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Piper Jaffray Upgrades BioMérieux on Plans to Buy BioFire

NEW YORK (GenomeWeb News) – Piper Jaffray today upgraded the stock of BioMérieux, following its announcement two days ago that it will acquire BioFire Diagnostics.

The investment bank upgraded the French in vitro diagnostic firm to Overweight from Neutral, and increased the price target on its stock to €86 ($113.20) from €71.

BioMérieux, whose shares trade on the NYSE Euronext Paris market, is buying BioFire for $450 million plus the Salt Lake City-based firm's net financial debt.

In a research note, analyst William Quirk said that BioMérieux management plans to keep the existing BioFire team in place and to treat it essentially as a subsidiary.

"While likely coming at the expense of near-term cost control, given BioFire's rapid growth rate, we believe this is the appropriate move, given the strong entrepreneurial spirit at the company," Quirk said.

BioMérieux, he added, intends to incorporate BioFire's product line into its existing distribution channels, a move that will "dramatically" expand its offerings outside the US, where most of BioMérieux's revenues are based, while also driving new sales leads in the US. BioMérieux sells directly in 41 countries, he noted.

Quirk also took note of the US Food and Drug Administration's recent clearance of the company's Vitek MS clinical microbiology mass spectrometry system.

"With the recent approval of the mass spec instrument, the release of the Vidas 3 [immunoassay platform], and the ongoing upgrade of the microbiology portfolio combined with BioFire, we believe BioMérieux is poised for sustained revenue acceleration and consistent EPS upside," Quirk said.