10-K: Co-Diagnostics Reports Annual Results, Withdraws FDA Submission for At-Home COVID-19 Test

Sentiment:

Annual Results 27 March 2025 4:10 PM

Co-Diagnostics, Inc. files its annual report on Form 10-K, detailing financial results for 2024 and announcing the withdrawal of its FDA 510(k) submission for its at-home COVID-19 PCR test.

Delay expectedThe company withdrew its FDA 510(k) application for its at-home COVID-19 PCR test and plans to resubmit with an enhanced version, delaying the potential launch of the product.

Capital raiseThe company has entered into an Equity Distribution Agreement (the ATM Agreement) with Piper Sandler & Co., pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $17,111,650 from time to time through Piper Sandler acting as our agent, under our prospectus supplement dated October 18, 2024.As of December 31, 2024, we have sold 314,707 shares of common stock under the ATM Agreement resulting in net proceeds to the Company of $0.2 million.

Worse than expectedThe company's revenue decreased by 43% compared to the previous year.The company's net loss increased compared to the previous year.

Summary

Co-Diagnostics, Inc. reported a net loss of $37.6 million for the year ended December 31, 2024, compared to a net loss of $35.3 million for the previous year.
Total revenue decreased by 43% to $3.9 million, primarily due to lower grant revenues.
The company withdrew its FDA 510(k) application for its Co-Dx PCR Pro instrument, COVID-19 test, and mobile app for over-the-counter use, planning to resubmit with an enhanced version of the test.
Operating expenses decreased slightly, driven by lower stock-based compensation and R&D spending, offset by increased personnel and legal costs.
The company's cash, cash equivalents, and marketable investment securities totaled $29.7 million as of December 31, 2024.
Co-Diagnostics is developing its Co-Dx PCR platform for point-of-care and at-home testing, with plans to expand its test menu to include influenza A/B, RSV, TB, and HPV.
The company is actively pursuing CE-IVD compliance under IVDR through the Annex IX route to conformity, with a grace period until 2028 for Class B devices.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are some positive aspects, such as decreasing operating expenses and continued development of the Co-Dx PCR platform, the overall sentiment is negative due to the significant revenue decline, increased net loss, and withdrawal of the FDA submission.

Positives

Operating expenses decreased by 5% to $43.0 million, driven by lower stock-based compensation and R&D spending.
The company is actively pursuing CE-IVD compliance under IVDR through the Annex IX route to conformity, with a grace period until 2028 for Class B devices.
The company plans to submit the next iteration of the Co-Dx PCR COVID-19 test for 510(k) OTC clearance, following the collection of clinical evaluation data to support the new tests performance.

Negatives

Co-Diagnostics reported a net loss of $37.6 million for 2024, compared to a $35.3 million loss in 2023.
Total revenue decreased by 43% to $3.9 million, primarily due to lower grant revenues.
The company withdrew its FDA 510(k) application for its at-home COVID-19 PCR test due to concerns about shelf-life stability.

Risks

The company's ability to continue as a going concern is dependent on obtaining additional financing and generating profitable operations.
The molecular diagnostics market is highly competitive, with many larger companies possessing greater resources.
The company relies on a limited number of third-party suppliers for key raw materials.
The company's future success depends on securing regulatory approval for its Co-Dx PCR platform and related diagnostic tests.
The company is subject to stringent and changing data protection laws, privacy policies and data protection obligations, which continue to evolve and change over time.

Future Outlook

The company plans to resubmit its FDA application for its at-home COVID-19 PCR test with an enhanced version and continue developing its Co-Dx PCR platform for point-of-care and at-home testing, with plans to expand its test menu.

Management Comments

The decision to withdraw the submission was based on discussions with the FDA regarding the ability to detect a potential deterioration of one component of the test, related to shelf-life stability.
Following dialogue with the FDA and exploring the various courses of action available, we determined that the best long-term solution would be to submit a version of the test that has been enhanced to address the matter raised in the 510(k) review process.

Industry Context

The molecular diagnostics market is highly competitive, with many larger companies possessing greater resources. Co-Diagnostics is focusing on developing affordable, high-quality PCR testing solutions for point-of-care and at-home use.

