Cepheid’s CPHD rapid influenza and RSV assay – the Xpert Flu+RSV Xpress test – recently won the U.S. FDA 510(k) marketing approval and the Clinical Laboratory Improvement Achievements (CLIA) waiver. With the flu season at its peak in the U.S., we expect this news to expand Cepheid’s share in the molecular diagnostics market.
Notably, the Xpert Flu+RSV Xpress test is the first PCR panel test to get CLIA waiver and the first point-of-care assay as well, among a series of reference quality molecular tests, that Cepheid targets to launch over the next few years.
The FDA go-ahead will allow physicians to use this test on Cepheid’s GeneXpert Xpress System, which is a customized version of its long-known GeneXpert system, containing a single module and a tablet computer with an ATM-like interface that facilitates CLIA-waived testing options.
Of late, Cepheid has been working hard to expand in the point-of-care diagnostics market. This latest FDA 510(k) approval news comes within a week of Cepheid’s strategic tie-up with its long-time partner FIND. Through this partnership, the companies plan to jointly offer advanced point-of-care tuberculosis (TB) diagnosis at all levels of the healthcare system in low- and middle-income countries (LMICs).
Naturally, we consider the approval and CLIA waiver for the Xpert Flu+RSV Xpress test as yet another feather in Cepheid’s cap, pertaining to its expansion in the rapidly growing point-of-care segment. Impressively, this expansion strategy is expected to enhance Cepheid’s addressable market value to more than $8 billion by 2020, up almost 50% from current levels.
Per management at Cepheid, currently more than 1 billion U.S. citizens visit physicians’ chambers every year. However, most of the CLIA-waived testing sites are unable to offer similar levels of diagnostic accuracy as those provided by hospitals or reference laboratories. Given this situation, a PCR-based molecular assay exhibiting more accurate and multiplexing capabilities is the need of the hour, as it is expected to better serve the point-of-care diagnostics market.
Receipt of the FDA 510(k) marketing approval for Cepheid’s Flu+RSV Xpress test, which is based on its already proven lab-based Flu/RSV XC test, reflects a crucial step toward providing more such molecular assays in the future. Starting this month, the Flu+RSV Xpress test will be commercially available in CLIA-waived settings.
Currently, the company plans to roll out its GeneXpert Omni system – a portable point-of-care molecular diagnostic tool that facilitates potentially life-saving diagnosis for potential suspects of TB, HIV, HCV and Ebola – in the emerging markets in the first half of 2016. We believe this rollout is another important move on Cepheid’s part to enrich itself in the point-of-care molecular diagnostics market. The launch, once successful, should materially add value to Cepheid’s 2016 revenues.
With the point-of-care diagnostics market expected to reach $27.5 billion by 2018, we expect the aforementioned developments to allow Cepheid garner higher profits, going forward.
Currently, Cepheid carries a Zacks Rank #4 (Sell). Some better-ranked medical products stocks are Masimo Corporation MASI, Natus Medical Inc. BABY and Steris Plc STE. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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