Given that making fast COVID-19 testing widely available will be a critical prerequisite for the safe reopening of the U.S. economy, it's no surprise that companies the manufacture those coronavirus tests are feeling the bright glare of investor attention. Quidel (QDEL) specializes in the diagnosis and detection of diseases, offering tests with fast turnaround times at the point of care, and some of its big wins in the COVID-19 diagnostics space have investors buzzing about the stock.

In mid-March, Quidel became one of the first companies to receive an Emergency Use Authorization (EUA) from the Food and Drug Administration for a COVID-19 diagnostic test. That test uses molecular polymerase chain reaction (PCR) technology and requires the patient's sample to be sent to a certified testing laboratory for processing. But since then, Quidel has focused on rapid immunoassay COVID-19 tests that can be analyzed in clinics while patients wait for their results.

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On May 8, the company received an EUA for a COVID-19 antigen test that runs on its Sofia 2 rapid immunoassay analyzer -- an inexpensive desktop instrument. That new test can detect the SARS-CoV-2 virus in a mucous specimen in 15 minutes. About a month later, Quidel got an EUA for a test that uses its older Sophia 1 instruments, which increased the number of clinics and hospitals that can process its COVID-19 tests. Between the two models of Sofia analyzers, there's an installed base of 43,000 devices. They also work with tests to diagnose influenza A and B, respiratory syncytial virus (RSV), strep, and Lyme disease, among other conditions and diseases.

A huge government deal announced this week

The company's immunoassay antigen test is less accurate than molecular PCR tests and produces false negatives often enough that the company says that a negative result should be viewed as "presumptive," and ought to be confirmed with a molecular PCR test if recent exposure or the presence of symptoms suggest there's a risk of COVID-19. But its low cost and rapid speed make it ideal for high-volume screening in a variety of settings, a fact that has led the federal government to make a massive purchase of Sofia instruments and tests.

The Department of Health and Human Services (HHS) announced on Tuesday that it plans to buy Quidel's Sofia analyzers and COVID-19 antigen tests, along with products from competitor Becton, Dickenson (BDX 1.85%), and send them to every one of the country's 15,400 skilled nursing homes.

That should be a substantial boost for Quidel. HHS said that shipments of available units over the next six to eight weeks should reach most nursing homes. The government plans to provide the facilities with 400 tests to start with and make more tests available for under $25 each. By September, HHS expects to make 15 million to 20 million tests available each month, partly paid for by the federal government.

The news flow is a powerful tailwind

That wasn't the only boost Quidel has gotten from Washington. The Biomedical Advanced Research and Development Authority, an office of HHS, announced in June that it's funding Quidel's development of a single 15-minute, point-of-care test that will check for four respiratory viruses in one Sofia 2 assay. The goal of the $635,000 contribution from the agency is to help the company develop an all-in-one test for SARS-CoV-2, Influenza A, Influenza B, and RSV that will be ready to be awarded an EUA by April. The stock rose 28% in the two days after the BARDA funding was announced.

Stock movements like that are sure to get investors talking. But Quidel was already buzz-worthy with its industry-leading move into COVID-19 antigen tests; the stock is up more than 220% for the year.

This decision this week that will send the healthcare company's products to nursing homes en masse could mark the first of many big deals for large-scale screening, and Quidel's next challenge may involve meeting the demand. In the company's last conference call, management said that Quidel is building about 1,000 Sofia analyzers a month, but hopes to ramp up production to 7,000 per month by September. That could be just the beginning.