Bruker Corporation BRKR, a leading manufacturer of scientific instruments for molecular research, recently announced that it has become the key corporate partner of The International Phenome Centre Network (IPCN). The company has collaborated with IPCN for NMR technologies, methods and the NMR standard operating procedures (SOPs) within its Biospin preclinical imaging, which are vital for clinical metabolic research and validation.
The IPCN, founded by Imperial College London and numerous international partners in Australia, Canada, China, Japan, Singapore, Taiwan, U.S. and U.K., was recently launched at the 2016 World Innovation Summit for Health (WISH) conference in Doha, Qatar. This global network is a critical link between leading research centers across the world and will support research on some of today's pressing global health issues.
For the last six months, Bruker has underperformed the Zacks categorized Scientific Instruments market. Currently, the stock is down 14.4%, wider than the loss of 1.6% for the broader industry of scientific instruments, as per the last six months’ price return performance. Adding to the woes is the company’s mixed third-quarter results. While Bruker’s quarterly earnings were better than estimated, revenues declined on a year-over-year basis. Slashed revenue guidance also adds to the concerns.
On a brighter note, Bruker’s BioSpin group, optics and semiconductor metrology businesses performed comparatively better. Margin recovery has also been observed at Bruker Nano-surfaces business. We expect these positive aspects as well as the latest corporate partnership deal with IPCN to play a vital role in the company’s recovery going ahead. This can be supported by Bruker’s favorable estimate revision trend with seven upward revisions and no downward movement for the full year over the last couple of months. The current year estimates have also risen from $1.00 per share to $1.10 over the same time frame.
Coming to partnership details, IPCN aims to expand global research capabilities in the field of phenomics. Through comprehensive analysis of biological fluids or tissue samples, phenomics examines how microbiomes, lifestyles and the environment interact with genes. Phenomic analysis of metabolites is mainly driven by nuclear magnetic resonance (NMR) and liquid chromatography mass spectrometry analysis. The IPCN depends on the Bruker IVDr by NMR system, a biofluid metabolic 600 MHz NMR screening platform with well-documented and tested SOPs, for clinical and translational research.
Both the Biospin Division of Bruker and IPCN are optimistic about their strategic alliance. Since NMR spectroscopy is considered a central pillar of molecular phenomics and systems metabolism, Bruker’s IVDr NMR platform is expected to help researchers combat some of the most challenging global diseases and emergent disease threats.
As per a MarketsandMarkets report, the global preclinical imaging market is expected to reach a worth of $910.4 million by 2021, growing at a CAGR of 6.2% during 2016 to 2021. Meanwhile, Bruker’s Biospin division is taking advantage of growth in the molecular research market. In the recently concluded quarter, the Biospin preclinical imaging business saw a rebound, thanks to steady demand for NMR applied market products. We are hopeful that the company’s association with IPCN will enhance the segment’s performance in the forthcoming quarters as well.
Zacks Rank & Other Key Picks
Bruker currently carries a Zacks Rank #2 (Buy). Other favorably ranked medical stocks are NxStage Medical Inc. NXTM, Baxter International Inc. BAX and Bovie Medical Corporation BVX. NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here
NxStage Medical surged 22.5% over the last one year compared to the S&P 500’s 4.7% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.
Baxter International rallied 17.2% over one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 121.2% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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