Diagnostic test-kit maker Meridian Bioscience Inc. (VIVO) recently announced five new kits for the ISOLATE II nucleic acid purification range. Developed by Meridian’s subsidiary Bioline, ISOLATE II RNA kits are designed for the isolation and purification of ribonucleic acid (RNA) from a wide variety of samples.
Researchers can use these kits to rapidly separate high quality nucleic acids without using toxic chemicals. Moreover, these new kits are quite superior in isolating both microRNA (miRNA) and small interfering RNA (siRNA) accurately as compared to phenol-chloroform based methods.
Bioline believes that with the help of these new kits researchers will be able to achieve “the purity and yield necessary for unbiased cDNA synthesis, high performance real-time RT-PCR and highly accurate RNA sequencing”.
Of late, Meridian has been focusing on the Bioline molecular component business to expand its market share among the diagnostic manufacturers and the agricultural industry, which generates almost 65% of its life science revenues. Historically, Bioline has been offering products for academic/research market that contributes the remaining 35% of segment revenues.
The shift in focus is paying off, as the life science segment revenues increased 15% in the first quarter of fiscal 2015. Revenues generated from newer Bioline products such as MyTaq, SensiFAST and ISOLATE, increased 18% on a year-over-year basis.
We believe that a healthy Bioline product pipeline is a key growth catalyst for Meridian’s life science segment in 2015. The new kits will help the company to further penetrate research laboratories, clinical diagnostic laboratories and biotechnology companies, which will improve its competitive position.
Moreover, recent regulatory approvals will expand the company’s product suite, which is encouraging for the company’s overall growth prospects. Meridian recently received CE Mark for its TRU STREP PNEUMO, which is a rapid, qualitative immunoassay for the detection of Streptococcus pneumoniae (S. pneumo).
Meridian also received CE mark for two new molecular diagnostic tests for Chlamydia trachomatis (CT) and Neisseria gonorrhoeae (NG), the sixth and seventh assays on the illumigene platform. M-prep, which is designed to facilitate the isolation of Chlamydia and Gonorrhoeae from clinical samples, also received CE mark approval.
We believe that the introduction of newly approved products in Europe will improve Meridian’s top line in the region. We note that revenues from the Europe, Middle-East and Africa (EMEA) region reportedly declined 4.6% year over year to $8.8 million in the first quarter of 2015, primarily owing to negative currency effects.
Apart from the negative impact of a strong dollar, we believe that dis-synergies associated with Japanese distributors will continue to hurt revenues going forward. Moreover, profitability remains an area of concern due to higher operating expenses and intensifying competition.
Zacks Rank & Stocks to Consider
Currently, Meridian Bioscience has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Abaxis ABAX, LeMaitre Vascular LMAT and Phibro Animal Health Corp PAHC. All three sport a Zacks Rank #1 (Strong Buy).
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