Bullish options flow was detected in ABT stock on August 28, 2020.
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Abbott has been awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the production and delivery of BinaxNOW rapid point-of-care antigen tests for COVID-19. The initial order is valued at $760M for 150M tests and distribution costs. This was a sole-source acquisition to meet an urgent and compelling national need. An Emergency Use Authorization has been approved and signed by the FDA for this contract award. This is a four-month contract with no option periods. Locations of performance are Florida and Maine, with a Dec. 31, ordering period end date. Using customer is the Department of Health and Human Services. The maximum dollar value on the contract is $1.5B. Type of appropriation is FY20 CARES Act funding. The contracting activity is the Defense Logistics Agency.
CNBC’s Kevin Stankiewicz writes that Abbott has trials underway to determine if a rapid COVID-19 test can be effectively used on asymptomatic carriers. Stankiewicz is citing commentary from Abbott CEO Robert Ford. Source: https://www.cnbc.com/2020/08/28/abbott-has-trial-of-its-rapid-coronavirus-test-for-asymptomatic-people.html
Following questions from investors, Wells Fargo analyst Larry Biegelsen says the FDA bar for at-home use is “very high” and that he believes Abbott (ABT) is focused on the healthcare channel, not bringing its BinaxNOW rapid Covid-19 test to the home. The company is also pursuing approval of a different rapid antigen test outside the U.S. called PanBio, Biegelsen notes, and he expects to hear more about this in the next month or so. Further, Abbott does not believe BinaxNOW will significantly impact ID NOW because it sees the patient and testing venue as being different, Biegelsen points out. Following Abbott’s approval, the analyst believes there could be some selling price pressure on tests such as Becton Dickinson’s (BDX) Veritor. However, demand remains high for COVID testing and Veritor is more focused on nursing homes and other venues, he adds.
Citi analyst Joanne Wuensch raised the firm’s price target on Abbott to $130 from $110 and keeps a Buy rating on the shares after the company received FDA approval for its BinaxNOW antigen test, the first Covid-19 diagnostic test where results can be read directly from the testing card. This is a “game changer,” says the analyst, who believes Covid-19 testing will be part of our lives for some time and that Abbott “is leading the way.”
On August 26, 2020, Abbott (NYSE: ABT) announced that the FDA had issued Emergency Use Authorization (EUA) for its BinaxNOW™ COVID-19 Ag Card rapid test for detection of COVID-19 infection. Abbott will sell this test for $5. It is highly portable (about the size of a credit card), affordable and provides results in 15 minutes. BinaxNOW uses proven Abbott lateral flow technology, making it a reliable and familiar format for frequent mass testing through their healthcare provider. With no equipment required, the device will be an important tool to manage risk by quickly identifying infectious people so they don’t spread the disease to others.