As confirmed cases of COVID-19 climb towards 76,000 and total deaths from the virus outbreak surpass 2,130, there’s one small diagnostics firm that investors may want to keep an eye on.
Nano cap Co-Diagnostics (NASDAQ: CODX) started garnering some attention last month when the stock skyrocketed 148% after the company announced that it had completed the principle design work for a PCR screening test for the coronavirus just weeks after the outbreak began in China.
Since that announcement, Co-Diagnostics shares are up around 50%, and there’s one analyst that says the stock could surge far higher still.
Maxim Group analyst Jason McCarthy issued a Buy rating on the stock in a note this week and raised his price target from $2 to $5 – 64% higher than the price as of this writing.
“We view this as de-risking of the platform, as a real-world example of how quickly [Co-Diagnostics] can develop a test in response to a novel viral outbreak,” McCarthy wrote in the note. “We also see the increased media attention as a positive which could help drive adoption, lowering commercial risk.”
According to McCarthy, the surge in interest as a result of the coronavirus has allowed Co-Diagnostics to raise $15 million in the public markets over the last few weeks, giving the company enough cash to operate into 2021.
What’s more, so far this year, Co-Diagnostics shares are up a jaw-dropping 236%, and up nearly 151% over the last 12 months.
“The company has demonstrated the ability to rapidly develop tests for emerging diseases like Zika and Ebola, and now the coronavirus, thereby highlighting the versatility of its platform, as well as demonstrating that the company will be able to develop tests for future emerging outbreaks,” McCarthy wrote.
While McCarthy noted that the test for COVID-19 may not generate much in the way of revenue for Co-Diagnostics, it is a demonstration of the company’s capabilities.
The company announced its first sales of the test, for research purposes only, on February 10, with CEO Dwight Egan commenting that “The rapid development and time to commercialization was possible thanks to the innovation of our proprietary and patented platform, our dedicated employees, and the support of our suppliers. We are pleased to be able to offer a product to this market that excels in being both sensitive and specific, the two benchmarks for accuracy in molecular diagnostics.”
Co-Diagnostics also announced Thursday that it has submitted the technical file for its COVID-19 test for registration with the European Community and expects it will be available later this month as an in vitro diagnostic tool.
“We are pleased to announce this milestone, which comes after weeks of hard work by our team at Co-Diagnostics to develop a high-performance diagnostic to help prevent the spread of the new strain of coronavirus,” Egan said in a statement. “Our patented CoPrimer™ molecules have unique properties that lead to a significant reduction in false positive test results over other polymerase chain reaction (PCR) technologies, but will also allow for enhanced multiplexing, or identifying multiple targets at once, as we iterate the test to include other strains of coronavirus and mutations of COVID-19.”