After peaking at the end of April, nanotechnology stock AnteoTech Ltd [ASX:ADO] has been on a downward slide for most of May.
The Antetech share price fell from around 44 cents per share, down to around 29 cents late last week.
But today, the ADO Share price has managed a turnaround. Up 11.67% at time of writing, bringing the share price to 34 cents.
A decent reversal of the recent trading pressure.
So what caused it, and will it last?
New contract for COVID-19 solution
Now though, in the midst of a broader rollout, the company has secured a timely manufacturing contract. Furthering their existing relationship with Operon — who has the capacity to produce eight million tests per year — into this commercial phase.
A collaboration that is intended to deliver results not only in the short term, but for at least a few years to come.
As AnteoTech categorically state:
‘Under the terms of the manufacturing agreement, AnteoTech and Operon have agreed to an exclusivity period of three years, during which Operon has the first right of refusal to manufacture AnteoTech’s COVID-19 ART’s to supply the European market, exercisable only if Operon has the capacity to produce the quantity of EuGeni COVID-19 ART to meet AnteoTech’s European demand.’
So this is quite the commitment from both parties.
But it could also be a lucrative deal for both as well. That is if these test kits, and the EuGeni reader itself prove to be as effective as AnteoTech make it out to be.
This is particularly important as AnteoTech’s hopes to break into the Australian market may have been put on hold. Management is keenly awaiting the overturning of restrictions on international arrivals — a decision that will bring the need for screening to the fore once again.
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And as such, AnteoTech believes that its ART process may be a solid alternative to lab-based testing.
Something that we will now have to wait until later in the year (at the earliest) to find out.
What’s next for the AnteoTech Share Price?
Looking ahead, as we’ve repeated several times now, AnteoTech’s focus is ensuring that this ART testing is a commercial success.
A pivotal short-term goal that will likely determine the validity of its life sciences ambitions. At least to some degree.
For that reason, today’s announcement is a good step in the right direction. Bringing them closer to this goal.
But as always, until we start seeing whether there is demand for the tests or not, it’s hard to say what the end result will be.
And that is why it is a highly-speculative investment.
The kind of stock that isn’t going to suit everyone.
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