America's capacity to detect the coronavirus responsible for COVID-19 will get an enormous bump from Thermo Fisher Scientific (TMO 0.60%). The world's largest producer of scientific tools says it expects to have produced up to 5 million testing kits by the week of April 3.
On Friday, the Food and Drug Administration granted emergency use authorization to COVID-19 testing kits from Thermo Fisher Scientific, Roche (RHHBY 1.20%), and a slew of their peers.
Image source: Getty Images.
One piece of the puzzle
The number of test kits should soon meet the demand, but that alone won't unwind an enormous coronavirus testing backlog. Healthcare providers also need access to an Applied Biosystems 7500 Fast Dx Real-time PCR instrument and around four hours to gets results from a sample.
Laboratories all over the world already have instruments that can run Thermo Fisher's COVID-19 test kits, but each can only test so many samples at a time. According to the American Enterprise Institute, there are enough machines in the U.S. to run around 26,000 tests per day.
Not a rainmaker
Investors who expect that the companies involved in COVID-19 testing will earn a swift windfall could be disappointed. Even assuming that roughly half of America's COVID-19 testing capacity gets directed to Thermo Fisher tests, it would still take over a year to work through 5 million kits.
In 2019, Thermo Fisher recorded a whopping $25.5 billion in sales of instruments and services. Specialty diagnostics is an important part of the company's long-term growth strategy, but the entire operating segment was responsible for just 15% of its total revenue last year.
