Summary
Cepheid reported a 3Q 09 revenue drop of 7% compared to 3Q 08. While system sales and other revues dropped, clinical reagent sales posted strong results of $24.1MM, a 40% growth from the same period a year ago and 15% over prior quarter.
Analysis
Cepheid reported lowered 3Q revenues of 7%. Given the lower system sales, biothreat and other revenues, the company is showing strong growth in its clinical diagnostic reagent business. Strong reagent revenues posted a 40% increase over 3Q 08 and 15% over the prior quarter. These results are due to the greater number of system and module placements and a growing test menu. Although the company reported lower revenue sales, the company beat analyst estimates and is forecasting full year sales between $165 and $169MM.
Cepheid has 7 approved tests for sale in the US and 11 outside the US. The company recently announced plans for an FDA Emergency Use Authorization filing. Molecular tests have been proven to be more accurate than rapid lateral flow assays. The increased sensitivity and specificity should provide Cepheid with important marketing and competitive advantages. Cepheid intends to file for FDA clearance through the established FDA approval process following the FDA EUA. In addition, the company is working on several other infectious disease molecular tests in high growth market segments.
Hospital Acquired Infections (HAIs) continue to be a focus of various agencies and national groups to improve the quality of patient care and reduce costs. Recently competitors such as BD and Gen-Probe have made recent acquisitions in an attempt to strengthen their competitive position.
For more information on Cepheid, the high growth molecular infectious disease test market segments and players mentioned above, please contact your GLG representative and schedule an individual consult today.
