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Why These 4 Coronavirus-Focused Stocks Are Soaring Today

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

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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.

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Stocks Mentioned

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

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

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