Comparison to Industry Standards

The document does not provide enough information to make a detailed comparison to industry standards.
However, it mentions competitors such as BioMerieux, Siemens, Qiagen, Roche Diagnostics, Abbott Laboratories, Becton Dickinson, and Johnson & Johnson.
These companies are significantly larger and have more resources than Co-Diagnostics.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Bylaw Amendment	Amended and Restated Bylaws of Co-Diagnostics, Inc. (as amended by the Board of Directors on November 4, 2024)	2024-11-04	The amended bylaws outline the rules and procedures for the company's governance, including meetings, voting, and director responsibilities.

Legal Proceedings

The company is involved in two securities class action claims and three derivative actions related to alleged false and misleading press releases.
The company is also a party to three civil actions, two in the US and the other in the United Kingdom, based on breach of contract claims.

Related Party Transactions

Compensation paid to Seth Egan and Winston Egan, sons of the CEO, totaled $0.4 million and $0.1 million, respectively.
Richard Abbott, President, has an indirect ownership interest in Advanced Conceptions, Inc. through Whiteknob LLC, which could result in additional compensation upon achievement of certain milestones.
The company recognized $0.6 million of expense related to a services agreement with CoSara, the Companys equity method investment.

Stakeholder Impact

Shareholders may be concerned about the company's financial performance and the delay in launching the at-home COVID-19 test.
Employees may be affected by potential cost-cutting measures or changes in strategic direction.
Customers may experience delays in accessing the Co-Dx PCR platform and expanded test menu.

Next Steps

Resubmit FDA application for at-home COVID-19 PCR test with an enhanced version.
Continue development of Co-Dx PCR platform and expand test menu.
Pursue CE-IVD compliance under IVDR.
Actively monitor bid price and consider available options to resolve the deficiency and regain compliance with the Nasdaq Listing Rules.

Key Dates

Date	Description
2013-04-18	Co-Diagnostics, Inc. incorporated in Utah.
2017-01-01	Amended Exclusive License Agreement between Co-Diagnostics, Brent Satterfield, and DNA Logix, Inc.
2017-01-27	Shareholders Agreement between Co-Diagnostics and Synbiotics Limited.
2017-07-12	Common stock quoted on the NASDAQ market under the symbol CODX.
2019-06	Introduction of first Vector Smart PCR tests for mosquito-borne pathogens.
2020	First US-based company to receive a CE-marking for a COVID-19 test.
2020-03-19	CoSara received authorization to manufacture and sell COVID-19 tests in India.
2020-04-03	Received an EUA from the FDA for our Logix Smart Coronavirus Disease 2019 (COVID-19) kit.
2021-02	Brian Brown became our Chief Financial Officer.
2021-12	Acquired in-process research and development indefinite-lived intangible assets totaling $26,101,000.
2022-03	Board of directors authorized a share repurchase program that would allow the Company to repurchase up to $30.0 million of CODX common stock.
2022-05	The EC published the In Vitro Diagnostic Regulation (IVDR).
2023-07	Awarded $1.2 million in funding from the National Institutes of Health (NIH) as part of the Rapid Acceleration of Diagnostics (RADx) Tech program.
2023-08	Entered into a services agreement with CoSara, the Companys equity method investment, under which CoSara provides certain research and development consulting and support services.
2023-12	Submitted our proprietary Co-Dx PCR COVID-19 test cups, together with the Co-Dx PCR Pro instrument and mobile application, all designed for use in point-of-care and at-home settings, for review by the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA).
2024-06	Completed our first FDA application for 510(k) clearance for the Co-Dx PCR Pro instrument, the Co-Dx PCR COVID-19 Test, and the Co-Dx PCR mobile app for over-the-counter (OTC) use.
2024-10-18	Entered into an Equity Distribution Agreement (the ATM Agreement) with Piper Sandler & Co. (Piper Sandler), pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $17,111,650.
2025-01-10	Received a notice from the Listing Qualifications Department of The NASDAQ Stock Market (the Staff) stating that the bid price of our common stock for the previous 30 consecutive trading days had closed below the minimum $1.00 per share required for continued listing on The NASDAQ Capital Market.
2025-03-21	As of March 21, 2025, there were 33,572,643 shares of common stock, par value $ 0.001 per share, outstanding.
2025-07-09	The Company has a period of 180 calendar days, or until July 9, 2025 (the Compliance Date) to regain compliance with Listing Rule 5550(a)(2).

Keywords

Co-Diagnostics, PCR, diagnostics, COVID-19, FDA, revenue, regulatory approval, molecular diagnostics, Co-Primers, IVDR

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