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QuidelOrtho's (QDEL) Rapid Antigen Test Gets De Novo FDA Approval

QuidelOrtho Corporation QDEL recently announced that it has been granted a De Novo request from the FDA, allowing the company to market its new Sofia 2 SARS Antigen+ FIA (fluorescent immunoassay). It is the first rapid antigen test for detecting COVID-19 to be awarded FDA market clearance. It is intended for prescription use only and can be used in point-of-care settings.

The latest regulatory approval is likely to significantly boost QuidelOrtho’s Point of Care business unit.

A Few Words About the Test

The Sofia 2 SARS Antigen+ FIA is a lateral flow immunofluorescent assay used with the Sofia 2 fluorescent immunoassay analyzer. This is intended for the qualitative detection of the nucleocapsid protein antigen of SARS-CoV-2 in direct anterior nasal swab specimens from symptomatic individuals when tested within six days of symptom onset.

The Sofia 2 SARS Antigen+ FIA is intended for use by trained clinical laboratory personnel and individuals trained in point-of-care settings and capable of performing tests using Sofia 2 instruments.

The enhanced Sofia 2 SARS Antigen+ FIA Test kit includes other upgraded features, such as prefilled reagent vials, among others. The Sofia 2 instrument also offers two distinct workflows — WALK AWAY Mode and READ NOW Mode.

Significance of the Approval

The Sofia 2 analyzer utilizes QuidelOrtho’s proprietary fluorescent chemistry design and other techniques to provide an accurate, objective and automated result in 10 minutes. This is a marked reduction (33%) from the breakthrough 15-minute processing time achieved in the first iterations of the Sofia SARS Antigen FIA assay. The Sofia 2 system is also connected to QuidelOrtho’s data management system — Virena — which provides aggregated, de-identified testing and surveillance data in near-real time.

Per management, the De Novo authorization has enabled Sofia to become the predicate device upon which subsequent devices of the same type and intended use will be compared. This designation is expected to ensure that QuidelOrtho’s rapid testing technologies continue to actively prevent COVID-19 infections as it transitions to its endemic stage.

Industry Prospects

Per a report by Precedence Research, the global diagnostic testing market was valued at $165.58 billion in 2021 and is anticipated to exceed $348.75 billion by 2030 at a CAGR of approximately 8.6%. Factors like the increasing use of point-of-care diagnostic products and the rising elderly population leading to an increase in the chance of developing a wide range of illnesses (including diabetes) are likely to drive the market.

Given the market potential, the latest regulatory approval will likely provide a significant impetus to QuidelOrtho’s business.

Notable Developments

Last month, QuidelOrtho reported its fourth-quarter 2022 results, where it registered robust overall top-line performance. The company recorded strong revenues in the majority of its business units at constant exchange rate, excluding COVID-19 revenues. Excluding COVID-19 revenues, geographical results also improved in two regions.

In December 2022, QuidelOrtho announced that its TriageTrue High-Sensitivity Troponin I Test on the Quidel Triage MeterPro had been approved for use in Canada by Health Canada. Per the company, the innovative test will likely achieve high sensitivity and precision when used with the Quidel Triage MeterPro platform.

The same month, QuidelOrtho announced that its subsidiary, Ortho Clinical Diagnostics Trading (China) Co., Ltd., had inked a definitive agreement with Shanghai Medconn Biotechnology Co., Ltd., a subsidiary of Shanghai Runda Medical Technology Co., Ltd. The joint venture is aimed at developing and manufacturing assays in China for QuidelOrtho’s VITROS platform.

Price Performance

Shares of the company have lost 18.4% in the past year compared with the industry’s 38.8% decline and the S&P 500's 8.9% fall.

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Zacks Rank & Key Picks

Currently, QuidelOrtho carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Cardinal Health, Inc. CAH and Avanos Medical, Inc. AVNS.

Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hologic has gained 11.6% against the industry’s 12.4% decline in the past year.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.

Cardinal Health has gained 35.3% against the industry’s 6.2% decline over the past year.

Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.

Avanos has lost 13% compared with the industry’s 12.4% decline over the past year.

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Cardinal Health, Inc. (CAH) : Free Stock Analysis Report

Hologic, Inc. (HOLX) : Free Stock Analysis Report

QuidelOrtho Corporation (QDEL) : Free Stock Analysis Report

AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report

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