume traded at the time of reporting was 185,946. The company recorded a positive return on price, which was 4,138.30 per cent on a YTD (Year to Date) basis.
Novacyt SA
Based in France, Novacyt SA is a company that develops, and markets solutions dedicated to the field of liquid-based cytology and molecular biology.
Noavcyt PLC (LON: NCYT) stock was trading at GBX 305.00 on 20 August 2020, at 9:38 AM, up by 1.33 per cent from its previous close of GBX 301.00. The 52-week low/high price was GBX 6.50/491.00. It was having a market capitalisation (Mcap) of £212.59 million. The volume traded at the time of reporting was 109,323. The company recorded a positive return on price, which was 2,050.00 per cent on a YTD (Year to Date) basis.
Okyo Pharma Limited
Okyo Pharma Limited is a biopharmaceutical company, operating in research and development of biotechnological, and pharmaceutical products.
Okyo Pharma Limited (LON:OKYO) stock was trading at GBX 15.25 on 20 August 2020, at 9:45 AM, down by 12.79 per cent from its previous close of GBX 17.20. The 52-week low/high price was GBX 1.25/18.00. It was having a market capitalisation (Mcap) of £115.68 million. The volume traded at the time of reporting was 395,339. The company recorded a positive return on price, which was 911.76 per cent on a YTD (Year to Date) basis.
Avacta Group PLC
Avacta Group plc is a biotechnology company; focusing is on its proprietary Affimer technology, an engineered alternative to antibodies that has application in Life Sciences for diagnostics, therapeutics and general research and development.
Avacta Group PLC (LON:AVCT) stock was trading at GBX 175.00 on 20 August 2020, at 9:51 AM, up by 2.64 per cent from its previous close of GBX 170.50. The 52-week high price was GBX 14.00/202.00. It was having a market capitalisation (Mcap) of £424.81 million. The volume traded at the time of reporting was 1,120,776. The company recorded a positive return on price, which was 821.62 per cent on a YTD (Year to Date) basis.
Byotrol PLC
Byotrol plc is a United Kingdom-based company, engaged in the development, patenting, licensing and sale of antimicrobial products and technologies for business and consumer use.
Byotrol PLC (LON:BYOT) stock was trading at GBX 9.33 on 20 August 2020, at 9:53 AM, up by 7.49 per cent from its previous close of GBX 8.68. It was having a market capitalisation (Mcap) of £38.42 million. The volume traded at the time of reporting was 1,412,232. The company recorded a positive return on price, which was 402.90 per cent on a YTD (Year to Date) basis.
Conclusion
The healthcare sector continues to adjust its strategy with the rapidly evolving situation. Long-term consequences of the Covid-19 are expected to be embraced by the healthcare industry. Major players concerned with the healthcare sector will have to undergo crucial healthcare reforms once the crisis recedes. Technological advancements cost control, and more prominent access will be a vital part of healthcare reforms in the foreseeable future.
