Bioventix bounces back on lab demand

A company’s rebound from the pandemic is a process, rather than a measurable event. This is especially true of firms in the healthcare sector, many of which felt the impact of staff absences and cancelled procedures well into this year. 

Bioventix (BVXP) – a company that creates sheep monoclonal antibodies (SMAs) for use in human diagnostic applications – now appears to be on the road to recovery. At the height of Covid’s global spread, activity in the company’s key diagnostic pathways declined, and demand for its products has only recently picked up.

The most significant revenue generator for Bioventix is an antibody known as vitD3.5H10, which is used by a variety of global diagnostics companies to check for vitamin D deficiency. In the financial year, sales of the antibody increased by 13 per cent to £5.4mn. Management attributed this performance to an “improved downstream market for vitamin D testing” following the retreat of serious Covid cases.

The majority of antibodies manufactured by Bioventix are used in blood-testing machines in labs and hospitals around the world. The company noted that shipments of its products to China had increased throughout the year, and that it is now seeing “modest increases” in royalty payments from its customers there. 

However, it also acknowledged that domestic antibody development in China and elsewhere constitutes a longer term threat to revenues. “In addition, relative global geopolitical stability will be important for the continued trade in technology products such as our antibodies,” management said.

Though the financials are headed in the right direction at Bioventix, the company still finds itself at the nexus of a number of macro issues, from supply chain problems to energy market upheaval. Hold.

Last IC view: Hold, 3,925p, 18 Oct 2021