Please ensure Javascript is enabled for purposes of website accessibility

Why These 4 Coronavirus-Focused Stocks Are Soaring Today

By Keith Speights - Mar 5, 2020 at 12:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These companies have different products related to the coronavirus outbreak but share one thing in common: Their stocks are all rising.

What happened

Several stocks for companies focused on diagnosing, treating, and preventing the coronavirus disease COVID-19 were soaring on Thursday. Shares of GenMark Diagnostics (GNMK) were jumping 25.8% higher as of 11:32 a.m. Co-Diagnostics (CODX 5.50%) wasn't far behind, with the stock up 20.4%. Shares of Alpha Pro Tech (APT 1.61%) were climbing 7.2% higher after rising as much as 15.9% earlier in the day. And shares of BioCryst Pharmaceuticals (BCRX 3.35%) were up 7.4% after vaulting as much as 20.2% earlier today.

There were different catalysts for each stock. GenMark continued to ride momentum from its news on Monday that it had shipped its first test kits designed to detect the SARS-CoV-2 novel coronavirus. Co-Diagnostics announced earlier on Thursday morning that domestic and international demand was surging for its novel coronavirus detection kits. 

Alpha Pro Tech didn't announce any new developments this week, but the company has ramped up production of its face masks that protect against viral infection and continues to benefit from heightened investor attention. Meanwhile, BioCryst reported better-than-expected fourth-quarter results before the market opened on Thursday.

Female healthcare professional covering her face with a mask and holding a vial of blood labeled coronavirus.

Image source: Getty Images.

So what

There's no question that the coronavirus outbreak will boost sales for GenMark, Co-Diagnostics, and Alpha Pro Tech. It's a different story for BioCryst, though. The company's experimental antiviral drug galidesivir has shown promise in treating viruses, including coronaviruses, but the drug hasn't been proven to be effective in treating COVID-19 at this point.

So far, though, we don't know exactly how much additional revenue GenMark, Co-Diagnostics, and Alpha Pro Tech are making as a result of the coronavirus. Without having more concrete information, it's hard to know whether the tremendous recent gains for these stocks are fully warranted.

It's also impossible to know how long the coronavirus will remain a major concern globally. Other viruses have caused serious worries in the past but disappeared relatively quickly from headlines.

Now what

The smartest thing for investors to do with each of these healthcare stocks is to focus on their overall business prospects instead of only on their potential related to the coronavirus. However, for three of the stocks -- Co-Diagnostics, GenMark, and Alpha Pro Tech -- the coronavirus spread is likely to be the biggest growth driver at least in the near term.

BioCryst, on the other hand, has other potential catalysts on the way. The company hopes to win Food and Drug Administration approval for its hereditary angioedema (HAE) drug berotralstat by early December of this year. BioCryst also expects approval for the drug in Japan in the second half of 2020 and plans to file for European approval within the next few weeks.

What about the prospects for BioCryst with the coronavirus outbreak? The company has stated only that it is "in active dialogue with relevant U.S. public health authorities as they assess potential approaches to treat and prevent COVID-19, and whether galidesivir could be useful." In other words, for now, any possibilities for the drugmaker related to the coronavirus remain uncertain.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BioCryst Pharmaceuticals, Inc. Stock Quote
BioCryst Pharmaceuticals, Inc.
$10.81 (3.35%) $0.35
GenMark Diagnostics, Inc. Stock Quote
GenMark Diagnostics, Inc.
Co-Diagnostics, Inc. Stock Quote
Co-Diagnostics, Inc.
$5.37 (5.50%) $0.28
Alpha Pro Tech, Ltd. Stock Quote
Alpha Pro Tech, Ltd.
$4.41 (1.61%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.