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Meridian Bioscience Reports 13 Percent Spike in Q1 Revenues Driven by Growth in Illumigene Products

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Meridian Bioscience said today that its Illumigene molecular diagnostic products accounted for 16 percent of its fiscal first quarter revenues, which increased 13 percent over the same quarter last year.

For the first fiscal quarter ended Dec. 31, 2012, Cincinnati, Ohio-based Meridian reported net sales of $45.4 million compared to $40 million in the year-ago period. This increase was led by the company's US Diagnostics unit, which was up 21 percent on the quarter. European Diagnostics, meantime, declined by 4 percent due to "economic headwinds," Meridian said.

The company's Life Sciences revenues improved 1 percent, including 9 percent growth in its Bioline business. Meridian acquired Bioline in 2010 for $23.3 million, primarily for its molecular reagent products, including DNA polymerases, real-time PCR kits, dNTP nucleotides, nucleic acid isolation reagents, cDNA synthesis kits, cloning reagents, and buffers.

However, the company's core Life Sciences business declined 4 percent year over year, "primarily due to the timing of cyclical purchasing patterns of our largest customers," Meridian said.

Meridian had traditionally sold only immuno-based clinical diagnostic products until 2010, when it launched its first molecular amplification assay for Clostridium difficile in both Europe and the US. Since that time the company's Illumigene assays, which are based on loop-mediated isothermal amplification, have become a key growth driver at the company.

In the first quarter, Meridian's Illumigene portfolio represented 16 percent, or about $7.3 million, of total Q1 revenues, with the C. difficile category growing by 13 percent.

In December 2011, Meridian launched its second Illumigene test for group B Streptococcus detection in enriched cultures of samples from women (PCR Insider, 12/15/2013). Meridian said that the GBS test contributed sales of $700,000 in fiscal Q1.

"This product is becoming more widely adopted as laboratories and clinicians recognize that birth complications can be reduced due to its very high accuracy," CEO Jack Kraeutler said in a statement.

Meridian also received US Food and Drug Administration for a third Illumigene test, for group A Streptococcus, in September (PCR Insider, 9/20/2012).

Meridian noted that it now has nearly 975 Illumigene customers, and that it closed agreements with several large undisclosed hospital groups, which are expected to significantly contribute to the company's revenues for the remainder of fiscal 2013.

In December, Meridian said that it completed beta trials for two new Illumigene assays for detecting Chlamydia trachomatis and Neisseria gonorrhoeae in both swab and urine samples (PCR Insider, 12/13/2012), and said that it expected to begin clinical trials to support a US regulatory submission for the products later this quarter, the company's fiscal Q2.

Also in December, PCR Insider reported that the company has developed an equipment-free, rapid nucleic acid purification method for use with a variety of clinical specimens, and said that it expected the technology would eventually further simplify the workflow in front of several of its Illumigene assays (PCR Insider, 12/20/2012).

Company officials also said at the time that it has submitted to the FDA an Illumigene test for Mycoplasma pneumoniae and is preparing to begin trials for a Bordetella pertussis assay.

In other Q1 financial results, Meridian reported first quarter net earnings of $8.5 million, or $0.20 per diluted share, year-over-year increases of 29 percent and 25 percent, respectively, on a GAAP basis. On a non-GAAP basis, fiscal Q1 net earnings and EPS increased 23 percent and 18 percent, respectively. These non-GAAP measures excluded the effect of Q1 costs associated with consolidation of the company's Saco, Maine, operations into its Tennessee facility.

On Dec. 31, Meridian had $93.3 million in assets compared to liabilities of $19 million, resulting in working capital of $74.3 million. The company had $33.1 million in cash and cash equivalents on hand.

Meridian reaffirmed fiscal 2013 guidance of $190 million to $195 million in net sales and EPS of between $0.86 and $0.91. The EPS estimates include a $0.03 charge for a new Medical Device Tax effective Jan. 1; and a $0.03 charge representing the incremental cost of clinical trials for the new Illumigene C. trachomatis and N. gonorrhoeae, which are expected to be "over and above the cost of clinical trials for past Illumigene products," the company said.

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