Abbott Gets FDA Emergency Use Approval For $5 Rapid COVID-19 Test

The United States Food and Drug Administration granted emergency use authorization to a 15-minute COVID-19 test produced by Abbott Laboratories (NYSE: ABT) on Wednesday.

What Happened:The BinaxNOW COVID-19 test, priced at $5, is capable of delivering test results without laboratory instrumentation and comes with an accompanying smartphone app that patients can use to display their results at no cost, Abbott said in a statement.

The FDA granted the EUA with a caveat that negative results of the test don't rule out infection with SARS-COV-2 and the test should not be used as the sole basis for treatment.

The drugmaker said it will start shipping tens of millions of these tests in September and plans to ramp up supply to 50 million tests a month at the beginning of October.

Why It Matters: In March, Abbott launched a point-of-care ID NOW COVID-19 test,  which could reportedly provide a positive result in five minutes, that also received emergency use approval from the FDA.

Detroit became the first city to deploy the tests to scan its first responders for the deadly virus in April.

A month later, the drug regulator said the Chicago-based pharmaceutical company’s test was returning frequent false negatives. 

This week, XpresSpa Group Inc (NASDAQ: XSPA) said it had struck a deal with Abbott to deploy the ID NOW tests at major airports like JFK International and Newark to cut testing time.

Price Action: Abbott shares closed 0.7% higher at $103.19 on Wednesday and spiked nearly 11.9% in the after-hours session to $115.43.

Photo courtesy: Abbott Laboratories