Co-Diagnostics joins fight against coronavirus (COVID-19) with flagship test

Develops products to detect infectious diseases in humans and animals Offers Logix Smart Coronavirus Disease detection test in US and globally Earned net income of $42.5 million in 2020 What Co-Diagnostics does:  Co-Diagnostics Inc (NASDAQ:CODX) is a molecular diagnostics company that develops products to detect infectious diseases in humans and animals. The company also develops tools for liquid-biopsy cancer screening and agricultural uses. The Utah-based company, which also operates a second location at the CoSara Clinical Laboratories (CSCL) in Gujarat, India, offers medical labs and facilities a proprietary platform for the development of molecular diagnostic tests. It also manufactures state-of-the-art diagnostics technology.  Co-Diagnostics' technology is utilized for tests designed for the detection and/or analysis of nucleic acid molecules (DNA or RNA). The company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and licenses the use of those tests to specific customers. The company's main product is its Logix Smart test that runs a foundation of its trademark CoPrimer technology and CoDx software. The company offers four tests to detect tuberculosis and viruses - Zika, Dengue, Chikungunya, and, most importantly at present, the SARS-CoV-2 virus, which causes the coronavirus (COVID-19) disease. Co-Diagnostics also offers a host of mosquito abatement tests in the eastern US as well as the Midwest. The tests can be tailored to all regions of the country, including multiplexed tests that include either eastern equine encephalitis or western equine encephalitis.  How is it doing: Co-Diagnostics headed into 2021 after a blockbuster, record-setting 2020.  The company reported in late March that it earned a net income of $42.5 million in 2020 as its Logix Smart coronavirus (COVID-19) test drove record sales. It sold over 10 million tests last year. That’s a huge turnaround for Co-Diagnostics which posted a $5.6 million loss in 2019. In addition, the company banked $74.6 million in revenue in 2020 versus full-year revenue of just $300,000 in 2019. For its fourth quarter ended December 31, the company reported revenue of $27.1 million and net income of $12.8 million.  Co-Diagnostics also closed the year with cash, cash equivalents, and marketable securities of $47.3 million compared to $900,000 at year-end 2019. The company received an Emergency Use Authorization (EUA) from the US Food & Drug Administration in April 2020 for its COVID-19 tests. The firm currently has clients in more than 50 countries, including Australia, India, Mexico, and European Community countries, plus 25 US states, and also has validations of test accuracy from regulatory bodies of numerous countries around the world. And in late 2020 Co-Diagnostics announced that its Logix Smart ABC (Influenza A/B, SARS-CoV-2) test and its Logix Smart SARS-CoV-2 multi-gene test were both awarded CE marks from European regulators, which allows the products to be sold as in-vitro diagnostics. Moving ahead, the company is developing a new at-home (or anywhere else) PCR-based COVID-19 testing, screening, and surveillance platform that delivers rapid results via smartphone. It relies on the company's Direct Saliva extraction-free process and Logix Smart test reagents that are pre-packaged in saliva receptacle tubes.  A person simply adds a swab or saliva sample to the receptacle tube and places the tube inside the device, which is then activated using a smartphone app and delivers rapid PCR COVID-19 results directly to the smartphone. Co-Diagnostics has submitted a EUA application to the FDA for the saliva test. The company says eliminating the extraction process has the potential to increase throughput and lower costs of COVID-19 testing, all without compromising quality or accuracy. The company also offers a mail-in COVID-19 saliva test through Walgreens Find Care, a digital health platform on the retailer’s website and mobile app. Once the kit arrives, an individual registers her test online, deposit a saliva sample in the collection vial and return it using the prepaid FedEx Priority Overnight shipping package. Results are typically available within 24-48 hours delivered by text or voice message.   Meanwhile, Co-Diagnostics has completed principal design work for a PCR test that would allow researchers to identify certain mutations in a newly detected variant of the SARS-CoV-2 virus out of England.  Over in India, its manufacturing and sales joint venture with CoSara Diagnostics Pvt Ltd has received clearance from the Central Drugs Standard Control Organization (CDSCO) to build and sell its Saragene COVID-19 2-gene multiplex RT-PCR test as an in-vitro diagnostic. The CDSCO is India’s equivalent of the FDA. Inflection points: Boost availability of Logix Smart Coronavirus test kits COVID-19 tests to drive sales On track for sustainable profitability  What the broker says: In a note to clients on November 17, 2020, H.C. Wainwright & Co said Co-Diagnostics' Logix Smart ABC and Logix Smart SARS-CoV-2 (genes RdRp/E) multiplex, which it considers both highly accurate and affordable, could drive future domestic and international sales, this after the company obtained CE Mark for the Logix Smart ABC (Influenza A/B, SARS-CoV-2) test kit for simultaneous detection of Influenza A, Influenza B, and SARS-CoV-2, and has begun distributing it on a Research Use Only (RUO) basis to U.S. CLIA laboratories in the first week of October 2020. “We believe the company may seek Emergency Use Authorization (EUA) and ultimately 510(K) clearance for the ABC multiplex panel. This panel could drive both near-term and long-term sales, in our view, as patients presenting flu-like symptoms are likely to be required to test for COVID-19 even after the COVID-19 spread has largely resolved,” the broker's analysts wrote. They added: “We expect the company to continue to report top-line revenue similar to levels seen in 2Q20 and 3Q20. Our revenue projections for 4Q20 and the next 12 months (4Q20 to 3Q21) are $22M and $90M, respectively. The company’s operations could be sustainably profitable, in our view, particularly given the recent resurgence of the COVID-19 pandemic.“ The analysts noted that the company’s saliva-based CRL Rapid Response COVID-19 test, which its partner Clinical Reference Lab has begun selling, will also help drive top-line growth in the coming quarters. H.C. Wainwright currently has a Buy rating on stock with a $29 per share price target. What the boss says: “This year marked a critical inflection point in our ability to establish Co-Diagnostics as a leading global molecular diagnostic company, driving innovation through our proprietary technologies across the infectious disease market,” said CEO Dwight Egan in a recent statement. “Our CoPrimer technology platform is well-positioned to continue to play a significant role in providing the US and many countries around the world needed access to coronavirus testing. Demand for our Logix Smart COVID-19 Test drove record sales this year and, although COVID-19 test sales may not be as robust as in 2020, we anticipate demand for our portfolio of products to continue in 2021.”  Egan added: “Looking ahead, we expect our distribution platform, production capacity, product reliability, and ongoing product innovation will position the company for additional growth throughout the world. As the world seeks normalization, we anticipate continued demand for our COVID-19 tests and other diagnostic products as testing becomes a part of the long-term protocol for many organizations.” Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham