Co-Diagnostics, Inc. (CODX) Misled Investors Regarding Demand for its Logix Smart™ COVID-19 Test
A shareholder filed a class action on behalf of all persons and entities that purchased Co-Diagnostics, Inc. (NASDAQ: CODX) securities between May 12, 2022 and August 11, 2022, for violations of the Securities Exchange Act of 1934. Co-Dx purports to develop, manufacture, and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or RNA), including robust and innovative molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural application.
According to the complaint, on April 6, 2020, Co-Dx announced it had received Emergency Use Authorization for its Logix Smart™ COVID-19 detection test from the FDA, allowing it to commence sales of the test to laboratories certified by the Center for Medicare and Medicaid Services under the Clinical Laboratories Improvements Act (“CLIA”) to accept human samples for diagnostics testing throughout the United States. Co-Dx has sold its Logix Smart™ COVID-19 test to such CLIA labs since that time.
During the class period, defendants touted the Logix Smart COVID-19 Test, reassuring investors about the demand for the product. At the same time, defendants failed to disclose that: (1) demand for its Logix Smart™ COVID-19 Test had plummeted throughout the quarter ended June 30, 2022, and (2) as a result, Defendants’ positive statements about the demand for its Logix Smart™ COVID-19 Test lacked a reasonable basis.
On August 11, 2022, Co-Dx announced its financial results for the quarter ended June 30, 2022, in which the Company disclosed revenue of $5.0 million for the quarter ended June 30, 2022, down from $27.4 million during the prior year period, a decline of almost 82%. The Company primarily attributed the decrease to lower demand of the Logix Smart™ COVID-19 Test. On this news, the price of Co-Dx’s stock fell almost $2.00, or 30.65%, to close at $4.48 per share on August 12, 2022.
Next Steps: If you acquired shares of Co-Diagnostics, Inc. between May 12, 2022 and August 11, 2022, you have until October 17, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.