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Luminex, Accelerate Diagnostics Downgraded by JP Morgan to Underweight

NEW YORK – JP Morgan said today that it has downgraded the stock of both Luminex and Accelerate Diagnostics to Underweight from Neutral.

The investment bank adjusted its December 2020 price target for Luminex's stock to $21 from $23.00, and kept its December 2020 price target for Accelerate Diagnostics' stock at $16.00.

JP Morgan analyst Tycho Peterson said in a research note today that Luminex's "execution on new product launches remains a show-me story in light of intensifying competition, especially in the MDx market." He said that the diagnostic company's year-to-date financial results have been generally in line with expectations but its margins have been pressured by the MilliporeSigma flow cytometry business that it acquired last year.

Nonetheless, Luminex could see a step up in organic growth next year against an easy comparison in the previous year and on the back of new product launches, including its Sensiplex instrument, which is an update of its current xMAP bead-based multiplexing system for research markets, and Verigene II, its next-generation MDx instrument.

In a separate note today about Accelerate Diagnostics' downgrade, Peterson said that following the release of "disappointing results from the highly-anticipated" Mayo Clinic/University of California Los Angeles study — comparing the Accelerate Pheno instrument to the standard of care — the diagnostic company's "full-year system placement goal is looking increasingly ambitious and, in our view, puts significant burden and risk on the near- to intermediate-term outlook."

"[The] Mayo/UCLA study failed to meet key secondary endpoints, which are more important than the primary endpoint, in our view," Peterson said. 

In a research note last week, William Blair analyst Brian Weinstein took a differing view, saying that after seeing the abstract for the Mayo/UCLA clinical impact study he believed "the trial was clearly positive as the primary endpoint was hit, thus showing an important benefit to patients when the Pheno system was used and should help further institutions' confidence in increasing investments in antibiotic stewardship programs."

In morning trading on the Nasdaq, Luminex shares were down more than 4 percent at $20.75, while Accelerate Diagnostics shares were down almost 6 percent at $19.40.