Shares of GenMark Diagnostics (NASDAQ:GNMK) were falling 12.7% lower as of 11:20 a.m. EST on Friday. This drop might be surprising, since the company didn't report any news and stands to benefit as the novel coronavirus outbreak drives sales for its coronavirus test kits. But it appears that investors are taking profits off the table after GenMark's shares soared earlier this week.
Today's nosedive really doesn't mean much in the big scheme of things. What does matter? GenMark's business prospects.
Those prospects are certainly better now that GenMark has begun shipping its ePlex test kits, which are designed to test the novel coronavirus that causes COVID-19. For now, though, the test kits are available for research use only.
It's important to remember, too, that GenMark has competition. Co-Diagnostics also has a novel coronavirus test. Danaher subsidiary Integrated DNA Technologies makes the test kits for the Centers for Disease Control and Prevention. Quest Diagnostics announced this week that it plans to launch a coronavirus testing service, as well.
Still, it seems likely that GenMark will enjoy a sales boost from its new coronavirus test. The big unanswered question is just how big that boost will be.
GenMark's ePlex molecular diagnostics platform is already achieving commercial success. The company recently reported that sales for ePlex in the fourth quarter jumped 59% year over year to $60.3 million, generating more than two-thirds of total revenue in the quarter. GenMark's next quarterly update will almost certainly be even better.
However, look for the healthcare stock to remain quite volatile for a while. GenMark's shares could swing up and down based on the headlines related to the coronavirus outbreak.