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HC Wainwright repeats 'Buy' on Co-Diagnostics after FDA policy shift

The broker has a $20 price target on the stock, which is more than double where shares stand today at around $9.60

Co-Diagnostics -
The worldwide tally of coronavirus cases is put at 358,076, while there have been 15,427 deaths

Broker HC Wainwright & Co has repeated a 'Buy' on Co-Diagnostics Inc (NASDAQ:CODX) after the new FDA policy reported last week, which allows the company to aggressively expand its coronavirus test kits in the US.

The broker has a $20 price target on the stock, which is more than double where they stand today at around $9.60.

READ: Co-Diagnostics hails FDA policy change as it will allow rapid domestic expansion of its coronavirus test

Analyst Yi Chen noted that the biotech can now market its Logix Smart coronavirus (COVID-19) test to a "wide array" of US 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," said the analyst, listing Italy, Germany, UK, Turkey, Greece, the Philippines, Thailand, Australia, Paraguay, Ecuador, Israel, South Africa, Canada, and the US.

"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."

The worldwide tally of coronavirus cases is put at 358,076, while there have been 15,427 deaths. In the US, cases have surged past 35,000 and the deaths amount to 471 at the time of writing.

Outcompete other tests

The broker reckons the Logix Smart COVID-19 test could outcompete other tests globally with its combination of high accuracy and a low cost, at $7 per test.

Analyst Chen also reminded investors in the note that the firm's test has 99.2% sensitivity and 100% specificity.

"The test targets a single genetic code in a highly conserved region within the COVID-19 genome, based on hundreds of genetic sequences from various strains collected globally since December 2019 that reflect the evolution and mutations of COVID-19," the analyst said.

"In comparison, the test developed by the U.S. Centers for Disease Control and Prevention (CDC) attempts to match three distinct genetic codes in a region known for mutations and has generated inconclusive results even on known samples of the coronavirus."

Co-Diagnostics CEO Dwight Egan said last week: "Our cost-effective Logix Smart CODIV-19 test has been designed to run on a variety of commercially available platforms, with easy-to-interpret results in under two hours. We are confident in our ability to meet the growing demand for this diagnostic."

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Quick facts: Co-Diagnostics

Price: 18.55 USD

NASDAQ:CODX
Market: NASDAQ
Market Cap: $509.33 m
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