Shares of GenMark Diagnostics (NASDAQ:GNMK), a company focused on molecular tests, rose as much as 30% in early morning trading on Wednesday. A lot of the early gains have since been erased, but the stock was still up about 14% as of 12:05 p.m. EDT.
Today's rally is a response to the news that GenMark submitted its ePlex SARS-CoV-2 Test to the Food and Drug Administration (FDA) for an Emergency Use Authorization (EUA). Management also noted that Research Use Only (RUO) versions of its tests were sent out last week to some of its customers for validation.
If the ePlex goes on to receive regulatory approval, it could be used by clinical laboratories to test for COVID-19, which is better known as the coronavirus.
Commenting on the submission, GenMark's interim CEO Scott Mendel stated:
Our priority was to help our customers address this global health emergency. We leveraged our adaptable and easy-to-use ePlex platform to quickly design and manufacture a test to accurately detect this highly contagious virus in clinical samples. EUA submission in just over a week from the initial RUO shipments of our ePlex test is a critical step to enable our customers to rapidly detect and possibly prevent the spread of the COVID-19 virus.
It's great to see that GenMark was able to respond so rapidly to the coronavirus outbreak, but it's important to remember that it isn't the only testing game in town. Companies such as Co-Diagnostics, Danaher, and Quest Diagnostics have also announced plans to bring a coronavirus test to market as soon as possible.
Then again, near-term demand for coronavirus tests is likely to be very high, so GenMark will probably do well even if it finds itself squaring off against a number of competitors.
With the coronavirus making headlines every day, it's likely that every healthcare stock with a link to the disease is going to remain volatile. Investors need to mentally prepare themselves for a bumpy ride.