Losses more than doubled at Chembio Diagnostics Inc. in Hauppauge after its coronavirus antibody test was pulled from the market by U.S. regulators in mid-June for producing inaccurate results in some cases.
The company reported a net loss of $7.8 million for the April-June period compared with a loss of $3.2 million a year earlier.
Executives blamed the increase in red ink on a decision by the Food and Drug Administration to revoke the Emergency Use Authorization, or EUA, granted to Chembio in April to sell its rapid test for coronavirus antibodies domestically. On June 16, FDA’s chief scientist said the agency had concerns about “the risks to public health from false test results.”
Chembio executives said in a statement on Thursday, “Financial results for the second quarter of 2020 reflected the impact of the product recall in the United States and the potential response by other regulators following the FDA’s revocation of the EUA" for the firm's antibody test.
Revenue in the April-June period totaled $5.1 million, a drop of 48% from a year earlier. The decline was attributed to product sales falling 57%, year over year, to $3.8 million in the period.
Still, CEO Richard Eberly said Chembio hopes to regain FDA approval for the coronavirus antibody test and an antigen test that determines if a patient has the virus by detecting fragments of proteins found on or within the virus.
“Despite challenging circumstances in the quarter, we are optimistic that our scientific expertise and platform flexibility will allow us to develop additional high quality, easy to use point-of-care COVID-19 tests that will contribute to the decentralization of testing,” he said. “Central laboratories are currently facing extreme testing volumes that are creating delays in returning results to patients and our technology can contribute to improving the current situation.”
The earnings announcement came after the stock market closed on Thursday. In after-hours trading, Chembio shares were down 28 cents, or 5%, to $5.16. They recovered on Friday, closing at $5.49 on the NASDAQ stock market.