Sona Nanotech (CSE:SONA)- CEO, David Regan
CEO, David Regan
Source: Entrevestor
  • Skittish investors are abandoning shares in Sona Nanotech (SONA) today, after its COVID-19 antigen test application was downgraded by the US FDA
  • The FDA has refused to grant Sona’s application an emergency use authorisation, which would have seen it fast tracked through the regulatory process
  • Nevertheless, the FDA ruling does not reflect the test’s performance, simply the U.S. health authority’s ruling on the urgency of its application
  • Meanwhile, the company’s application with Health Canada remains unaffected and ongoing
  • Sona Nanotech (SONA) is down 50.1 per cent and is trading at C$3.80 per share

Skittish investors are abandoning shares in Sona Nanotech (SONA) today, after its COVID-19 antigen test application was downgraded by the US FDA.

The company’s antigen test is currently being assessed by the U.S. Food and Drug Administration’s, but has been refused an emergency use authorisation, which would have seen it fast tracked through the regulatory process.

It must be noted however that the FDA ruling does not reflect the test’s performance, simply the US health authority’s ruling on the urgency of its application.

Essentially, the reclassification means Sona’s product is not a priority for the US health authorities, leaving investors worried that the company’s product might fail to live up its dizzyingly high share price.

Trading at just 12 cents per share at the beginning of the year, shares in Sona shot up to more than 15 dollars apiece by July as the pandemic pushed investors towards hyped healthtech stocks.

However, news of the deprioritization has spooked investors hoping for a windfall of test sales in the U.S., halving the company’s shares price at market open this morning.

Despite the news, Sona CEO David Regan remains hopefully and said the demand for these tests in the private sector continues to grow.

“Large companies, employing thousands of people, are telling us that they cannot source rapid antigen tests which they view as critical to their business continuity and for the safety of their employees,” he added.

While this doesn’t spell great news for the company’s hopes south of the border, Sona’s application with Health Canada remains ongoing.

Sona Nanotech (SONA) is down 50.1 per cent and is trading at C$3.80 per share at 10:57am EDT.

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