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FDA Nod for Cepheid's Infinity-80 - Analyst Blog

Posted
5/25/2012 10:44:00 AM
By: Zacks.com
Referenced Stocks:CPHD;GHDX;MYGN

Recently, Cepheid ( CPHD ) has received clearance from the US Food and Drug Administration (FDA) for its high-throughput automated molecular system GeneXpert Infinity-80. GeneXpert Infinity-80 is a latest addition in the GeneXpert System family of Cepheid and works on the GeneXpert module technology. The system was initially cleared in combination with the company's Xpert Flu test and is scheduled to hit the market on July 1, 2012.

Similar to Cepheid's current Infinity-48 system, this new system is claimed to generate over two thousand automated results a day. In addition, the Infinity-80 is easy to use and requires less time compared to the alternative solutions available in the market. The company structured several modules of this mechanism to adopt any workflow requirement.

Cepheid is currently focusing on those applications where rapid molecular testing is necessary, such as identifying infectious disease and cancer in the clinical molecular diagnostic market; food, agricultural and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market.

The company possesses a broad portfolio of tests that runs on its GeneXpert system. It consists of SA Nasal Complete, MRSA Surveillance, MRSA/SA Skin and Soft Tissue, MRSA/SA Blood Culture, Clostridium difficile (C. diff) and Van A for VRE among others. In July 2011, the company updated the entire GeneXpert System family, including a new two-module GeneXpert, and introduced the GeneXpert Infinity-80.

We believe that Cepheid is well positioned to improve its top line based on an attractive test menu. We are impressed to note that Cepheid's existing customers are increasing their use of the GeneXpert test menu. While 70% of their US customers are using at least two Xpert tests (up from 60% of a smaller US base in the middle of 2010), 40% are using at least three tests (up from 30% in early 2010).

The company is also working on launching tests in the areas of women's health, virology and oncology and genetics. This is significant as the competitive landscape becomes tough with the presence of players such as Myriad Genetics ( MYGN ) and Genomic Health ( GHDX ). However, Cepheid continues to remain cautious about the general capital spending environment, especially in Europe.

We have a neutral recommendation for Cepheid. The stock retains a Zacks #3 Rank (Hold) in the short term.


 
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