AACC 2013 Update #1 Company Briefs: NSPH, NSTG, VIVO

Interesting Companies and Updates from American Association of Clinical Chemistry (AACC) Trade Show

Update #1

We spent two busy days attending this diagnostics and tools meeting and  there was a good buzz with broad global attendance of about 17,000. There was a mix of customers, large and small companies,wide coverage of life science technologies with excellent in-depth reviews of scientific, business and regulatory issues. In various updates we will provide a brief of interesting companies private and public. Here are a few public companies not currently covered by Rayno Life Science.

  1. Meridian Bioscience (VIVO $24.50).  Meridian should be on your watch list as the stock moved up on higher volume from the $20 level only 3 months ago.The Company got traction on an announcement that their MLS subsidiary  manufactured H1N1 influenza A challenge stock under cGMPs for  Immune Targeting Systems. This milestone strengthens the Meridian Life Science subsidiary currently growing at 18%. Moreover the Company beat quarterly expectations with a 12% growth in Revenues to $47.1M driven by infectious disease products and their new molecular DX platform illumigene. Revenue estimates for the year are at the $188M level with a longer term growth rate of over 10%.Price to sales would be about 5X with a PE at 27.  Meridian has been around for over 20 years and has been slowly built through acquisitions. The stock is stable but choppy over 5 years and appears to be recovering (up 21% YTD) from a few challenging quarters that drove the stock briefly under $20 in 2011 and 2012. The stock currently pays a 3% dividend highly unusual among DX small caps. VIVO is not on our DX focus list currently but is a potential growth/value stock moving forward.
  2. Nanosphere (NSPH $3.10). Nanosphere is an emerging molecular diagnostic developer and marketer  utilizing its benchtop Verigene System for DNA and RNA protein testing with a focus on pathogen identification. The Company’s growth will be dependent on the success of its gram positive blood culture system (BC-GP) for detection of bloodstream infections including antibiotic resistance markers. The Verigene platform can also perform pharmacogenetic tests such as for Warfarin metabolism with a product pipeline in development for respiratory and enteric pathogens.Financial results will be reported on August 6 and Revenues for Q1 were $2.37M. Revenue forecasts for 2013 are $13M. Retained Earnings were a negative $348M, with $33M in cash, so you have essentially a turnaround situation with a substantial investment already made in Verigene. Jeffries  initiated a buy on May 31 with a target price of $5,50.
  3. Nanostring (NSTG $8.41). Nanostring is a newly public (June 27, 2013 $10), emerging platform technology Company for molecular diagnostics using multiplexed, actionable, genomic assays.  The nCounter Analysis System is an automated, multi-application digital detection and counting system that is approved in Europe for a prognostic gene signature assay (ProsignaTM) for breast cancer . Over 100 placements have been made worldwide for translational research. The Q2 financial reporting will be AUG 6 and the Company is currently in a quiet period. FDA approval for the breast cancer assay is expected early in 2014.  The technology can also measure genomic activity on tissue biopsies utilizing very small FFPE samples with little or no performance degradation. JPMorgan initiated an Overweight on JY 22 with a target price of $14.

These companies are well positioned for growth going forward and are now on our radar screen.

 

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