Co-Diagnostics (NASDAQ:CODX) Reiterated Buy; Joins Distinguished Group Racing to Meet Unprecedented Global Demand for COVID-1...
March 25 2020 - 11:30AM
The global shortage of COVID-19 testing kits is hitting the United
States and other nations hard, but a recent FDA policy change means
that Co-Diagnostics (NASDAQ:CODX) can help meet this unprecedented
demand by aggressively distributing its COVID-19 test without prior
FDA clearance - no longer just globally, but also to address the
anxious and growing U.S. market. Following a successful
clinical evaluation showing 100% sensitivity and 100% specificity,
the company plans to rapidly begin fulfilling orders from a
multitude of U.S. customers, including thousands of additional
laboratories that can now run the company’s test as a clinical
diagnostic.
Accordingly, HC Wainwright has reiterated their Buy rating and
$20 price target.
On March 18 they observantly note that:
…Co-Diagnostics has validated its Logix Smart COVID-19 test and
submitted an EUA application to the FDA. We are aware that EUAs
have thus far been issued to tests developed by Roche, Thermo
Fisher, Hologic, LabCorp, Quest Diagnostics and Quidel, with the
last two EUAs issued late yesterday. It seems the FDA continues to
issue EUAs even though EUA is no longer required under the new
guidance.
It should be clarified that where the Co-Diagnostics test
differs from others is on how fast it works. While Roche pledges to
have results identifying a Covid-19 infection in 3-1/2 hours.
Becton Dickinson (BDX:NYSE), says its test is complete in two to
three hours. According to their most recent release, Co-Diagnostics
aims to do better: under 2 hours.
HC Wainwright continue:
The company plans to market its Logix Smart™ COVID-19 test to a
wide array of U.S. laboratories without first requiring Emergency
Use Authorization (EUA) from the FDA. We note that Co-Diagnostics
has already been shipping its COVID-19 test to countries across
five continents and scaling up production to meet global demand.
These countries include Italy, Germany, UK, Turkey, Greece, the
Philippines, Thailand, Australia, Paraguay, Ecuador, Israel, South
Africa, Canada, and the U.S. In our view, the company is now able
to serve the urgent need for rapid, accurate COVID-19 testing in
the U.S., which has been lagging other developed countries on the
testing front; the volume of tests shipped to domestic labs should
ramp up in the immediate term.
Other highlights include:
COVID-19 test kits to be sold in India. The
company’s joint venture in India, CoSara Diagnostics, has become
the first and only Indian company to receive a license from the
Central Drugs Standards Control Organization (CDSCO) to manufacture
reverse transcription polymerase chain reaction (RT-PCR) test kits
for COVID-19... Test kits manufactured by CoSara are expected to be
sold in the Indian market, targeting 52 government-approved testing
facilities as well as 60 accredited private labs. CoSara’s COVID-19
test kits may also be exported to surrounding countries and
regions. We note that COVID-19 testing in India has been
inadequate, and the government plans to ramp up testing going
forward. Therefore, we expect CoSara to ship increasing numbers of
test kits in the coming weeks and months, which should make
positive contributions to Co-Diagnostics’ bottom-line.
The full reports can be accessed here and here.
Disclosure: Co-Diagnostics Inc is a client of BDA
International.
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