CEMI Stock News: Chembio Diagnostics Inc skyrockets 60% after FDA greenlights rapid covid/flu tests

  • NASDAQ: CEMI has soared by over 60% on Monday, hitting the highest since February. 
  • The FDA granted Chembio Diagnostics Inc approval to market rapid COVID-19 tests.
  • Profit-taking may be seen on Tuesday, a natural correction after the surge.

Two tests in one and a result in 15 minutes – that is the promise of rapid covid and flu rapid probes made by Chembio Diagnostics Inc (NASDAQ: CEMI). Its product has been in the works for long months and allows medical staff to instantly know what patients are suffering from and how to treat them.

The big news that has sent shares of the Medford, New York-based company to the skies came from Washington. The Food and Drugs Administration has given the green light to Chembio's product, allowing the immediate commercialization of it. 

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Apart from bringing another rapid COVID-19 test to market in still troubled times, the firm's multiple tests show it can be used for both Type A and Type B influenza – and perhaps in the future to different variants of SARS-Cov-2, the virus behind the current disease. Additional coronaviruses may also appear in the future, and Chembio's multiple tests may be adequate for that as well. 

While America's vaccination campaign continues at full speed, other places are moving at a slower pace, and demand will likely continue into 2022. Chembio has a subsidiary in Brazil, which is suffering from a severe wave of covid dominated by homegrown variants. 

What does that mean for CEMI shares? 

CEMI Stock Price

NASDAQ: CEMI has surged by 60.23% on Monday in response to the news, closing at $5.64, and that places it back at prices seen in February. It still has room to rise until the 2021 peak at $8 – and the $15.69 52-week high.

On the other hand, Tuesday's premarket trading information is pointing to a drop of over 6% to $5.27. A correction of 6% after 60% seems modest, and a deeper sell-off cannot be ruled out. On the other hand, receiving approval from the FDA is game-changing news for the company. 

At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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