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Coverage Initiated on 'Emerging Colossus in Diagnostics and Life Science'

Source: Streetwise Reports

 

July 30, 2020 (Investorideas.com Newswire) Meridian Bioscience's business segments, revenue and growth as well as COVID-19's positive impact on them are reviewed in an H.C. Wainwright & Co. report.


In a July 27 research note, analyst Yi Chen reported that H.C. Wainwright & Co. initiated coverage on Meridian Bioscience Inc. (VIVO:NASDAQ) with a Buy rating and a $34 per share target price. The biotech's current share price is about $24.31.

The "fully integrated" company, as described by Chen, has two primary business segments: Life Science and Diagnostics.

Life Science, which accounted for 32% of revenue as of Sept. 30, 2019, manufactures and distributes bulk antigens, antibodies, polymerase chain reaction (PCR) reagents, nucleotides and other bioresearch reagents.

Diagnostics, comprising 68% of revenue at Sept. 30, 2019, develops and markets diagnostic platforms and test kits for elevated blood lead levels and gastrointestinal and respiratory infectious diseases.

Chen highlighted that Meridian's combination of life science and diagnostics "is poised to win during and after the pandemic." Since the start of COVID-19, revenue from its Life Science component has "surged," the analyst noted, due to the company providing, to its in vitro diagnostic customers, reagents for PCR tests and recombinant antigens for antibody tests for detecting SARS-CoV-2. At least 35 of Meridian's customers have had COVID-19 tests on the market.

Further, the Cincinnati-based company recently debuted a high-sensitivity SARS-CoV-2 nucleocapsid antibody pair to be used in developing rapid antigen assays. This product rounds out its COVID-19 testing offerings, Chen wrote.

"Given that Meridian is one of a few commercial suppliers with scale and quality, that the pandemic is escalating in the U.S. and other parts of the world and that customers cannot switch suppliers for commercialized assays easily, we believe the company should continue to experience robust growth in the Life Science segment in fiscal year (FY) 2020 and FY21," commented Chen.

Unrelated to COVID-19, Meridian is "working on a proprietary panel on its Revogene diagnostic platform, which does away with the need to RNA extraction," Chen indicated. The removal of this step could result in a faster and cheaper testing option. The company could submit a 501(k) application for the panel, which could include testing for influenza A, influenza B and respiratory syncytial virus, in spring 2021.

Chen pointed out that Meridian has proven over the past 10-plus years that its operations are both profitable and sustainable and they are expected to continue on that trajectory in the near future at least.

The company's growth has been internal and acquisition based, the latter due to management's "pragmatic and opportunistic approach" to pursuing strategic deals. Chen cited the GenePOC and Exalenz deals as examples of transactions that expanded Meridian's product portfolio.

H.C. Wainwright forecasts Meridian's revenue in FY20 to be $232.7 million and in FY21 to be $269 million, both figures in the middle of the biotech's guidance and equating to 15% growth each year.

As for the performance of each segment, the financial institution expects Life Science to experience topline growth of 74% in FY20 due to COVID-19 but Diagnostics to primarily drive overall growth long term. "The increasing interactions with Life Science customers in the near term could facilitate relationship building for long-term opportunities in the Diagnostics segment," added Chen.

Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

Disclosures from H.C. Wainwright & Co., Meridian Bioscience Inc., Company Update, July 27, 2020

Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.

I, Yi Chen, Ph.D. CFA, Raghuram Selvaraju, Ph.D. and Blair Cohen, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst's household has a financial interest in the securities of Meridian Bioscience, Inc., Applied DNA Sciences, Inc., BioNTech SE and Co-Diagnostics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).

As of June 30, 2020 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Meridian Bioscience, Inc., Applied DNA Sciences, Inc., BioNTech SE and Co-Diagnostics, Inc.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The firm or its affiliates received compensation from Co-Diagnostics, Inc. for non-investment banking services in the previous 12 months.

The Firm or its affiliates did not receive compensation from Meridian Bioscience, Inc., Applied DNA Sciences, Inc. and BioNTech SE for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

The Firm or its affiliates did receive compensation from Co-Diagnostics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Co-Diagnostics, Inc. during the past 12 months.

The Firm does not make a market in Meridian Bioscience, Inc., Applied DNA Sciences, Inc., BioNTech SE and Co-Diagnostics, Inc. as of the date of this research report.

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