Benzinga | Aug 23, 2021 05:36PM EDT

Abbott Destroyed Several COVID Test Cards, Now Faces Diminished Capacity: NYT

* When demand for rapid COVID-19 screening dropped earlier this year, Abbott Laboratories (NYSE:ABT) lowered its financial outlook for full-year 2021 and announced 400 layoffs.

* According to The New York Times investigation, Abbott told factory workers to shred millions of paper testing cards that it thought would never sell.

* But now, with the Delta variant, surging demand for fast-acting diagnostics is on the rise again, and Abbott's brand is running scarce.

* Abbott now aims to rehire hundreds of workers to ramp up its production back up to speed. However, the company told the NYT that it might take time, and test supplies will be constrained for the coming weeks.

* In the meantime, with inventory destroyed and manufacturing curtailed, some retail stores, pharmacies, and online marketplaces have been selling out of the 15-minute, at-home BinaxNow coronavirus antigen test.

* In an interview with the NYT, Abbott CEO Robert Ford said materials were destroyed because of their limited shelf life. They were not part of completed, fully packaged test kits, which also contain swabs and bottles of liquid reagents.

* However, photos obtained by reporters showed that at least two of the numbered lots of card components, enough for about 345,000 tests each, had seven months of shelf life remaining.

* Price Action: ABT shares closed lower 0.38% at $125.84 on Monday.