Rapid Testing Could Give a Boost to Quidel

04/03/2020 5:00 am EST

Focus: HEALTHCARE

Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

Joining the fight in the coronavirus pandemic is Quidel (QDEL); the company offers a number of rapid point-of-care tests for detection and diagnosis of many critical diseases and conditions, notes Mike Cintolo, growth stock specialist and editor of Cabot Top Ten Trader.

These tests include influenza, respiratory syncytial virus, Strep A, herpes, pregnancy, thyroid disease and fecal occult blood, among others.

With point-of-care testing, hospitals, urgent care centers and emergency rooms can see the test results within minutes instead of sending them out to a laboratory (getting a response in a few days), and that is boosting this firm’s prospects during the current pandemic.

The number of coronavirus tests has ramped up in the U.S. (running north of 100k per day), but speed of results is still an issue. Thus, the FDA just approved Emergency Use Authorization for Quidel’s Lyra® SARS-CoV-2 Assay — which detects nucleic acid—to include three additional thermocyclers (machines that amplify segments of DNA).

As well, the authorization adds to the specimens from which testing can be done, now including nasal and nasal turbinate swabs. The company says that the reagents used in the test “allow simple transport and storage, improved workflow, shorter time to result, and other benefits that favorably affect diagnostic test outcome.”

Quidel has also received The CE Mark, which allows it to market and sell its test in Europe and elsewhere, and got the thumbs up from Canadian authorities, too.

Historically, growth hasn’t been fantastic here, but Quidel’s revenue growth has been picking up steam, Q4 results easily trounced estimates and there’s no question demand for its new devices should be strong in the months ahead .

QDEL broke out of a year-long base in November and rallied to the low 80s near the start of this year, after which it has some gyrations but was still holding in that area as of two weeks ago.

But that’s when the stock clearly changed character — QDEL has boomed each of the past two weeks on monstrous volume and is perched near its highs. Dips would be interesting, with a stop in the prior (low $80s) range.

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