The US government has awarded a $760 million contract to Abbott Laboratories (ABT) for the delivery of 150 million rapid BinaxNOW Point of Care (POC) Covid-19 tests.
Testing will be potentially deployed to schools and to assist with serving other special needs populations, says the U.S. Department of Health and Human Services (HHS) and the Department of and Defense (DOD).
“The introduction of Abbott’s antigen test is another incredibly valuable result of President Trump’s all-of-America approach to constructing our world-leading COVID-19 testing capacity,” said HHS Secretary Alex Azar.
“By strategically distributing 150 million of these tests to where they’re needed most, we can track the virus like never before and protect millions of Americans at risk in especially vulnerable situations.”
The Abbott BinaxNOW COVID-19 Ag Card has just received emergency use authorization from the US Food and Drug Administration (FDA), does not require instrumentation, and will deliver Covid-19 test results in 15 minutes or less.
It uses nasal swabs and is simple to use, inexpensive, and can be easily employed by medical personnel or trained operators in certain non-clinical environments operating through a CLIA certificate.
Abbott says it has the capability to scale up to meet the demand for antigen testing across the country and is the only known source that can immediately provide the required items to meet HHS’s urgent needs. (See Abbott stock analysis on TipRanks)
“Early data for ABT’s test demonstrated sensitivity and specificity of 97.1%/98.5% when used within the first seven days of symptom onset. Abbott plans to ship “tens of millions” of tests in September and expects to ramp to 50M tests/month by the beginning of October” commented Canaccord Genuity’s Max Masucci on the news.
Shares in ABT are now trading up 28% year-to-date, with a 10% spike over the last five days following the FDA approval. The stock has a cautiously optimistic Moderate Buy Street consensus with 10 recent buy ratings, 2 holds and 1 sell. Meanwhile the average analyst price target of $110 now suggests shares could pull back from current levels.
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