New Covid-19 test and a decent first quarter buoy Abbott

Diagnostics prove defensive for Abbott, as the company jumps the FDA’s gun with its third coronavirus test.

The US FDA is slowly authorising more serological Covid-19 tests – those that can detect immunity in a prior coronavirus patient. Yesterday Abbott launched an antibody test without first obtaining the FDA’s authorisation, and this, plus today’s better-than-feared first-quarter results, pushed the company’s shares up 5%.

The pressures of the pandemic caused Abbott to pull its 2020 guidance, which had called for organic sales growth of 7-8%, but the company is not suffering as others are. First-quarter revenue of $7.7bn exceeded consensus, and the company's stock is up 10% since the start of the year, versus a 15% decline for the S&P 500. This is partly thanks to a steady dripfeed of new Covid-19 tests, its most recent being a lab-based assay that detects immunoglobulin G in the blood.

Abbott’s Sars-CoV-2 IgG test identifies the IgG antibody that is produced in the late stages of infection and may remain in the bloodstream for months or even years after a patient has recovered. In this, the test differs from the three antibody tests the FDA has so far authorised. These detect both IgG and IgM; IgM is produced earlier, and is generally detectable in blood several days after initial infection. 

Abbott claims that its new test, when performed at least two weeks after a patient has first exhibited symptoms, has sensitivity of 100% and specificity of 99.5%. The company is also working to produce a test for IgM in the near future. 

FDA EUAs granted for Covid-19 antibody tests 
Date EUA Issued Company Test Antibodies detected
April 14 Chembio Diagnostic System DPP Covid-19 IgM/IgG System IgM and IgG
April 14 Ortho Clinical Diagnostics Vitros Anti-Sars-CoV-2 Total Reagent Pack Total antibody (incl IgM and IgG)
April 1 Cellex qSars-CoV-2 IgG/IgM Rapid Test IgM and IgG
Source: FDA.

Abbott’s IgG test is probably of most use as a means of identifying people who have long recovered from their infection, or those who were asymptomatic. It runs on Abbott’s Architect i1000SR and i2000SR instruments; these can run 100-200 tests per hour, and there are more than 2,000 of them in US labs. In time the test will also be run on Abbott’s more up-to-date Alinity i system.

Though Abbott has launched the test without a US emergency use authorisation, it does plan to file for EUA, as well as a CE mark submission in the EU. 

It already has EUAs for two tests: its high-throughput RealTime SARS-CoV-2 assay was authorised on March 18, and a high-speed, low-throughput portable test, capable of providing results in 15 minutes, was authorised on March 27. Neither of these is an antibody test – instead they detect viral RNA to diagnose active infections. 

Abbott is one of the best-placed large medtechs, but a call today its chief executive, Robert Ford, conceded: “Q2 will likely be our toughest quarter in the year, especially for our core lab business and our cardio and neuro businesses.”

Its diabetes business is arguably underperforming too, thanks to the delayed US approval and launch of Freestyle Libre 2, a next-generation version of its successful glucose monitor. This has been stuck in regulatory limbo for some time, and management would not provide an update on its status today.

But Abbott's big diagnostics presence gives it a strong defence, and a growth story for investors to focus on in these turbulent times.

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