CLEVELAND, May 14, 2020 /PRNewswire/ --Diagnostic testing is at the forefront of the novel coronavirus (COVID-19), stimulating substantial spending on testing infrastructure to address the pandemic, according to the Healthcare & Life Sciences Insider, an industry report released by Brown Gibbons Lang & Company (BGL). Access the full report here.
COVID-19 has triggered a resurgence in interest in diagnostics and research tools, elevating polymerase chain reaction (PCR) and antibody testing to the spotlight as critical methods to assess and address the pandemic. COVID-19 studies conducted globally underscore the importance of widespread PCR testing given the contagiousness of pre-symptomatic and asymptomatic individuals.
Investors are optimistic about the industry's future growth prospects as exhibited in recent share price performance:
Diagnostics has outperformed the S&P 500 index with a year-to-date return of 6.94 percent and 25.42 percent over the last 12 months. The S&P 500 is still regaining from the market dislocation caused by COVID-19, showing a year-to-date return of -11.16 percent and 2.07 percent year-over-year. The quick recovery in the Diagnostics sector suggests a bullish outlook for the sector and the resiliency of the broader healthcare market.
Abbott Laboratories and Danaher Corporation, through its subsidiary Cepheid, were the first two public companies to obtain approval for rapid molecular tests to diagnose COVID-19. Companies are being rewarded in their trading performance, with both stocks outperforming industry and broader market indices. Returns for Abbott and Danaher of 7.99 percent and 4.42 percent year-to-date, and 24.24 percent and 23.80 percent year-over-year, respectively, highlight the growing importance of technology innovation in the public equity markets.
Preparedness efforts are underway as governments and healthcare systems build out diagnostics infrastructure to respond to the current crisis and ready for potential future challenges. We expect this expansion will drive investment and M&A activity across the entire sector for the foreseeable future.
About Brown Gibbons Lang & Company Brown Gibbons Lang & Company is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, divestitures, capital markets, financial restructurings, valuations and opinions, and other strategic matters. BGL has investment banking offices in Chicago, Cleveland, and Philadelphia, and real estate offices in Chicago, Cleveland, Denver, and San Antonio. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 30 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit www.bglco.com.