The Novacyt (LSE:NYCT) share price really started getting traction back in the early part of 2020. It means a £12,500 investment in the Anglo-French pharma group at the turn of the year would today be worth £773,125.
If you got in early, it’s probably been one of the best performers of your investing life.
Where it started
Don’t beat yourself up too much if you missed out. In January 2020 there was little market excitement around Novacyt.
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It certainly didn’t have multi-million pound recurring contracts with almost every government on the planet. It was just one of those small UK-listed pharma companies struggling to make its voice heard.
It hadn’t reported a profit in any of the previous five years. It had a market value of less than £10m (that’s up to £550m today).
At the time, its molecular diagnostics division, Primerdesign Ltd, was reporting contracts for identifying shellfish health in the French food supply chain. That’s not the kind of thing that gets investors hot under the collar.
Novacyt share price goes boom
On 31 January everything changed. When the Covid outbreak happened, Novacyt spotted its chance. Primerdesign used its molecular testing expertise to design and launch a new test for the novel coronavirus.
The orders started flying in by the tens of thousands. Then the hundreds of thousands. Primerdesign’s coronavirus test won a CE-Mark, the safety standard for health products in the European Economic Area.
No wonder that by the end of February CEO Graham Mullins was “extremely pleased with the commercial interest shown in our test to date“.
And as Primerdesign turned this interest into huge sales, the Novacyt share price rocketed. India, Argentina, the Philippines, and the coveted US market all fell into line.
Is Novacyt a buy in 2020?
Investors like me see the Novacyt share price having risen over 6,185% and are likely to jump to one conclusion. That prices have already risen so much, there’s little value left in me buying in now.
But what do the financials show?
Company accounts for the first half of 2020 show a company now with a very healthy €46m profit. That’s compared to a €1.2m loss for the first half of 2019. Revenue surged tenfold over the same period, from €7.2m to €72.4m.
Primerdesign has rapidly expanded the suite of products available to businesses and governments to include PCR two-gene target tests for Covid-19, trademarked exsig Covid-19 direct testing kits and many more.
And Graham Mullins has told the market that its “transformational” revenues will continue long into 2021.
So what now?
For those of you still reading, the question you want answered is where there’s still value in the Novacyt share price today? I’d say yes. Just because a share has risen a lot doesn’t mean it can’t continue. And especially so with all its extra product lines on offer.
Just look at Astrazeneca. Between the start of 1995 and the end of 1996, the FTSE 100 multinational saw its share price rise nearly 100% from 850p to 1,607p. But if I’d sold then, I would have missed out on another 425% gain to today’s 8,440p price.
If you’re generally more risk-averse and you favour FTSE 100 dividend payers, this might not be the share for you. But fancy a medium-term punt? I’d go for it.
