Zacks_Analysts' Blog : Canada OKs Meridian's Illumigene - Analyst Blog

Diagnostic test kit maker Meridian Bioscience (VIVO) secured the Canadian regulatory clearance for its molecular test dubbed illumigene C. difficile. The approval enables the Cincinnati-based company to offer a comprehensive range of C. difficile tests to its clinical laboratory customers in the Canadian market.

 

C. difficile is a highly drug-resistant bacterium, which exists in the environment in spore (or inactive) form and produces a toxin that causes diarrhea and more serious intestinal conditions such as colitis. C. difficile spores are frequently found in hospitals, nursing homes and extended care facilities. Although spores cannot cause infection directly, they transform into the active (or infectious) form when ingested.

 

The prevalence of C. difficile has grown at a brisk rate over the past few years. Studies reveal that more than 7,000 patients in the hospital setting are being affected by C. difficile each day with an estimated associated healthcare cost ranging between $18 million and $52 million per day.

 

Meridian received approval of the U.S. Food and Drug Administration (FDA) to market illumigene, its first molecular test, in July 2010. Besides the U.S., the test has also been launched in Australia, Taiwan and most European markets.

 

Illumigene offers real-time detection of pathogenic C. difficile DNA region (toxin producing region) in a sample and delivers highly accurate results within an hour. The test leverages an amplification technology, which makes it a simple to use and more flexible and cost-effective molecular test for the detection of C. difficile.

 

Meridian specializes in developing diagnostic test kits for multiple serious and infectious diseases. The company acquired London-based molecular biology reagents maker Bioline for about $23.3 in July 2010. Meridian expects the acquisition to be accretive to earnings and cash flows in fiscal 2011 (ending Sep 30, 2011) and spark growth through an expanded product range and geographic expansion.

The company recently released its outlook for fiscal 2011, expecting a rebound from a beleaguered fiscal 2010 as it was hit by a dreary influenza season, stiff competition in its C. difficile diagnostic business and a soft economy.

 

Meridian hopes sales in fiscal 2011 will be boosted by illumigene and its diagnostic test kits for detecting bacteria like C. difficile and H. pylori. The new molecular test platform, which represents the company’s response to growing competition, is expected to be its principal growth engine for the coming years.