Sigma Expands Autism Collaboration - Analyst Blog

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Sigma-Aldrich Corporation ( SIAL ) recently announced that Sigma Advanced Genetic Engineering (SAGE) Labs, an initiative of Sigma Life Science, has extended its partnership with Autism Speaks to develop the first rat models with modified autism associated genes to enhance discovery and translational autism research. Autism Speaks is the biggest autism science and advocacy organization in the U.S.

Extension of the existing partnership between Sigma and Autism Speaks was on the heels of some behavioral studies, which revealed that the first two publicly available gene-knockout rats display unique characteristics of autism like social deficits and repetitive behaviors. Autism Spectrum Disorder can be experimented on animals to better study its cause and treat the individuals suffering from the disorder.
    
SAGE labs and Autism Speaks are set to generate genetically modified rat models of key autism-associated genes, including CNTNAP2 and MET. CNTNAP2 and MET are knockout rat lines and are expected to be available in 2013. The expanded collaboration will ensure that new models are developed and are made available to speed up the translational research continuum.

Sigma Life Science is the biological products and services arm of Sigma-Aldrich Corporation. Sigma-Aldrich, a life-science and specialty chemical company, released its second-quarter 2012 earnings last month.

The company posted adjusted earnings of 97 cents per share in the quarter, in line with the Zacks Consensus Estimate but ahead of the year-ago earnings of 93 cents per share. Profit, as reported, marginally increased to $115 million or 94 cents per share in the quarter from $113 million or 91 cents a year ago.

Revenues came in at $664 million in the quarter, up 4% year over year but below the Zacks Consensus Estimate of $673 million. Acquisitions contributed 6% to the growth while foreign exchange translation had an unfavorable impact of 5%. The company saw growth across its Research Chemicals and Fine Chemicals ("SAFC") divisions.

Moving ahead, Sigma-Aldrich expects organic growth to be in low-to-mid single digits in 2012, down from the earlier expectation of mid single-digits. Macroeconomic uncertainties may hinder its Research Chemicals business whereas growth in Bioscience and Hitech is expected to drive SAFC sales for the remainder of the year. The acquisitions of BioReliance and Research Organics are expected to boost sales by 6%.

Sigma-Aldrich currently maintains a Zacks #4 Rank, which translates into a short-term (1 to 3 months) Sell rating. We have a long-term Neutral recommendation on the stock.


 
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