Health and Healthcare

Aytu BioScience Soars, Pending Approval of Coronavirus Test

Chris Lange

Published: March 23, 2020 7:05 am

Aytu BioScience Inc. (NASDAQ: AYTU) has made a splash in the market since it got into the coronavirus test business. This company was largely unknown until it announced that it had a test for COVID-19.

The markets have been slaughtered in the past few weeks. The Dow Jones industrial average, S&P 500 and Nasdaq each have lost nearly a third of their value in a month. However, Aytu has seen the opposite, a meteoric rise in its common stock price since the middle of February.

The future looks bright for this company, and all the pieces are there for it to profit from its coronavirus tests. It just needs authorization from the U.S. Food and Drug Administration (FDA).

Coronavirus Test

Aytu BioScience secured 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 in Hong Kong. It licensed North American rights from a product developer named Zhejiang Orient Gene Biotech.

The test is intended for professional use, at point of care. What stands out here is that it is said to deliver clinical results in two to 10 minutes, wherever the test is administered. Aytu’s release also indicated that the agreement grants it exclusive U.S. distribution for a period of three years, with additional automatic renewals for three years thereafter.

Competition

While Aytu pursues its FDA authorization, other companies are working on tests as well.

Switzerland-based pharmaceutical giant Roche on Friday received Emergency Use Authorization (EUA) from the FDA for its cobas SARS-CoV-2 Test. In its announcement of the emergency approval, Roche said its test detects the virus that causes COVID-19 using swab samples from patients who meet COVID-19 clinical or epidemiological criteria for testing.

Like Aytu’s Rapid Test, the Roche test has received the CE marking. The machines that analyze the swab samples can process up to 4,128 results in 24 hours.

Co-Diagnostics Inc. (NASDAQ: CODX) and Quest Diagnostics Inc. (NYSE: DGX) are other major players in the mix.

For Quest, the new test service aids the presumptive detection of nucleic acid in respiratory specimens of patients meeting Centers for Disease Control and Prevention (CDC) clinical criteria for COVID-19 testing.

Co-Diagnostics has noted that both domestic and international demand has surged for its novel coronavirus detection kits in recent weeks, leading to increased product shipments. This follows the FDA’s change in policy on February 29, as well as an ever-larger number of patients testing positive for the disease worldwide.

Timeline

As mentioned, the COVID-19 IgG/IgM Rapid Test must still be approved for use in the United States by the FDA. Aytu said in its licensing announcement that it “expects to pursue U.S. regulatory clearance and expects to consult with the [FDA] about qualifying the test under FDA’s Emergency Use Authorization.”

The timeline here is what could hold Aytu back. A few other companies are already developing tests and Aytu is late to the party. If anything, the EUA from the FDA could help a lot with this.