NEW YORK (360Dx) – Chembio Diagnostics announced after the close of the market on Monday a sharp rise in its preliminary third quarter revenues, a planned acquisition of OpTricon, and that it has commenced an underwritten public offering of $25 million of its common stock.
The Medford, New York-based point-of-care diagnostic firm said that revenues for the third quarter are expected to be in the range of $9.2 million and $9.4 million, which would represent year-over-year growth of 21 to almost 24 percent from $7.6 million in revenues in Q3 2017.
Chembio CEO John Sperzel said that in a statement that the implementation of the firm's automated manufacturing line is almost complete, and it expects production of its DPP tests on the new line during the fourth quarter. "We believe manufacturing automation is an essential element of our growth strategy as we expand our commercial reach and create additional market opportunities through new product development and technology developments," he said.
Chembio also said it has signed a definitive agreement to acquire OpTricon, a privately held German developer and manufacturer of handheld analyzers for rapid diagnostic tests, for $5.5 million in cash. The acquisition is expected to close on Oct. 31, 2018.
The companies have been collaborating since 2015 to develop the DPP Micro Reader, a handheld, battery operated analyzer that uses an image sensor to quantitatively interpret diagnostic results when combined with Chembio's proprietary DPP tests. Upon completion of the transaction, OpTricon will become Chembio's center of excellence for optical technology and be its European headquarters.
OpTricon will continue to develop and manufacture handheld analyzers for OEM customers that do not compete with Chembio.
Lastly the firm said that net proceeds from the $25 million public offering will be used for general corporate purposes; to fund the proposed acquisition of OpTricon; and to support its business growth strategy, including increasing the size of its global sales force, broadening US manufacturing automation, expanding and improving its facilities, and advancing its product development efforts.
Chembio said that it intends to grant the underwriters of the offering a 30-day option to purchase up to an additional 15 percent of the number of shares sold in the offering. Canaccord Genuity and BTIG are joint book-running managers for the offering, and Craig-Hallum Capital Group is the lead manager.