SALT
LAKE CITY, March 6, 2025 /PRNewswire/
-- Co-Diagnostics, Inc. (Nasdaq: CODX) (the
"Company" or "Co-Dx"), a molecular diagnostics company with a
unique, patented platform for the development of molecular
diagnostic tests, today announced that on March 4, 2025, the Securities & Governance
Litigation Team at BakerHostetler, the legal firm retained to
represent the Company, won complete dismissal on summary judgment
of a Section 10(b) securities class action that had been pending
against the Company in the United
States District Court for the District of Utah. See Gelt Trading, Ltd. v.
Co-Diagnostics, Inc. et al., Case No. 2:20-cv-00368-JNP-DBP (D.
Utah).
On June 15, 2020, Plaintiff Gelt
Trading, Ltd. filed a securities class action against
Co-Diagnostics, Inc. and certain of the Company's current and
former directors and officers alleging violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934.
At issue was the Company's May 1,
2020, press release, which disclosed, among other things,
that the Company's Logix Smart® COVID-19 test demonstrated "100%
sensitivity and 100% specificity"—well-defined scientific
metrics—across independent evaluations. Plaintiff
alleged that the May 1
press release was false and/or misleading because it conveyed to
investors that the Logix Smart test was "100% accurate" (i.e.,
perfect), allegedly causing the Company's stock price
to be artificially inflated. Plaintiff alleged that
this artificial inflation was removed, and investors suffered
losses, when the Company's stock price dropped on May 15 following three disclosures that
allegedly revealed the May
1 press release to be false ("Alleged
Corrective Disclosures").
BakerHostetler was retained to replace prior counsel after the
motion to dismiss was denied and the case was in the early phases
of discovery. On summary judgment, BakerHostetler argued that
Plaintiff could not establish any genuine issue of material fact
supporting liability as to any element of its Section 10(b)
claim—falsity, scienter, reliance, loss causation, or damages.
BakerHostetler also argued that Plaintiff's experts'
testimony—which related to clinical testing and loss
causation—should be excluded on summary judgment under
Daubert.
On March 4, 2025, after oral
argument, the Court granted Defendants' Daubert motion to
exclude the testimony of Plaintiff's loss causation expert and
granted summary judgment for Defendants, concluding that Plaintiff
could not demonstrate loss causation. The Court held that none of
the three Alleged Corrective Disclosures actually
"corrected" the May 1 press release,
either because they did not discuss the Company's Logix Smart test,
or because the allegedly contradictory information was
long known to the market and already baked into the Company's stock
price. Accordingly, Plaintiff could not establish that the
May 1 press release was the cause of
Plaintiff's or the class's losses. Having reached this conclusion,
the Court declined to address the other summary judgment arguments
or Daubert motions.
The Company regards this dismissal as a tremendous victory and
is optimistic about its chances of prevailing in any appeal
Plaintiff might file. The Company looks forward to putting the
matter behind it, as it moves ahead with its mission of increasing
the availability of high-quality molecular diagnostics on a global
scale.
About Co-Diagnostics, Inc.:
Co-Diagnostics, Inc., a
Utah corporation, is a molecular
diagnostics company that develops, manufactures and markets
state-of-the-art diagnostics technologies. The Company's
technologies are utilized for tests that are designed using the
detection and/or analysis of nucleic acid molecules (DNA or RNA).
The Company also uses its proprietary technology to design specific
tests for its Co-Dx PCR at-home and point-of-care platform and to
identify genetic markers for use in applications other than
infectious disease.
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SOURCE Co-Diagnostics
