Introduction

Tests might be the best way to end the virus threat.

Take schools for example. What if you:

1. Cleaned out all school rooms every night.

2. Don’t let anyone in the next day without a test.

3. Quarantine those with the virus.

4. Repeat this for every school building.

By doing this, we could identify and isolate the virus worldwide.

The New Testing Technologies

Virus tests are now available from more than three companies costing $5 that provide accurate results in 15 minutes or less: Abbott Labs (ABT), Becton, Dickinson and Company (BDX), and Quidel Corporation (QDEL).

Abbott was the last of these three to get emergency use authorization from the FDA.

The U.S. government plans to distribute almost all of the 150 million Abbott tests that it recently brought to the states where they can be used to help reopen schools and protect first responders.

Shipments to governors will begin mid-month.

The tests will also be sent to assisted-living facilities, senior centers, home health personnel and nursing homes. In addition, they will be used to boost screenings in populations of color via historically Black colleges/universities and Native American tribes.

Further, Roche (RHHBY) plans to launch its SARS-CoV-2 Rapid Antigen Test later this month in markets that accept CE Mark certification. And Roche expects to file for emergency use authorization in the U.S.

Roche claims its test can generate a result in 15 minutes without the need for instrumentation. The company says it has 96.5% sensitivity and 99.7% specificity, based on 426 nasopharyngeal swab samples from two independent study centers.

At launch, production volume will be 40 million units per month, which will ramp to more than 80 million per month by year-end.

The Global Challenge

Will it be expensive? Of course.

Let’s look at the numbers:

Global GDP is $149 trillion with the global population at 7.8 billion.

Suppose we were willing to spend 2% of the GDP on tests. That would be $3 trillion. With tests costing $5 each, we could produce 596 billion tests. And with such volume, the costs of tests would come down. Using those tests to identify and isolate those with the virus would go a long way to controlling it.

Would Investing In These Companies Be A Good Idea?

The price-earnings ratios of these companies are understandably high: Quidel – 43, BDX – 84, ABT – 62, RHHBY – 29. This is a gambler’s market.