(Bloomberg) -- The U.S. emergency authorization for Abbott Laboratories' rapid Covid-19 test sent competitors spiraling, wiping out at least $22 billion in market value across more than a dozen companies.
Fears that Abbott will dominate the nascent market eroded more than a third of Quidel Corp.'s value. Hologic Inc. and Quest Diagnostics Inc. sank as much as 12%, while other diagnostic companies like Becton Dickinson and Co., PerkinElmer Inc., Bio-Rad Laboratories Inc., and Thermo Fisher Scientific Inc. fell at least 5%.
Evercore ISI analyst Vijay Kumar wrote that demand for Abbott's new antigen test “could be ENORMOUS” but he doesn't expect supply to keep up, which should help other test makers.
William Blair analyst Brian Weinstein called the news a “massive announcement that should be meaningful to Abbott's financial outlook.” At the same time, the “desperate need for testing” across the country means no one single test is going to be in place everywhere. He expects any incremental pricing pressure from Abbott's $5 test will be offset by stronger-than-expected demand.
“Abbott's EUA does nothing to change our enthusiasm around the opportunities for these other companies,” Weinstein wrote.
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