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Bio-Techne Fiscal Q1 Revenues Rise 12 Percent

NEW YORK – Bio-Techne said Tuesday that its fiscal 2020 first quarter revenues rose 12 percent year over year, driven by growth in each of its business segments.

For the three months ended Sept. 30, the firm reported revenues of $183.2 million compared to $163.0 million in Q1 2019, topping analysts' average estimate of $179.4 million. 

The firm reported $42.6 million in Q1 diagnostics and genomics segment revenues, up 16 percent year over year compared to $36.7 million. Bio-Techne said that the segment's operating margin was negatively impacted by the acquisition of Exosome Diagnostics in 2019.

Protein sciences revenues rose to $141 million, up 12 percent from $126.4 million a year earlier. The company said the segment's operating margin was negatively impacted by product mix and unfavorable foreign exchange.

Organic growth of 13 percent "for the quarter was the result of very good execution from our global team and our strong product portfolio, which remains extremely vital in research workflow for our customers," Bio-Techne President and CEO Chuck Kummeth said in a statement.

The company said it anticipates that more than 60 million Medicare beneficiaries will be covered for the ExoDx Prostate IntelliScore (EPI) test on Dec. 1, following recent receipt of a Local Coverage Decision from a Medicare Administrative Contractor.

Bio-Techne also said it has commenced construction of a GMP (Good Manufacturing Practice) manufacturing facility to support its expanding cell and gene therapy portfolio.

Within the firm's protein sciences business, Bio-Techne recently began validating immunohistochemistry antibodies for researchers using its Advanced Cell Diagnostics (ACD)-branded in situ hybridization and gene-editing platform, and leveraging a transcriptomics approach, Kummeth said on a conference call to discuss the firm's financial results.

Within its diagnostics and genomics segment, the firm's OEM diagnostics tools business returned to double-digit growth in nearly all of its major product categories, including clinical controls and specialized reagents, he said, adding that going forward, Bio-Techne anticipates that the diagnostics and genomics division will grow at a rate of at least mid-single digits for fiscal 2020, and achieve "possibly higher growth in future years as new diagnostic instrument platforms and assays [from] our OEM customers come online."

Within the diagnostics and genomics segment, the firm's ACD RNA Scope business continued its growth recovery "with sales increasing over 20 percent in Q1," Kummeth said. "During the quarter, we released the RNA Scope high-plex assay, which enables researchers to gain greater insights into cellular mechanisms and functions, by combining a simple workflow with the capability of simultaneously detecting up to 12 RNA targets."

Reimbursement coverage for the EPI liquid biopsy urine test — which is indicated for men being considered for an initial prostate biopsy — positions the firm to serve "what has been until now a very unmet need," Kummeth said. "During the quarter, we also made progress with private payor coverage of EPI. We currently have nearly 30 commercial plans contracted for EPI as well as 38 states covered under Medicaid. We expect the recent Medicare coverage decision to drive increased awareness of EPI within the private payor community."

Kummeth noted that test volume for EPI in the most recent quarter were 34 percent higher than the same period last year.

Following receipt of Breakthrough Device Designation for the test from the US Food and Drug Administration in June, Bio-Techne provided a first submission as part of its process to achieve marketing clearance, and the agency came back with "a long laundry list of questions as expected," Kummeth said. Still, with the FDA Breakthrough status, the firm is getting the help it needs with the submission process, he said.

Kummeth said that the firm has no immediate plans to offer the Exosome Dx test as a kit. "There's plenty of uncharted territory [with this product as a laboratory test] for us to not worry about that," he said. Bio-Techne is already working to advance development of the urine version of the platform for bladder diagnostic indications and kidney rejection, and it is getting ready to commence clinical trials using a blood-based version for lung and breast cancer detection, he said.

The firm's Q1 net income fell to $14.4 million, or $.37 per share, from $17.4 million, or $.45 per share, in the prior-year quarter. The firm reported adjusted EPS of $1.06 per share, beating analysts' average estimate of $1.05 per share.

The company's Q1 R&D expenses grew 9 percent to $16.1 million from $14.8 million, while its SG&A expenses rose 3 percent to $69.0 million from $67.1 million.

Bio-Techne finished the quarter with $99.9 million in cash and cash equivalents and $58.5 million in short-term investments.

The firm announced a dividend of $.32 per share for the quarter ended Sept. 30, payable Nov. 22 to shareholders of record on Nov. 8.

In afternoon trading on the Nasdaq, Bio-Techne shares were up less than 1 percent at $210.70.

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