IDEXX OPTI Medical Gets CE Mark for RT-PCR Coronavirus Test

IDEXX Laboratories IDXX has made notable novel coronavirus-related progress. The company’s subsidiary OPTI Medical Systems recently achieved the European CE mark for its received OPTI SARS-CoV-2 RT-PCR laboratory test kit that identifies SARS-CoV-2, the virus that causes COVID-19.

This development came on the heels of earlier validation of the test by the Institute Pasteur of France as well as Emergency Use Authorization (EUA) by the FDA in the United States.

OPTI Medical Systems specializes in the design and manufacturing of point-of-care and laboratory diagnostics for human medicine.

The Test at a Glance

The OPTI SARS-CoV-2 RT-PCR test kit uses real-time reverse transcription polymerase chain reaction (RT-PCR) technology. It will provide results in roughly 2–3.5 hours.

The receipt of the CE mark implies that this OPTI SARS-CoV-2 RT-PCR test complies with the European Union's In Vitro Diagnostic Directive (which applies to products that are manufactured in or designed to be sold in the European Economic Area). According to IDEXX, this test benefits from an optimized workflow and can deliver greater assurance of quality and accuracy.

In addition to this test, the company was also granted EUA for its new OPTI DNA/RNA Magnetic Bead Kit for nucleic acid extraction from respiratory samples. This can be used together with the OPTI SARS-CoV-2 RT-PCR test kit to provide laboratories with a complete OPTI Medical Systems-manufactured workflow solution for COVID-19 testing.

Meanwhile, we note that, in the United States, this test has been authorized only for the detection of nucleic acid from SARS-CoV-2 and not for any other viruses or pathogens.

IDEXX’s Performance in the COVID-19 Scenario Encouraging

The company’s human medicine business and its prime-line animal health business are gaining momentum.

In the first quarter of 2020, while the economy was reeling under the coronavirus pandemic, IDEXX had started benefiting from it. Till early March, global Companion Animal Group (CAG) Diagnostics recurring revenue gains were robust. These gains resulted from improved market trends, reflected in 4% same-store growth in U.S. clinical visits. Despite adoption of social distancing policies in Europe and the United States through March, significant declines in clinical visit activity and restriction on access to vet clinics, the momentum was strong enough to lead to robust revenue growth.

Recently, the company came up with a positive outlook about the U.S. Companion Animal Market trajectory. The company noted meaningful improvement in U.S. clinical visit trends across major regions. Per IDEXX, in the week ended May 22, overall U.S. clinical visits, non-wellness visits and wellness visits surpassed the year-ago levels. This is a strong indicator that the company’s overall business will be least affected by the COVID-19 crisis in the next few months.

Share Price Performance

Over the past six months, IDEXX has been outperforming its industry with respect to share price movement. The stock has gained 25.1% compared to 3.1% rise of the industry.

Zacks Rank & Stocks to Consider

Currently, IDEXX carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are Aphria Inc. APHA, Illumina, Inc. ILMN and QIAGEN N.V. QGEN.

Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Illumina’s long-term earnings growth rate is estimated at 11%. The company presently has a Zacks Rank #2.

QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.

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