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BioMérieux Reports 4 Percent Organic Growth Over Nine Months; Discloses Biofire Ebola Work with DoD

NEW YORK (GenomeWeb) — BioMérieux yesterday reported approximately 4 percent organic revenue growth for the first nine months of 2014, driven by organic growth in all of its clinical application areas but particularly in molecular biology and immunoassays.

At constant exchange rates and including the contribution from BioFire Diagnostics, which BioMérieux acquired in January, revenue growth was 7 percent for the first nine months, the company said.

In addition, the company disclosed that, at the behest of the US Department of Defense, BioFire's defense subsidiary recently submitted a military-use FilmArray Ebola assay for Emergency Use Authorization from the US Food and Drug Administration, and is working with the FDA to prepare a commercial version of the test.

For the nine months ended Sept. 30, the Marcy L'Etoile, France-based clinical diagnostics firm, which trades on the NYSE Euronext Paris market, reported net sales of €1.19 billion ($1.5 billion) compared to €1.14 billion in the same period of 2013, an increase of just over 4 percent.

However, the company said that exchange rate fluctuations resulted in a negative currency effect of €37 million, and that excluding this effect organic growth came in at 3.5 percent for the first nine months. In addition, consolidated sales included €45 million in sales from BioFire, driving more than 7 percent growth at constant exchange rates.

Over the eight and a half months from Jan. 16 to Sept. 30, BioFire's €45 million in sales — €38 million from its core clinical diagnostics business and €7 million from its BioFire Defense subsidiary — represented 74 percent organic growth compared to the same period in 2013 before the acquisition.

In the third quarter, BioMérieux tallied €412 million in sales, reflecting year-over-year organic growth of 2 percent. Excluding €6 million in proceeds from R&D collaborations recognized as revenue for the first time in Q3 2013, organic growth for the quarter would have been nearly 4 percent, lifted by a strong September, the company said.

BioMérieux breaks its earnings out into clinical applications, which include microbiology, immunoassays, molecular biology, and other; and industrial applications. In the first nine months of 2014, the company reported €948 million in clinical applications sales, a more than 5 percent increase over €900 million in the year-ago period, or just above 4 percent at constant exchange rates (CER). Industrial applications sales, meantime, totaled €240 million, a 1 percent uptick at CER.

The company's clinical molecular biology offerings include BioFire's products, as well as instrumentation such as the easyMAG sample purification platform, easySTREAM liquid handling system for PCR assay set-up, Thermo Fisher Scientific Life Technologies real-time PCR instruments, and Argene real-time PCR assays for immunocompromised patients and respiratory and meningo-encephalitis infections.

In the first nine months of the year, this segment reported €96 million in revenues compared to €55 million in the same period in 2013, an increase of 74 percent including the BioFire contribution. Organically, segment revenues grew 7 percent due primarily to growth in the Argene product line, BioMérieux said.

Reporting on the ongoing integration of BioFire, BioMérieux said that North America accounted for €44 million of the division's €45 million in nine-month sales, as the worldwide marketing organization is "still in the start-up phase."

The company said that in the third quarter the syndromic approach of the FilmArray product — which uses real-time PCR and melt curve analysis to run broad infectious disease panels — "proved to be a highly effective aid in the fight against the enterovirus D68 outbreak." Furthermore, in July the company initiated a clinical study relating to the use of FilmArray to diagnose meningitis and encephalitis in various US hospital laboratories. BioMérieux intends to file for FDA clearance in 2015 for this panel, which would be its fourth.

In the BioFire Defense subsidiary, the company noted that a previously disclosed legal protest action by a competing company regarding a $240 million award provided by the Next Generation Diagnostic System Technology Development program of the DoD was ongoing at the end of September, halting work on this project.

However, in response to the Ebola outbreak in West Africa, the DoD recently placed new delivery orders for FilmArray instruments and assay pouches, and ordered development work required to obtain FDA EUA for a military-use Ebola test. BioMérieux submitted this test to the FDA for EUA clearance on Oct. 18 and is currently preparing a commercial version that can be used as a clinical diagnostic in hospital laboratories.

In other company segments, BioMérieux's clinical microbiology sales for the first nine months shrunk about 1 percent to €564 million from €570 million, but rose 2 percent at CER, driven in particular by strong performance in the automated ID/AST product line, culture media, and full microbiology lab automation solutions.

This segment also includes the company's Vitek MALDI-TOF mass spectrometry system for the identification of bacteria and yeast, which received 510(k) de novo clearance from the FDA last year. BioMérieux did not disclose sales contributions for Vitek, but said that on Oct. 13 it received a warning letter from the FDA relating to an inspection in July of the company's Saint Louis, Mo., site dedicated to the production of Vitek cards and certain microbiology instruments.

The warning letter pertains to nine deviations from the Quality Systems Regulations for medical devices observed by FDA during its July inspection, BioMérieux said. The agency has requested that BioMérieux take corrective measures, and at this point the company does not expect any product supply issues.

In other segments, clinical immunoassays sales increased almost 5 percent to €276 million from €264 million, or 8 percent at CER, while other clinical product sales were essentially flat at €11 million, but grew 6 percent at CER.

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