Key points:
- Genedrive shares surged 27.3% after initiating the US approval of its test.
- The company has started the pre-approval of its MT-RNR1 ID Kit in the US.
- The test will likely be approved given its proven capabilities and market need.
The Genedrive PLC (LON: GDR) share price surged 27.27% after announcing that it had started the pre-submission process with the US Food and Drug Administration (FDA) to get the approval of its Genedrive® MT-RNR1 ID Kit for sale within the United States.
The company did not submit its final application since there is no comparable test in the market; hence, the path to regulatory approval is less clear than for other drugs.
Also read: Best Healthcare Stocks To Buy Right Now.
Genedrive’s MT-RNR1 ID Kit is the world’s first rapid test for infants in an acute care setting, which tests for a unique genetic variant that can cause life-long impaired hearing in carriers of the gene when they are treated with specific antibiotics.
Once the test kit has detected an infant’s gene, the child can be given an alternative treatment to prevent hearing loss. For example, infants with the gene variant could become deaf from using aminoglycosides. The testing can also prevent the adverse side effects of gentamicin usage.
According to current estimates, malpractice lawsuits related to deafness caused by the use of aminoglycosides tend to result in settlements worth over $1.1 million per case. Genedrive says that its test can result in positive financial outcomes for the healthcare systems by reducing malpractice cases related to antibiotic use in infants.
Genedrive requires either an FDA 510(k) clearance or the granting of a De Novo request is required to allow us to market this test in the US.
Investors reacted positively to today’s announcement, given the significant impact that such a test could have when marketed in the US. In addition, most investors expect the FDA to approve the test, given its proven capabilities.
So, would I buy Genedrive shares? The short answer is yes, Genedrive shares are trading at a long-term support level that could sustain a higher rally.
*This is not investment advice.
Genedrive share price.
The Genedrive share price rallied 27.27% to trade at 14.00p, rising from Tuesday’s closing price of 11.00p.