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Meridian Bioscience Fiscal Q2 Revenues Up 49 Percent

NEW YORK – Meridian Bioscience reported on Friday morning a 49 percent year-over-year increase in its fiscal second quarter revenues, as revenues from the life science segment more than doubled.

For the three months ended March 31, the Cincinnati-based company's revenues increased to $85.3 million from $57.3 million a year ago, slightly above analysts' consensus estimate of $84.5 million.

Revenues from the company's life science division more than doubled year over year to $53.3 million from $22.4 million a year ago. Revenues for Meridian's diagnostics segment declined 9 percent to $31.9 million from $34.9 million.

Within diagnostics, molecular assays revenues were down 39 percent year over year to $4.4 million from $7.2 million. Non-molecular assay revenues declined slightly to $27.6 million from $27.7 million. By disease category, gastrointestinal assays contributed the most to the diagnostics segment with $15.7 in revenues, up from $14.0 million a year ago.

Meridian CEO Jack Kenny said on a conference call to discuss the company's financial results that the blood chemistry business had fully recovered and was up 4 percent year over year. Except for respiratory products, Meridian saw other major parts of the business perform to expectations, Kenny said.

The company placed 37 Revogene PCR instruments in the second quarter, increasing the firm's installed base to 325 machines, Kenny said. However, he noted the firm saw a slowdown in Revogene orders due to a wait-and-see approach from customers regarding the voluntary withdrawal of its Revogene SARS-CoV-2 Emergency Use Authorization application.

Kenny said the firm conducted a study in March for the Revogene test that showed a better limit of detection than the initial analysis but added that the company needed to conduct further clinical validation studies before resubmitting for EUA in June.

Earlier in the quarter, the company received $5.5 million from the National Institutes of Health's Rapid Acceleration of Diagnostics initiative to expand production capacity of the Revogene test. That expansion remains on track, Kenny said.

Revenues for the life science segment included $31 million from SARS-CoV-2-related products, with $28 million in molecular products and $3 million in immunological products, the company said. Revenues from molecular reagents were $37.8 million, up more than threefold from $11.5 million a year ago, and revenues from immunological reagents were $15.6 million, a 44 percent increase from $10.8 million in Q2 2020.

Kenny said the life science business was "transformed" by the pandemic, which provided new and fortified customer relationships to fuel future growth. He said a number of customers using Meridian life science products were in the process of developing tests to submit for EUA. Meridian CFO Bryan Baldasare added that the firm's reagents work in both symptomatic and asymptomatic SARS-CoV-2 tests, which will be a benefit as the US transitions to more asymptomatic testing as vaccines roll out.

Baldasare also said that there were other SARS-CoV-2 hot spots around the world and noted that demand for reagents may see ebbs and flows based on the geographies the company is selling to.

Meanwhile, non-COVID-19-related life science segment revenues were up about 30 percent year over year.

Meridian's net earnings in the quarter increased to $26.3 million, or $.60 a share, from $9.4 million, or $.22 a share. Adjusted EPS was $.56, above the consensus Wall Street estimate of $.48 per share.

The firm's research and development spending increased 13 percent to $6.1 million from $5.3 million a year ago, while SG&A costs increased 14 percent, to $19.4 million from $17 million.

The company finished the quarter with cash and cash equivalents totaling $63.4 million. Meridian said it has $110 million of borrowing capacity under its $160 million commercial bank credit facility.

Meridian adjusted its guidance for fiscal year 2021, saying that net revenues are expected to range from $305 million to $335 million, with life science revenues between $180 million and $200 million and diagnostics revenues between $125 million and $135 million. Non-GAAP EPS is anticipated to be in the range of $1.60 to $1.80. Guidance for the life science segment hasn't changed, despite revenues being "somewhat below the company's expectations in the second quarter," Meridian said in a statement.

The $15 million reduction in net revenue guidance is the result of the Revogene withdrawal for EUA and the expected timing of resubmission, in addition to uncertainty about when the firm's partner will submit its SARS-CoV-2 rapid antigen test for EUA. In October Meridian said it would be distributing a rapid antigen test in the US for an undisclosed company. Baldasare said the firm was looking into other partners for a SARS-CoV-2 rapid antigen test with EUA due to the lack of clarity around when the other antigen test would be submitted.