Abbott Wins FDA Approval For At-Home Covid-19 Test; Street Says Buy

Abbott Laboratories has been granted Emergency Use Authorization (EUA) by the US Food and Drug Administration (FDA) for its virtually guided at-home BinaxNow COVID-19 Ag Card rapid test.

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Abbott (ABT) said that the $25 test is the cheapest available at-home antigen test. The portable test, which provides results in 15 minutes, does not require any equipment for processing samples. The FDA authorized the test for prescription use at home with self-collected nasal swab samples from individuals ages 15 years or older who are suspected of having COVID-19 by their healthcare provider within the first seven days of symptom onset.

Additionally, Abbott has teamed up with telehealth service eMed and expects to deliver and administer 30 million BinaxNOW at-home tests in the first quarter of 2021, with an additional 90 million planned for the second quarter. Once a BinaxNOW at-home test kit is available at home, the user logs into the eMed portal for a guided testing procedure and can expect results in about 20 minutes.

“As the pandemic has evolved, the need for rapid testing has only grown. Unfortunately, we’re still hearing that many people can’t access testing as quickly as they need it,” said Abbott’s CEO Robert B. Ford. “That’s why Abbott is bringing our rapid BinaxNOW test and NAVICA platform into homes through this partnership with eMed, which allows us to maintain the integrity of the testing process, get even closer to people who need testing and help provide the confidence we need to help get back to living with a bit more normalcy.”

Abbott disclosed that since launching BinaxNOW in August, the drugmaker has ramped up capacity to 50 million tests a month at its US facilities that are currently being distributed through the federal government.

Meanwhile, Raymond James analyst Jayson Bedford this week reiterated a Buy rating on the stock following a call with Abbott’s management.

“The ‘third wave’ of COVID-19 has raised the near-term uncertainty level (for the group), but ABT remains well positioned given its diversified portfolio, and the COVID-19 testing tailwind, which lessens the near-term risk profile,” Bedford wrote in a note to investors. “Management is executing well, and enters 2021 with momentum.” (See Abbott stock analysis on TipRanks)

The rest of the Street firmly shares Bedford’s bullish outlook. The Strong Buy analyst consensus breaks down into 9 Buys versus 2 Holds. With shares up 24% this year, the average price target of $120.44 now implies another 12% upside potential over the coming year.