Co-Diagnostics (CODX -1.51%), a maker of molecular diagnostics tests, fell 10% on Tuesday. The stock closed at $7.01 a share on Monday, then opened at $6.95 on Wednesday before dropping to a low of $6.30 shortly before 2 p.m. ET. Co-Diagnostics has a 52-week low of $3.66 and a high of $11.82.
The stock is down more than 29% so far this year. It's worth noting that it was a bad day, in general, for biotech stocks, with the S&P Biotech ETF (XBI 1.60%) down nearly 4%.
Investors may have been skittish about the company's upcoming second-quarter earnings report, which is scheduled to be released Thursday, after market close. They may have decided to take profits after the stock reached $7.13 on Monday, its highest point since February.
The company was coming off a solid first-quarter report, with revenue of $22.7 million, up 13% year over year, and earnings per share (EPS) of $0.34. This compared to EPS of $0.26 in the same period last year.
Much of that revenue, however, is tied to the company's sales of its Logix Smart COVID-19 Test. COVID-19 cases are waning, which may explain why the stock has fallen despite having an already low price-to-earnings ratio of 5.23.
It's a little early to jump ship regarding Co-Diagnostics. Not only will its COVID-19 test kits continue to sell, as long as the virus variants are around, but the company has already developed a polymerase chain reaction (PCR) test for the monkeypox virus, which began shipping on July 11. Co-Diagnostics' strength has been its ability to quickly develop tests for new diseases.
While no one is saying that the monkeypox virus will be as big a scourge as COVID-19, on Wednesday, Xavier Becerra, the U.S. Health and Human Services (HHS) secretary, issued a determination that will allow the Food and Drug Administration to grant emergency use authorizations (EUA) for monkeypox vaccines.
This decision comes less than a week after Becerra declared monkeypox a public health emergency in the U.S. While Co-Diagnostics doesn't make vaccines, its reagents to test for the monkeypox virus will now likely be more in demand.