The Complaint alleges that on April 6, 2020, Co-Dx announced that it had received an Emergency Use Authorization for its Logix Smart™ COVID-19 detection test from the Food and Drug Administration, 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.
The Complaint further alleges that during the Class Period, Defendants repeatedly touted its 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 shocked investors when, after the market closed, the Company issued a press release and filed a report with the SEC on Form 8-K that disclosed its financial results for the quarter and 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 common stock declined $1.98, or 30.65%, from a closing price of $6.46 per share on August 11, 2022, to close at $4.48 per share on August 12, 2022.