Aytu Bioscience (AYTU) has recently severed an agreement with their partner Biolidics Limited for their COVID-19 Coronavirus Test Kits. The partner states that it is too competitive for COVID-19 coronavirus test kits and is looking at other alternatives.
Yesterday Biolidics Limited announced that it would terminate the COVID-19 test distribution agreement with AYTU Bioscience and instead look for an alternative development of COVID 19 tests.
The announcement states that currently it is too competitive for COVID-19 tests and that both companies have developed a new agreement for the development of tests beyond the laboratories, they state this test will be broadly used by outside the laboratories.
Right now Aytu Bioscience and Biolidics Limited are in talks to negotiate a proposed collaboration agreement.
What does this mean for Aytu Bioscience (AYTU)?
The new tests that both companies are developing could mean that people may have the ability to use these tests at home without going to a laboratory. The good news is that there is no competition in this area and AYTU can easily dominate this segment.
The bad news is that Biolidics Limited recognizes that there are too many competitors are in the market for antibody tests, this shows that this isn’t good for the current supply of tests. Both ZoG and Biolidics Limited tests could be sitting in a warehouse.
As the coronavirus become problematic again this could very well be another avenue for the company to bring in profits.
The US, already recording the most infections and most deaths from Covid-19 anywhere in the world, is seeing further startling increases. The number of positive tests recorded in the past few days has reached a daily record total of 40,000, and it’s still climbing, fuelled by an explosion of clusters in Arizona, Texas and Florida.
This is not a “second wave” of infections. Instead, it’s a resurgence of the disease, often in states which decided to relax their lockdown restrictions, arguably too early.
Brazil, the second country after the US to pass 1m cases, is also experiencing dangerous rises. Its biggest cities, São Paulo and Rio de Janeiro, are the hardest hit but many other areas of the country are doing little testing, and the real numbers are bound to be far higher.
Something similar is happening in India. It recently recorded its greatest number of new cases on a single day – 15,000. But because there’s relatively little testing in some of the most heavily populated states, the true scale of the crisis is inevitably larger.
Why is this happening? Deprived and crowded communities in developing countries are vulnerable. Coronavirus has become “a disease of poor people”, according to David Nabarro, the WHO’s special envoy for Covid-19.
When whole families are crammed into single-room homes, social distancing is impossible, and without running water, regular hand-washing isn’t easy. Where people have to earn a living day-by-day to survive, interactions on streets and in markets are unavoidable.
For indigenous groups in the Amazon rainforest and other remote areas, healthcare can be limited or even non-existent.
And the rate of infection itself is often worryingly high: of everyone tested in Mexico, just over half are turning out to be positive. That’s a far higher proportion than was found in hotspots like New York City or northern Italy even at their worst moments.
Shortages of personal protective equipment (PPE) for frontline medical staff are far more severe where budgets are small.
In Ecuador, where at one stage bodies were being dumped in the streets because the authorities could not cope, a key laboratory ran out of the chemicals needed to test for coronavirus.
And where economies are already weak, imposing a lockdown to curb the virus potentially carries far greater risks than in a developed nation.
Dr Nabarro says there is a still a chance to slow the spread of infections but only with urgent international support. “I don’t like giving a depressing message,” he says, “but I am worried about supplies and finance getting through to those who need them.”
Conclusion: is Aytu Bioscience (AYTU) a good investment?
Shares of Aytu Bioscience appear to be a very good investment option, with Wall Street analysts expecting its price to rise considerably in the next several months. The majority of the metrics point to this investment being highly attractive.
