The Genedrive (LSE: GDR) share price has been on a rollercoaster ride this year. The stock was trading at around 9p a share in March but then leapt to more than 200p in early May.
The excitement started to build around the company due to its existing technology, which could identify pathogens relatively quickly. This technology, investors speculated, could help revolutionise the testing process for Covid-19. The organisation believed it could cut delays processing lab samples.
Unfortunately, the company’s progress has been slower than many investors may have projected. The practicalities of getting accurate products to market have hampered the business.
Consequently, these delays hurt investor sentiment towards the Genedrive share price. The stock has fallen as a result, currently changing hands at just over 111p, down around 50% from that May high.
Despite the slow progress, Genedrive is pushing forward. Following the CE marking of the Genedrive 96 SARS-CoV-2 kit at the end of May, management has been working to gain approval from regulators around the world to sell the product in different markets.
In the United States, Emergency Use Authorisation (EUA) has been applied for and remains under consideration by the FDA. Meanwhile, the approval process in Africa and India is well underway. The South African Health Products Regulatory Authority also approved the product at the end of September.
The firm has also signed an agreement with Beckman Coulter Life Sciences to combine the Genedrive 96 SARS Cov 2 testing kit with the Biomek i7 automated work station.
And on top of all of the above, Genedrive is working on a new Point-of-Care (POC) system for Covid-19. This product could produce results in approximately 15 minutes.
Unlike many other early-stage healthcare companies, the business already has revenue commitments. Its latest trading update noted the firm had £1m of purchase commitments for the Genedrive 96 SARS-CoV-2 kit. Unfortunately, the company also noted it needs regulatory approval before these orders can be filled.
Genedrive share price investment potential
Still, from an investment perspective, I think the Genedrive share price looks attractive. One of the most common reasons why early-stage healthcare companies fail is lack of funds. That’s not something investors here need to be worried about right now.
At the end of June, Genedrive had £8.2m of cash on the balance sheet. I think that could be enough to sustain the business for at least two years. The company should have reached the revenue stage by that point. From there on, the sky could be the limit for Genedrive.
As such, while the Genedrive share price has fallen in recent months, I think the firm’s fundamentals look much stronger today than they were at the beginning of the year. If the company’s testing products are approved around the world, the revenue opportunity could be substantial.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.