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Calculus VCT boosted by Genedrive, Mologic and other British biotechs tackling coronavirus

Four of Calculus’s portfolio companies are working on treatments or products directly related to the virus.

Calculus VCT Plc -
Yourgene is producing Novacyt's test

The real worth of Britain’s biotechnology sector is starting to be recognised thanks to the need to treat and diagnose coronavirus, according to Calculus VCT Plc’s (LON:CLC) manager John Glencross.

Four of Calculus’s portfolio companies are working on treatments or products directly related to the virus.

Two of these are private companies, but its two listed groups have seen their respective share prices soar recently.

Glencross said its investee companies’ ability to pivot quickly to meet the needs of the crisis has highlighted that Britain still has a very strong science base.

Having been out of favour relative to technology, these strengths are now being recognised and the work undertaken by companies in Calculus’s portfolio will be extremely important in tackling the pandemic, he believes.

Genedrive up 700%

Genedrive PLC (LON:GDR), for example, has been completely re-rated following the announcement it is developing two SARS-COV-2 detection tests including one for mass testing with its shares up more than 700% since it started work.

A lack of testing has been suggested as one reason why the UK’s infection and death rates are greater than places such as Germany and South Korea.

Genedrive’s first assay test, which could be ready in a matter of weeks, enables results to be delivered quickly close to patients, rather than needing to send samples to labs to be tested and waiting days for a conclusive result.

Once approved, Genedrive says it can ramp up to over 10,000 tests per hour, which would make the product “a material revenue generator for the company and significant contributor to addressing the global pandemic”.

A second SARS-COV-2 test under development will allow point-of-care testing outside of a hospital environment in places such as clinics and intensive care units where rapid results are required.

Yourgene PLC (LON:YGEN) is up 44% since the start of the year with most of the gains seen since it was appointed to produce the COVID-19 diagnostic tests developed by Novacyt.

PM visits Mologic

Another portfolio company, Mologic, meanwhile, has received a £1mln grant from the government to help it develop a point-of-need coronavirus diagnostic for the home or clinic that will give a result within 10 minutes and eliminate the need for special training, electricity or a lab.

Before he was hospitalised by the virus, prime minister Boris Johnson visited Mologic's Bedfordshire labs to highlight the effort going into research.

On a slightly different tack, private group EveryMobile1 is working on communications platforms in Africa to provide digital training to health workers and disseminate information to the population if the virus takes hold there.

As a VCT, Calculus also offers investors the advantages of 30% income tax relief after five years plus tax-fee capital gains and dividends.

The tax breaks aim to encourage funds for new, pioneering companies at the cutting edge of technological advances.

Glencross says Calculus’ investment focus has always been very much on the fast-growing parts of the economy.

Tech, life sciences, creative industries and environmental services account for much of the portfolio and he is prepared to wait for the businesses to mature at their own pace.

“We’ve been doing this for twenty years,” he says.

Time to move up the development curve

“And it takes time for companies to move through the development curve.

“We are a supportive long-term investor and close to companies the companies it invests in.”

 Underlining that, Calculus is doing what it can to see its portfolio companies through the challenges of the present situation, which he believes will result in serious economic disruption for at least six months.

“We have cash on the balance sheet if needed”, he says, though he adds there will also be opportunities arising from the current situation.

Cloud Trade, one of its tech investments, for example, has seen demand for its remote invoice processing take off as people work from home.

Cloud Trade’s software can process and receive any conceivable invoice and enquiries have soared.

“We just need to make sure can support companies if the need arises,” said Glencross.

At 35p, Calculus is valued at £9.5mln compared to an asset value of 65.1p at end-March.

Quick facts: Calculus VCT Plc

Price: 65 GBX

LSE:CLC
Market: LSE
Market Cap: £17.68 m
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