Shares of Chembio Diagnostics (NASDAQ:CEMI) surged more than 100% in this morning’s premarket trading after the company revealed a multi-million dollar order for its Covid-19 rapid antigen tests. The CEMI stock closing price yesterday was down 67.5% from an April 5 high.
Readers may recall April 5 as the day that Chembio announced it had commercially launched a rapid test. This test was granted emergency-use authorization (EUA) by the U.S. Food and Drug Administration (FDA). CEMI stock jumped 60% on that day and traded more than 200 million shares, compared to the average daily trading volume of around 1 million shares.
Now the company has had some success in selling those tests.
Specifically, the diagnostic company focused on infectious diseases announced a $28.3 million purchase order from Bio-Manguinhos for the purchase of Chembio’s DPP SARS-CoV-2 antigen tests for delivery during 2021 “to support the urgent needs of Brazil’s Ministry of Health in addressing the Covid-19 pandemic,” according to a release.
The test is designed to detect the SARS-CoV-2 antigen, which indicates an active Covid-19 infection. It makes the detection in only 20 minutes using a minimally invasive nasal swab.
“We believe the purchase order validates the investments we made earlier this year in inventory for the DPP SARS-CoV-2 Antigen test and look forward to ramping up production,” said Javan Esfandiari, Chembio’s EVP, chief science and technology officer. “We are very proud to provide this test in Brazil and assist in efforts to manage the global pandemic,” he added.
Global Need for Products Fueling CEMI Stock
The demand for the types of products Chembio produces is likely to remain strong for some time. As healthcare systems work on ways to create efficiencies, these sorts of rapid tests could see rapid adoption.
Chembio’s portfolio of dual path platform (DPP) based point-of-care tests with FDA regulatory approvals include an HIV-Syphilis System, an HIV 1/2 Assay, a Zika IgM System and an Ebola Antigen System. Additionally, DPP-based tests have received regulatory approvals from the World Health Organization, CE-Mark, ANVISA and other global organizations, where they aid in the detection and diagnosis of several other critical diseases and conditions.
Brazil registered 948 deaths from the virus in a 24-hour period ending at midnight Sunday, according to figures updated by the National Council of Health Secretaries and Ministry of Health. More people have died from Covid-19 in Brazil than any other country except the U.S.
While infections are decreasing in the South American country, some 38,206 new infections are reported on average each day, according to Reuters. The country has administered at least 126.6 million doses of Covid vaccines so far, enough to have vaccinated about 30% of the country’s population.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor. His Substack newsletter, TLV Strategist, covers the Israel business scene.