Meridian Bioscience Provides FY16 Outlook; Shares Drop

Meridian Bioscience Inc. VIVO provided its fiscal 2016 guidance in advance on Sep 9, which however, failed to cheer investors. Following the news, shares fell 5.7% ($1.07) to close the session at $17.62.

For fiscal 2016, Meridian forecasts revenue growth of 3% to 6% on a constant currency (cc) basis. Net revenues are projected in the band of $195 million to $200 million and earnings in the range of 86 cents to 90 cents.

Meanwhile, management expects fiscal 2015 revenues to be at the lower end of the previously given range of $193 million to $200 million. Unfavorable foreign currency is expected to impact revenues by $3 million. EPS is also expected to be at the low end of the guided band of 85–91 cents.

Meridian's expanding product portfolio is a key growth catalyst. In July this year, Meridian received the FDA clearance for two new molecular tests that can effectively detect the Herpes Simplex Virus (HSV). These molecular assays will identify HSV Type 1 (HSV-1) and Type 2 (HSV-2) and will run on Meridian Bioscience's molecular platform – illumigene. Earlier this year, the company launched both the assays in Europe.

HSV assays are an important addition to the wide range of molecular tests currently available for use on the illumigene platforms –. C. difficile, Chlamydia, Group A Streptococcus, Group B Streptococcus, Gonorrhea, Mycoplasma and Pertussis.

Earlier this year, Meridian won the CE Mark for molecular diagnostic testing of Chlamydia trachomatis CT and Neisseria gonorrhoeae NG. CT and NG are the most common forms of bacterial sexually transmitted diseases.

We are also encouraged by the various new product launches and a healthy Bioline product pipeline. Further, the Chinese market continues to be a source of strength for the company. However, unfavorable foreign currency translation remains a headwind.

Zacks Rank & Key Picks

Meridian currently has a Zacks Rank #3 (Hold). Some better-ranked medical stocks include ICU Medical ICUI, Orasure OSUR and NuVasive NUVA. All the three stocks sport a Zacks Rank #1 (Strong Buy).

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