NEW YORK (GenomeWeb) – Meridian Bioscience today reported an 11 percent year-over-year decrease in its fiscal second quarter revenues, which it attributed to a 16 percent drop in diagnostics segment sales.
Separately, the company announced today that it will acquire molecular diagnostics maker GenePOC for up to $120 million.
For the three months ended March 31, the Cincinnati-based company's revenues fell to $50.2 million from $56.5 million a year ago, missing analysts' consensus estimate of $51.7 million. The results were in line with preliminary earnings estimates of $50.0 million in revenues.
Revenues from the company's life science division were flat year-over-year at $16.7 million, while revenues for Meridian's diagnostics segment, fell 16 percent to $33.5 million from $39.8 million.
Within diagnostics, molecular assays revenues were down nearly 29 percent to $7.1 million from approximately $10.0 million. Immunoassay and blood chemistry assays revenues decreased 11 percent to $26.4 million from $29.8 million.
Meridian's net earnings in the quarter declined to $7.1 million, or $.17 a share, from $5.3 million, or $.12 a share. Adjusted EPS was $.19, above the consensus Wall Street estimate of $.16 per share.
The firm's research and development spending decreased 15 percent to $3.8 million from $4.5 million while SG&A costs decreased approximately 18 percent, to $14.3 million from $17.5 million.
The firm finished the quarter with cash and cash equivalents totaling $66.1 million.
The company also announced today that it will acquire Quebec City-based GenePOC, the developer of a molecular diagnostics platform called Revogene, consistent with Meridian's previously declared intentions to update its molecular offering, Alethia, previously known as Illumigene.
The Revogene platform has been cleared by the US Food and Drug Administration with three assays — for Clostridium difficile, Group B Strep, and Group A Strep. Meridian noted in a statement that those three assay types "comprise a vast majority of Meridian's current total molecular diagnostics sales," allowing the firm to "immediately offer this new platform and technology to existing customers seeking better workflow and less hands-on time than Meridian's current Alethia molecular platform can provide." In addition, GenePOC's expertise in gastrointestinal pathogens is "an excellent fit" for Meridian's customers, CEO Jack Kenny said, and GenePOC's technology is amenable to small molecular panels, as previously reported.
The a maximum potential value of the acquisition is $120 million, the company said, with $50 million to be paid at closing, and subsequent payments of up to $20 million in Meridian's fiscal 2021 based on the achievement of certain technical development milestones, and a final payment of up to $50 million in fiscal 2023 based on both the sales performance of certain molecular assays and their achievement of minimum profit margin thresholds.
Earlier in the month, the firm the company said that for full fiscal year 2019, net revenues are expected to decline 3 percent to 6 percent. Non-GAAP EPS is anticipated to be in the range of $060 and $.65.
Today, Meridian said the GenePOC addition is anticipated to add $4 million to $5 million in operating expenses in fiscal 2019, and to be dilutive to fiscal 2019 EPS of about $.10 to $.12 per share.
During early morning trading on the Nasdaq, shares of Meridian were down nearly 14 percent to $11.60.