OraSure Gets Zika Contract, Canaccord Raises Price Target
On Tuesday after the market close, OraSure Technologies (NASDAQ: OSUR) was awarded a six-year contract with BARDA. The contract amounted up to $16.6 million in order to advance the company's accelerating Zika tests.
Canaccord Genuity's Mark Massaro applauded OraSure's new Zika contract and raised the company's price target from $7.00 to $10.00 while maintaining its Buy rating.
According to Massaro, the contract validated OraSure's "strong reputations and capabilities in rapid POC diagnostics and deep relationships with gov't and world health organizations."
The contract was initially for $7 million with up to $9.6 million in bonus funding from the U.S. Department of Health and Human Services. The analyst noted the size of the award could be 60 percent greater than OraSure Technologies' $10.4 million dollar prior Ebolo Funding as long as options are met.
"We expect OSUR will initially target FDA EUA and may progress to an FDA 510(k) and/or a CLIA-waiver," stated Massaro.
Thriving HCV Buisness
In addition to its Zika contract, Orasure has a strong $18 million contract with an unnamed foreign government for its rapid HCV test, the largest production contract in its history. The analyst suspects the contract to be either with China or India, and the company is expected to provide further details soon, probably in September or October according to the analyst.
The contract supplements Orasure's strong performance in the HCV market.
"This development follows strong +37% Y/Y growth in HCV product revenue, led by +121% Y/Y Growth inOUS HCV revs driven by expansion into Asia and higher sales to a humanitarian org," stated the analyst.
At time of writing, OraSure Technologies traded at $7.80, up 11.43 percent Wednesday.
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