Roche (RHHBY) specializes in drugs for oncology, immunology and infectious diseases.
Apart from providing therapeutic products and services for diverse medical needs, Roche also focuses on innovative diagnostic solutions for early detection and treatment of diseases.
This pharmaceutical major has a broad portfolio of diagnostic tests with more than a hundred high-quality Elecsys assays for immune testing along with a new generation of fully-automated cobas analyzers for improved medical decision making, scheduling and efficiency.
In a bid to further strengthen its Diagnostic division, Roche recently announced that it will acquire California-based privately-owned Ariosa Diagnostics, Inc.
We note that Ariosa is a molecular diagnostics testing service provider. The company provides highly targeted and accurate non-invasive prenatal testing (NIPT) service using cell-free DNA (cfDNA) technology.
This acquisition will enable Roche to enter the NIPT and cell-free DNA testing services markets.
Ariosa’s proprietary prenatal test, Harmony, is a blood test that is performed as early as 10 weeks into pregnancy.
The test will enable physicians to evaluate fetal cfDNA found in maternal blood, thereby assessing the risk of Down syndrome and other genetic abnormalities. In particular, the test is designed to assess the risk of trisomies 13, 18 and 21, which indicate extra chromosome in the fetus that may lead to severe genetic conditions.
Roche expects to close the transaction later in the month.
The Diagnostics division generated sales of CHF 7.8 billion in the first nine months of 2014, up 6% from a year ago. We are impressed by Roche’s efforts to strengthen its Diagnostic division which will further boost sales.
Roche currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Allergan (AGN), AbbVie (ABBV) and Valeant Pharmaceutcials (VRX). While Allergan and Valeant Pharmaceuticals hold a Zacks Rank #1 (Strong Buy), AbbVie carries a Zacks Rank #2 (Buy).
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