Shares of Co-Diagnostics (NASDAQ:CODX) were jumping 17.4% as of 3:09 p.m. EST on Wednesday. The gain came after the company announced that its joint venture, CoSara Diagnostics, received clearance in India to market the Saragene COVID-19 diagnostic test.
Why are investors cheering Co-Diagnostics' announcement so much? It's not every day that a company gets a green light to market a product in the country with the second-largest population in the world.
India has had nearly 9.3 million cases of COVID-19 reported so far this year. Although the number of daily cases has declined in recent weeks, more than 40,000 new cases are diagnosed in the country daily. India's prime minister supports increasing the availability of genomic COVID-19 tests to help keep the positive test rate below 5%.
This wasn't CoSara's first molecular diagnostics test to win clearance in India, though. Co-Diagnostics' joint venture previously received clearance in the country for tests for mycobacterium tuberculosis, malaria, hepatitis B, hepatitis C, and human papillomavirus.
Investors will want to watch the financial impact of Saragene COVID-19 sales in India for Co-Diagnostics. The healthcare stock sank last week after the company missed analyst estimates with its third-quarter results. But today's positive development in combination with the worsening of the COVID-19 pandemic in many countries could translate to stronger revenue and earnings growth for Co-Diagnostics in the fourth quarter.