Daily Stock Watch: VRAX Stock Climbs on Monkeypox Testing News

By Duncan Ferris

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Virax Biolabs Group Ltd (NASDAQ: VRAX) is a heavy gainer on Tuesday morning after its new monkeypox rapid antigen test kits grabbed investors' attention. But is VRAX stock worth investigating?

Photo by Mufid Majnun on Unsplash

Virax Biolabs Group Ltd (NASDAQ: VRAX) has seen its share price jump by more than 30% on Tuesday following the launch of the distribution of Monkeypox rapid antigen test kits.

The business said its Monkeypox Virus Antigen Rapid Test Kits have been launched in markets accepting the CE mark, such as the European Union.

The test kits are for use in point-of-care settings and can help healthcare professionals accurately identify a monkeypox infection in people suspected of carrying the monkeypox virus, with results typically available in 15 minutes.

Virax CEO James Foster commented:

"I am very proud of our organization's ability to quickly bring this rapid antigen test kit to market to help combat the monkeypox outbreak. We are working diligently to distribute the kits as well as the previously announced Monkeypox and Varicella Zoster Viruses Real Time PCR Detection Kits into the hands of healthcare practitioners as quickly as possible."

The company previously launched a PCR monkeypox diagnostic kit in Europe back in July.

What Does Virax Biolabs Do?

Virax Biolabs Group Limited is a biotechnology company that sells, distributes and markets diagnostics test kits, as well as med-tech and PPE products for the prevention, detection, diagnosis and risk management of viral diseases in the field of immunology.

It also distributes nebulizing machines and smart wearable devices that alert employees to help them follow social distance guidelines. 

In addition, the company operates an online platform that will sell ViraxClear and ViraxCare products. It serves clinics, pharmacies, laboratories, hospitals, and other groups, as well as corporations, employees, individual consumers, hospital systems, and public and private institutions. 

The company operates in Europe, South America, the Asia Pacific, Sub-Saharan Africa, and internationally. It was formerly known as Virax Biolabs (Cayman) Limited and changed its name to Virax Biolabs Group Limited in September 2021.

Virax Biolabs Group Limited was incorporated in 2021 and is headquartered in London, the United Kingdom. 

How Does Virax Biolabs Make Money?

Virax Biolabs operates through three distinct platforms:

  • Virax Immune – The company’s immunology platform and immunity passport software.

  • Virax Care – Medical technology development and distribution.

  • Virax Clear – Diagnostic medical device developer and distributor.

However, the company did not return any revenues over the six months ended 30 September 2021 and returned just $14k in the same period in 2020. Across the whole of 2021, the company earned revenue of $123,820, compared with $99,876 the year before.

The company said this is because its strategic focus was to concentrate on continuing to develop its Virax Immune product for market and in preparing Virax Cayman for a capital raising event to support the commercialization of its brands, Virax Clear and Virax Care, and the further development of Virax Immune brand. 

As such commercialization of its products is a key challenge for the business going forward.

VRAX Stock Financials

Virax Biolabs is a fairly new fixture on the NASDAQ index, having only joined following an IPO towards the end of July. Since then, the company’s share price has declined by more than 80%.

As the company has not yet reported any results, much of its financial information is unknown at the moment. However, the business achieved revenues of around $123.8k in 2021 and a net loss of $672.9k.

The company has not yet paid any dividends to shareholders.   

VRAX Investment Risks

Some risks relating to investing in VRAX stock include:

  • The company only began to roll out sales of its Virax branded products in 2020. As a result, it is too early to draw meaningful conclusions from the financial performance of the Group due to the change in its business focus.

  • The company says it expects to continue to incur losses for the foreseeable future, with these set to increase substantially.

  • Virax Immune products will require additional development time and resources before the company is in a position to begin generating revenue from product sales.

  • Some of the business’ products in development will require regulatory approval before commercialization. There is a possibility this will never be achieved.

Is VRAX Stock a Good Investment?

The company is an inherently risky investment because of its lack of significant revenue generation and successive net losses. The company has a wide-reaching business plan, but there could be cause for concern that Virax is spreading itself thin.

However, the news about the launch of its monkeypox testing kits is positive. Even so, monkeypox cases have been trending downward in European nations like France, Germany, Portugal, Spain and Britain over recent weeks, so sales of the testing kits might be impacted by the waning danger from the outbreak.

Additionally, it is key to bear in mind that VRAX is a penny stock and thus prone to more volatility than some other investments. Always consider your own personal attitude to risk before backing a stock.

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This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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