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Meridian Bio Q3 Revenues Inch Down 1 Percent

NEW YORK (GenomeWeb) – Meridian Bioscience today reported a 1 percent decline in revenues for its fiscal third quarter. 

For the three months ended June 30, Meridian posted $50.1 million in revenues, down from $50.7 million in the year-ago period but above the consensus Wall Street estimate of $49.2 million. 

The company's life science segment saw revenues grow 8 percent to $14.2 million from $13.1 million, while the diagnostics segment saw a 4 percent decline in revenues to $35.9 million from $37.5 million. 

In a statement, Meridian Chairman and CEO John Kraeutler said that within the company's life science business, molecular components revenues were up 10 percent year over year and immunoassay components saw 7 percent growth. In diagnostics, core diagnostic revenues were down more than 3 percent year over year, he added. 

Several key product categories saw improvement, including foodborne testing, which grew 11 percent, and molecular products, excluding C. difficile, which saw 9 percent growth. H. pylori revenues grew 5 percent. 

Kraeutler said that the C. difficile business is seeing "some degree of stabilization," with revenues averaging $5 million per quarter over the past three quarters.

He added that revenues from the Magellan diagnostics unit, which is being investigated by the US Food and Drug Administration due to problems with its blood-lead testing assays and platforms, declined 9 percent year over year. 

The company said that based on observations by the FDA of Magellan's blood-lead testing issues, it anticipates the agency will issue a warning letter requiring "periodic reporting on our remediation process." Further, it believes there will be continued delays in its ability to restart venous blood sample testing on Magellan's products and obtaining 510(k) clearance for new Magellan products.

"We may also have delays in obtaining export certifications for Magellan products during the remediation period," Meridian added.

"With regard to the recent FDA issues within Magellan Diagnostics … we are committed to remediating both specifically noted quality weaknesses, as well as undertaking a complete upgrade of their quality system," Kraeutler said. "As we enter the fourth quarter and prepare for the start of Fiscal 2018, we expect that our investments in research and development will increase, as new tests and new diagnostic platforms move towards commercialization."

Net income for Q3 2017 was $240,000, or $.01 per share, compared to a net income of $8.8 million, or $.21 per share, a year ago. Adjusted EPS of $.16 for Q3 2017 missed the consensus Wall Street estimate of $.17.

For fiscal Q3, Meridian increased its R&D spending 11 percent year over year to $3.9 million from $3.5 million. Its SG&A costs rose 5 percent to $16.4 million from $15.6 million in Q3 2016. The firm also took a non-cash impairment charge of $6.6 million related to the carrying value of the Magellan business.

Meridian ended the quarter with $55.3 million in cash and cash equivalents.

The company declared a regular quarterly cash dividend of $.125 per share for the quarter.

It also reaffirmed its guidance for fiscal full-year 2017 of adjusted EPS in the range of $.64 to $.69 on expected net revenues of between $193 million and $199 million. Analysts are expecting EPS of $.68 on revenues of $197.5 million for the year.

In Thursday morning trading on the Nasdaq, Meridian's shares were fairly flat at $14.86.

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