Why the Genetic Signatures (ASX:GSS) share price surged 6% higher today

The Genetic Signatures Ltd (ASX: GSS) share price has been pushing higher with the market today.

In afternoon trade the specialist molecular diagnostics company’s shares are up 3% to $1.96.

Though, at one stage today, the Genetic Signatures share price was up as much as 6% to $2.02.

Why did the Genetic Signatures share price jump higher today?

Investors were buying the company’s shares following the release of a second quarter update that revealed further strong sales growth.

According to the release, Genetic Signatures delivered a 738% increase in quarterly revenue to $8.2 million. This led to the company reporting record unaudited half year revenue of $18.7 million, which was up 638% on the prior corresponding period.

This impressive growth has been driven largely by strong demand for its COVID-19 testing kits. Genetic Signatures designs and manufactures a suite of real-time Polymerase Chain Reaction (PCR) based products for the routine detection of infectious diseases under the EasyScreen brand.

Pleasingly, this strong sales growth led to the company achieving its second consecutive cashflow positive quarter. It added $4.1 million in net cash from operating activities, including its $2.6 million R&D tax refund.

At the end of the period, the company had a cash balance of $36.3 million and no debt.

Management commentary

Genetic Signatures’ CEO, Dr John Melki, commented: “We pleased to report record half year revenue and a second quarter of positive cash flow. The recent supply agreement with Boston Medical Center has already seen two orders fulfilled, while a second US-based customer has been acquired. The investments made in personnel and warehousing facilities provides a strong foundation for Genetic Signatures as our team continues to pursue active leads in the North American market.”

“Recent developments in the United Kingdom, as well as localised outbreaks in Australia, have shown broad testing remains a pivotal tool in responding to COVID-19. We see strong demand continuing in the future as governments pursue various testing strategies. Genetic Signatures remains focused on both ensuring the consistent and reliable supply of test kits to support these ongoing measures and introducing these customers and others to the benefits of the broader EasyScreen suite of diagnostic tests.”