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As Abbott Stock Rises on EUA for Antigen Test, Competitors' Shares Take a Hit

NEW YORK – Share prices for several diagnostic companies declined sharply on Thursday after Abbott Laboratories and the US Food and Drug Administration announced that the firm had received Emergency Use Authorization for a rapid, low-cost SARS-CoV-2 antigen test.

Abbott's BinaxNow COVID-19 Ag Card is a $5 test that provides results in 15 minutes from a nasal swab and can be used in CLIA-waived point-of-care settings such as doctors' offices, emergency rooms, or schools. In response to the news, Abbott's shares soared, closing up 8 percent at $111.29 on the New York Stock Exchange after climbing as high as $114 during the day, a 52-week high.

But for makers of competing tests for COVID-19 that have received EUAs, good news for Abbott meant a hit to their stocks.

Among the firms seeing a sharp drop on Thursday was Fluidigm. The firm had just announced on Wednesday that it received EUA for its Advanta Dx SARS-CoV-2 RT-PCR assay, an extraction-free saliva-based test to detect nucleic acid from the SARS-CoV-2 virus. That authorization led to a sharp spike yesterday for its stock, which closed up 30 percent on the day. But today it gave back those gains and more, closing down nearly 27 percent at $8.40 on the Nasdaq.

Likewise, Fulgent Genetics, which has an EUA for its COVID-19 by RT-PCR test that can be used with an at-home nasal swab collection kit from Everlywell, saw its share price drop 28 percent to $32.22.

Quidel, which currently sells three Emergency Use Authorized SARS-CoV-2 detection products — an instrument agnostic RT-qPCR kit in the Lyra line, a Lyra direct kit that does not require extraction, and a rapid antigen test that runs on the firm's Sofia and Sofia 2 immunoassay analyzer instruments — had a 22 percent decline its share price on Thursday, closing at $174.56 on the Nasdaq. The firm was the first to receive an EUA for a viral antigen test for COVID-19 back in May.

In a research note to investors on Thursday, Craig-Hallum analyst Alexander Nowak noted that Quidel's share price has now dipped to around the levels it was trading at in early May, meaning the market is now pricing in zero COVID-related revenue. He said that the Abbott antigen test EUA is "less about taking share from [Quidel], but more antigen taking share from molecular. We expect molecular will only be used in confirmatory cases or hospital-critically ill patients."

In addition, Nowak said that he expects an EUA for Quidel's Sofia flu/COVID combo test would move stock market sentiment back to Quidel. "As the flu season approaches, clinicians need to screen for COVID amid a variety of diseases," he wrote. "They will also want to screen for flu to be sure about any false negative COVID results."

Nowak also said he expects Quidel to soon launch its own version of an immunochromatographic assay that would be comparable to Abbott's Binax test and expects that assay to be comparable in price. Nowak currently has a Buy rating on Quidel's stock with a price target of $363.

Meanwhile, Cowen analyst Doug Schenkel said the drop in stock prices for molecular diagnostics firms "appears overdone." He wrote in a note, "We don't expect broader antigen test supply to be a major headwind vs. previously expected MDx test demand. This is especially true for those with primary in-patient exposure [such as GenMark Diagnostics] and those with fully automated systems," such as Danaher and its Cepheid business and Hologic.

GenMark's shares closed down 13 percent at $13.12 on the Nasdaq, while shares of Danaher dropped 2 percent to $204.39 on the NYSE, and Hologic's stock fell 7 percent to close at $61.54 on the Nasdaq.

He noted that Cepheid is expected to launch a combination molecular test for flu A/B, respiratory syncytial virus, and COVID-19. Likewise, GenMark has submitted an EUA application for its ePlex Respiratory Pathogen Panel 2, which can identify 21 respiratory pathogens, including SARS-CoV-2, influenza A, and influenza B, and has been launched in the US for commercial distribution.

Among the other diagnostics firms seeing their share price drop on Thursday were OraSure, (-20 percent), Opko Health, which owns Bio-Reference Laboratories (-18 percent), Luminex (-12 percent), clinical lab Quest Diagnostics (-7 percent), Meridian Bioscience (-7 percent), and ChemBio Diagnostics (-18 percent).