It is not a new scenario where an illness or problem starts to become a big deal in the public and there is a small-cap company that “has a solution for that” which happen to be known by very few investors and even fewer members of the public. 24/7 Wall St. has covered the diagnostics companies, vaccine makers and other drug makers which have had big announcements around the rising coronavirus outbreak. Many of their shares have seen exponential gains during this time.

Aytu BioScience, Inc. (NASDAQ: AYTU) is one of these tiny companies which most investors would have never heard of prior to Tuesday. This new news from Tuesday, along with other test kit announcements from other larger diagnostics companies, has helped to weigh on shares of Co-Diagnostics, Inc. (NASDAQ: CODX).

The company announced that it had signed an exclusive distribution agreement “for the right to commercialize a clinically validated and commercially used coronavirus 2019 (COVID-19) IgG/IgM Rapid Test.” the company’s press release indicated that the test has been licensed from L.B. Resources, Ltd. in Hong Kong which licensed North American rights from a product developer named Zhejiang Orient Gene Biotech Co., Ltd.

The press release noted that the test is intended for professional use, but the differentiating factor here is that it is said to deliver clinical results in a time frame of 2 minutes to 10 minutes wherever the test is administered. Aytu’s release also indicated that the agreement grants Aytu the exclusive right to distribute this test product in the United States for a period of three years and with additional automatic renewals for 3 years thereafter.

In addition to the short period of 2 minutes to 10 minutes for test results, Aytu’s release indicated that the tests help to facilitates patient treatment decisions quickly based off of small specimens (listed as 5 µL of serum/plasma or 10 µL of whole blood specimens) and that all of he necessary reagents are provided with no equipment needed.

Co-Diagnostics was last seen down 41% at $5.80, down from over $20.00 in the last ten trading days, as it is the company that had received the first CE Mark of approval and has been working with others to get more test kits out there. Co-Diagnostics was also shown to be able to sell reagents to other labs to use in their own diagnostics test kits. The company was also shown to be manufacturing and shipping coronavirus products to multiple countries.

Aytu was last seen trading up over 440% at $1.89 on Tuesday afternoon with a mere $55 million market cap, but its shares traded as high as $2.99 at the peak trade on the day. Its prior 52-week trading range had been $0.34 to $2.61, and Aytu’s stock chart looked similar to a downward staircase since last summer.

As a reminder on every microcap stock with limited histories like this that surge on big macro-trend news, caveat emptor.

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