Co‑Diagnostics has engaged Maxim Group LLC as its exclusive financial advisor to evaluate strategic alternatives for its 50‑50 joint venture, CoSara Diagnostics Pvt. Ltd. The engagement signals the company’s intent to consider options such as a merger with a special purpose acquisition company (SPAC) or other transaction that could unlock value for shareholders.
CoSara was established in 2017 and focuses on manufacturing and selling molecular diagnostics in India, including a license to produce RT‑PCR COVID‑19 test kits. Co‑Diagnostics has faced declining revenue, reporting $0.2 million in Q2 2025 versus $2.7 million in Q2 2024, largely due to the timing of grant revenue recognition. The joint venture’s performance has been a drag on the parent’s financials, prompting the search for a more profitable exit strategy.
Management cited the need to focus resources on the Co‑Dx PCR platform and to generate capital to support its development. CEO Dwight Egan said, “We are pleased to be working with Maxim as we seek to unlock value for CoSara, and for our shareholders, and to help CoSara fully realize its founding vision.” The move reflects a strategy to shift from legacy lab‑based PCR tests to a scalable platform that can be commercialized more rapidly.
The engagement will allow Maxim to assess CoSara’s market position, valuation benchmarks, and potential exit strategies. While no specific timeline has been disclosed, the company has previously raised capital through a $7 million direct offering and an equity distribution agreement with Maxim for up to $10 million. Investors have watched the joint venture’s performance, and the company’s stock had fallen 23% in the week before the announcement, largely due to the Q2 2025 earnings report that highlighted revenue decline and increased net loss.
A SPAC merger or similar transaction could bring additional capital, broaden geographic reach, and enhance competitive positioning against larger diagnostics players. The strategic alternatives are expected to provide a more attractive exit route for CoSara than organic growth alone, potentially accelerating Co‑Diagnostics’ pivot to the Co‑Dx platform and improving long‑term profitability.
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