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Why Co-Diagnostics Skyrocketed 28.3% Today

What happened

After the Food and Drug Administration approved collaboration partner Clinical Reference Laboratory's saliva test for COVID-19, Co-Diagnostics (NASDAQ: CODX) shares soared 28.3% on Monday.

So what

One of the biggest private lab companies in the United States, Clinical Reference Laboratory (CRL) developed its saliva COVID-19 test using Co-Diagnostics CoPrimer technology to boost sensitivity and reduce false positives by eliminating amplification errors common in molecular testing. A toy rocket soaring into the sky.

IMAGE SOURCE: GETTY IMAGES.

The FDA's emergency-use approval for CRL's test using CoPrimer techology isn't the first for Co-Diagnostics, though. The healthcare company secured FDA emergency-use authorization for its Logix Smart Coronavirus Disease 2019 (COVID-19) test in April, and on May 14, it reported unaudited COVID-19-related revenue of $18 million year to date. 

Now what

The rapid spread of Covid-19 is contributing to a backlog of testing demand that's causing delays in test results, so there's a significant need for new testing capacity. 

The potential tailwind to Co-Diagnostics revenue from COVID-19-related testing is significant since the company's total revenue was just $1.5 million in the first quarter. Given the sales numbers reported in May and increasing testing in the United States throughout the past quarter, it appears a big quarter-over-quarter increase in revenue is on tap when management reports second-quarter results on August 13.

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Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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