Brian Marckx, CFA
DPP FIOCRUZ Sales Forecast – Upside To Our Estimate
In a press release this morning Chembio (CEMI) provided an update to anticipated sales of the four DPP rapid tests that have been approved for sale in Brazil. These DPP tests include two oral fluid HIV tests (approved in June and September 2010), a test for canine leishmaniasis (approved in April 2011) and a single parameter treponemal test for Syphilis (approved in May 2011). A fifth DPP test, for leptospirosis, could gain regulatory approval in Brazil in the near future.
Chembio notes in this morning's press release that they expect at least $3 million in net sales from the four approved tests from FIOCRUZ (including $600k in Q2) during the remainder of 2011 (DPP FIOCRUZ sales were only $51k in Q1). As a result of DPP FIOCRUZ sales coming in significantly softer than we had anticipated in Q1 2011 (announced 5/5/11), we had trimmed our full-year estimate for these four products to about $2.3 million. This morning's revelation that DPP FIOCRUZ sales should be at least $3 million in 2011 could provide some upside to our $17.8 million 2011 total revenue estimate for Chembio.
We cover Chembio with an Outperform rating and $1.00 price target.
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