Shares of Meridian Bioscience Inc. VIVO rallied to a new 52-week high of $20.92 on Dec 29 and closed a tad bit lower at $20.76. This represents a strong year-to-date return of approximately 26.1%, much better than the S&P 500’s return of almost 1% over the same period.
Currently, Meridian has a Zacks Rank #4 (Sell). The stock has a market cap of $865.9 million and a long-term expected earnings growth rate of 16%.
Growth Catalysts
Although unfavorable foreign exchange rate is a headwind, we believe new product launches and recent FDA approvals will drive overall results in fiscal 2016.
Meridian is focused on expanding into fast growing Next Generation Sequencing (NGS) and microRNA markets. Bioline, a subsidiary of Meridian, recently launched JetSeq DNA Library Preparation Kit, which is the first product in a new line of kits focused on NGS sample preparation.
Bioline also launched EPIK miRNA Panel Assays in September, which is primarily designed for miRNA profiling of cancer samples, biofluids and stem cells.
Meridian’s move to acquire a minority stake in Oasis Diagnostic Corp along with the right to takeover the company in the future will help the company in consolidating its position in the NGS market. Oasis is known for its expertise in collecting, storing and preserving oral samples for diagnosis of DNA and RNA.
Meanwhile, Meridian received U.S. FDA clearance for its illumigene Pertussis molecular amplification test (used for detecting whooping cough). The upgraded test reduces the effect of inhibitors in biologic samples and significantly expands Meridian’s customer base by including specimens collected by ESwab.
Meridian also received FDA clearance for two new molecular tests that can effectively detect Herpes Simplex Virus (HSV) in Jul 2015. These molecular assays identify HSV Type 1 (HSV-1) and Type 2 (HSV-2) and runs on illumigene. Earlier this year, the company launched both the assays in Europe. Upon receiving approval, the assays were launched in the U.S. as well.
Estimate Revisions
The Zacks Consensus Estimate for fiscal 2016 remained steady at 89 cents over the last 30 days. Fiscal 2016 estimates also stood at 93 cents over the same period.
Key Picks
Better-ranked stocks in the same space include INSYS Therapeutics INSY, ICU Medical ICUI and NxStage Medical NXTM, all of which sport a Zacks Rank #1 (Strong Buy).
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