Abbott Labs is developing new coronavirus test for mass screening as US tries to reopen the economy; shares rise

Earnings

A box containing a 5-minute test for COVID-19 from Abbott Laboratories is pictured during the daily briefing on the novel coronavirus, COVID-19, in the Rose Garden of the White House in Washington, DC, on March 30, 2020.

Mandel Ngan | AFP | Getty Images

Abbott Laboratories says it is ramping up production of its coronavirus test kits, including a new tool that could enable mass Covid-19 screening, as President Donald Trump seeks to reopen parts of the U.S. economy as early as next month. 

The company is on track to ship 4 million this month of its new antibody tests, which indicate whether a person has had Covid-19 in the past and was either asymptomatic or recovered, Abbott CEO Robert Ford said during an earnings conference call with investors Thursday. It plans to ramp up to 20 million shipments per month, beginning in June, he said, adding there’s a need to manufacture more tests.

“It’s clear that the demand for testing is big, it’s not going to go away,” he told investors.

Abbott shares rose nearly 4% on Thursday after it reported first-quarter earnings and revenue that beat Wall Street’s expectations. It suspended its full-year forecast, however, citing uncertainty surrounding the coronavirus outbreak, which has infected more than 2 million people worldwide and killed at least 139,419 as of Thursday, according to data from Johns Hopkins University. Demand for its other diagnostic tests fell during the quarter as most Americans stayed home to slow the spread of the virus.

The Chicago-based medical equipment company has been deemed essential in getting the U.S. economy back on its feet. Abbott has launched three coronavirus tests in the United States, including a rapid test that produces results in as little as five minutes and the newly released test that shows if a person has antibodies against the virus. Ford told investors that the company is selling its new antibody test at the same price as its influenza tests.

The company is working with CVS Health to get its tests “outside of the hospital” and into places like urgent-care clinics and nursing homes, Ford said. “Our first phase was to roll this out to ensure the front-line workers were tested and protected. As we start to ramp up manufacturing … we’ll start to implement those actions into the month of May into June.”

Ford said the company is also working on a fourth diagnostic test for the coronavirus: A “lateral flow” blood test that can provide a diagnosis even more quickly.

“This will allow us to scale up to numbers much more significant,” he said. “This falls in our ability to look at mass testing for the general population. They are on time now and they are almost there.” 

He said Abbott sees its coronavirus test kits as “additional layers” of security as companies across the U.S. seek to bring their employees back to work.

“We know we’re going to be working a little bit different than we’ve historically been working. I think we’ll see people wearing masks, I think we’ll see more cleaning of doorknobs and elevator buttons,” he said. “Running these tests on top of what you are doing will provide another tool to assist schools and companies to get people back to work.”

The company’s net earnings fell to $564 million, or 31 cents per share, in the quarter ended March 31, from $672 million, or 38 cents per share, a year earlier.

Net sales rose 2.5% to $7.73 billion, ahead of the average estimate of $7.34 billion.

On an adjusted basis, the company reported first-quarter earnings of 65 cents per share, higher than the 58 cents analysts polled by Refinitiv expected.

— Reuters contributed to this article. 

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