Adaptive’s T-Detect COVID Test Cleared For Emergency Use In US; Shares Pop 18%

Adaptive Biotechnologies’ T-Detect COVID diagnostic test, which was designed to confirm a recent or prior COVID-19 infection, has been authorized for emergency use by the US Food and Drug Administration (FDA). Shares of the biotech company surged 18.2% in after-hours trading on March 5, after closing 3.3% lower on the day.

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T-Detect is the first-in-class clinical T cell-based test introduced by Adaptive (ADPT) for detecting the SARS-CoV-2 virus infection in patients. Notably, T cells are the fastest responders in the immune system for detecting any virus.

The US regulator’s decision was based on a clinical validation study that demonstrated the test has a sensitivity of 97.1% from the date of diagnosis using RT-PCR and a specificity of 100%. Sensitivity refers to the identification of a correct positive case (true positive), while the specificity of the test identifies a negative case (true negative).

Adaptive CEO Chad Robins said, “The authorization of T-Detect COVID represents a true breakthrough for patients and a pivotal milestone for the diagnostic testing paradigm.”

“We have proven that it is possible to read how T cells detect disease in the blood, and this is just the beginning of a pipeline of tests for many other indications,” Robins added. (See Adaptive stock analysis on TipRanks)

T-Detect COVID is the first clinical test that resulted from Adaptive’s TCR-Antigen Map partnership with Microsoft (MSFT), which began in 2018.

On March 3, Goldman Sachs analyst Salveen Richter downgraded the stock to Hold from Buy and decreased the price target to $63 (49.2% upside potential) from $74, after Roche’s Genentech said “it intends to suspend the development of a T cell receptor-based cell therapy being developed in collaboration with the company against a shared antigen target.”

In a note to investors, Richter said Genentech’s intention “removes a near-term key value driving catalyst,” but she views “Adaptive’s drug discovery efforts as intact and remains positive on its immune-medicine platform and clinical diagnostic programs.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 1 analyst suggesting a Buy and 2 analysts recommending a Hold. The average analyst price target of $65.67 implies 55.5% upside potential to current levels. Shares have gained about 72% over the past year.