Virax Biolabs stock soars 45% on Mpox detection kit deal: What you need to know

Virax Biolabs Group Ltd (NASDAQ: VRAX) saw its shares surge by approximately 45% on Wednesday after announcing a partnership with a leading supplier of Mpox detection kits.

The partnership grants Virax the rights to sell RT-PCR tests for Mpox across more than a dozen European countries and several Middle Eastern nations. However, the financial terms of the agreement were not disclosed.

Following this news, Virax's stock is now trading at roughly 10 times its value from late April.

Why the Mpox tests are important for Virax stock

This development is significant because expanding the sale of Mpox detection kits in these regions could substantially boost Virax Biolabs' revenue.

The timing is also crucial, as the World Health Organization recently declared MonkeyPox a public health emergency of international concern.

Since January 2022, over 120 countries have reported more than 100,000 confirmed Mpox cases, with the global death toll exceeding 220.

James Foster, CEO of Virax, emphasized the importance of this partnership in a press release on Wednesday, stating:

"Our partnership with our supplier, a leader in diagnostic reagents and equipment for infectious pathogens, underscores our commitment to reaching at-risk communities across major geographies."

Despite this positive news, Virax shares are not widely covered by Wall Street analysts.

What we know about Virax's Mpox detection kits

Virax Biolabs' Mpox test boasts a specificity of 93.72% and a sensitivity of 96.7%, with results available in under 70 minutes.

The RT-PCR test has received sales approval in Europe and authorization from the UK's Medicines and Healthcare Products Regulatory Agency (MHRA).

The agreement is expected to significantly expand the reach of Virax's Mpox detection technology across key markets.

However, despite today's sharp increase in stock value, VRAX remains unattractive to income investors as the company does not currently offer a dividend.