Medical diagnostics maker OraSure Technologies Inc. (NASDAQ: OSUR) said Tuesday night that it has been awarded a $16.6 million contract to proceed with work on the company’s rapid tests for the Zika virus. The initial commitment under the contract totals $7 million, with options for up to $9.6 million in additional funds to pay for enhancements and clinical and regulatory activities.
The company’s CEO, Douglas Michels, said:
We believe the availability of an accurate rapid Zika antibody test will be a valuable tool to address current and potential future outbreaks. We are grateful to [Biomedical Advanced Research and Development Authority] for making this funding available as it will enable us to complete clinical and other activities required to obtain regulatory approvals for this product.
Earlier this year, OraSure announced that it had begun a development program for rapid Zika assays on the OraQuick platform and that it was actively pursuing external funding to advance this program. The rapid Zika tests utilize the company’s OraQuick technology platform, the same technology used in the OraSure’s rapid HIV, HCV and Ebola test kits.
The latest data from the U.S. Centers for Disease Control and Prevention (CDC) show that the Zika virus is actively being transmitted in 57 countries, including the United States. As of August 22, there have been 2,260 confirmed U.S. cases of the virus, but just 14 actively transmitted cases, all of which occurred in two areas of Miami, Florida. Nearly 7,900 confirmed cases have been reported in Puerto Rico.
The Zika virus causes microcephaly, a birth defect that causes the baby’s head to be smaller than expected compared with other babies of the same sex and age. According to the CDC, Zika can also cause other problems among fetuses and infants infected with Zika virus before birth, such as defects of the eye, hearing deficits and impaired growth. There also have been increased reports of Guillain-Barré syndrome, an uncommon sickness of the nervous system, in areas affected by Zika.
OraSure stock was up more than 11% in the first half-hour of Wednesday trading, at $7.79 in a 52-week range of $4.39 to $7.99. More than double the average daily volume of around 800,000 shares had already changed hands. The stock’s 12-month price target is $8.10.