Co-Diagnostics
Biotech

Will Abbott Labs (NYSE:ABT) Buy Co-Diagnostics Inc (NASDAQ:CODX)?

We said in March that Co-Diagnostics Inc (NASDAQ:CODX) was destined for new highs when the stock was trading around $10 a share. With CODX stock trading over $28 after-hours, that’s a 180% gain in just 2 months. However, we don’t think this rally is over. Matter of fact, it might be just getting started as Co-Diagnostics has left big pharma in the dust when it comes to COVID-19 testing. Things are looking so dire for Abbott Labs (NYSE:ABT) that they might have no choice but to buy Co-Diagnostics.

Our thesis on CODX was simple. Big news had just come out on Co-Diagnostics Inc. The FDA was going to allow the company to aggressively expand its presence in the U.S. market for its COVID-19 test. This was a huge development and why we believed NASDAQ:CODX would soon be trading over its recent highs above $21.

CODX Daily Chart

About Co-Diagnostics

Co-Diagnostics, Inc., a Utah corporation, is a molecular diagnostics company that develops, manufactures and markets a new, state-of-the-art diagnostics technology. The Company’s technology is utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and license the use of those tests to specific customers.

C0-Diagnostics COVID-19 Test

What has gotten the market so excited is that Co-Diagnostics’ COVID-19 test showed 100% sensitivity and 100% specificity, the metrics used to define accuracy in molecular diagnostics testing. The data released came from independent evaluations of the performance of the Company’s COVID-19 test in the field. These evaluations include the India National Institute of Pathology, the Mexican Department of Epidemiology (“InDRE“), and others in the US and abroad. Each study concluded 100% concordance for both specificity and sensitivity.

Tests performed in Australia (n=207), India (n=45) and Mexico (n not provided) showed 100% sensitivity and 100% specificity with no cross-reactivity with other viruses. The test also detected more low-level positives than the CDC assay while testing at the Minnesota Department of Health showed 100% concordance with another (unnamed) assay. Brent Satterfield, PhD said:

“In countries where we have been evaluated against other tests, we have consistently and repeatedly achieved 100% clinical sensitivity and specificity and you can’t do better than that.”

These results underpinned Co-Diagnostics’ ongoing role as a major global supplier of COVID-19 tests, providing in-vitro diagnostic kits to nearly 50 countries and domestically to more than a dozen states. On Feb. 24th Co-Diagnostics was the first US-based company to receive a CE marking for a COVID-19 test kit, the regulatory clearance granted by the European Community, followed by Emergency Use Authorization from the US FDA.

Abbott’s Failure

According to an NYU study and regardless of method of collection and sample type, Abbot ID NOW COVID-19 missed a third of the samples detected positive by Cepheid Xpert Xpress when using NP swabs in VTM and over 48% when using dry nasal swabs. This is a huge disappointment for Abbott and puts the company way behind Co-Diagnostics when it comes to COVID-19 testing. To save face, Abbott needs to make a move. Buying Co-Diagnostics would solve Abbott’s problems.

Bottom Line

Currently trading with a market cap of just $611 million, a buyout of Co-Diagnostics would be a drop in the bucket for $163 billion market cap Abbott Labs. The news from the FDA became a game changer for Co-Diagnostics. The need for testing is urgent and over 300 million Americans need to be tested. Do the math and with or without a buyout, there’s a lot of money to be made in Co-Diagnostics.

Good luck to all (except the shorts)!

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Disclosure: We have no position in NASDAQ:CODX or NYSE:ABT and have not been compensated for this article.

Image by kalhh from Pixabay

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Will Abbott Labs (NYSE:ABT) Buy Co-Diagnostics Inc (NASDAQ:CODX)?
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