Co-Diagnostics Inc. (CODX) Accused of Misleading Shareholders
On February 24, 2020, Co-Diagnostics announced that it had received regulatory clearance to sell its tests in the European Community and by April 6, 2020, the Company announced that it had received emergency use authorization for its tests from the U.S. Food and Drug Administration (“FDA”). As time progressed, Co-Diagnostics consistently made unequivocal statements touting that its COVID-19 tests were 100% accurate. As a result of its purported success, Co-Diagnostics’ stock, which had previously almost been delisted from NASDAQ for consistently trading under a dollar, soared to a price of $29.72 per share and a market capitalization of over $800 million. However, on May 14, 2020, after Co-Diagnostics maintained its statements about the success of its test in its first quarter 2020 results, public reports began circulating questioning Co-Diagnostics’ claims of 100% accuracy because the Company was reluctant to participate in U.S.-based testing to verify its claims. Later that evening, the U.S. FDA announced publicly that no COVID-19 test is 100% accurate. On this news, the stock declined 42% from a high of $29.72 per share on May 14, 2020, to close at $17.07 per share on May 15, 2020.
