Luminex Shares Fly On Flu Test
Andy Stone, 01.03.08, 4:35 PM ET
This year’s flu season is already under way, but Luminex (nasdaq: LMNX - news - people ) has just the thing to help doctors and their patients beat back the infection next year. On Wednesday the U.S. Food and Drug Administration approved the Luminex xTAG Respiratory Viral Panel, a DNA-based test that can determine within hours the specific cause of respiratory infection such as the flu, helping doctors to quickly get patients on the right treatment. The technology could replace older tests that rely on cell culture, and often take three or more days to provide results.
Shares of the Austin, Tex. company rose 79 cents, or 4.9%, to $17.02, on Thursday.
The Viral Panel allows doctors to simultaneously search for 12 viruses that cause 85% of all respiratory infections, reducing the pressure to prescribe antibiotics as a precautionary measure until bacterial infection can be ruled out. Overuse of antibiotics is thought to be a major cause of bacterial resistance.
Patrick J. Balthrop, the Luminex chief executive, said 1 million tests are run for respiratory infections each year using existing technologies, a $75 million market. Luminex’s total sales for 2006 were $53 million.
The Viral Panel is based on the xMAP molecular diagnostic platform that Luminex has been selling to drug research labs since 1999. The xMAP bioassay allows researchers to look directly at the molecules that cause disease – DNA and proteins – and observe how drugs interact with these molecules.
The market for clinical molecular diagnostics was expected to grow by 20% in 2007, to $1.7 billion, as doctors adopt the tests to rapidly diagnose disease and search for genetic disorders.
“There is a well-trod path from research to clinical lab for processing technologies,” says John L. Sullivan, analyst with Leerink Swann. “Luminex has proven its results to be reproduceable in research labs at drug companies, then moved to the clinic.”
Luminex already markets a molecular test to determine the risk that children will be born with cystic fibrosis when both parents are carriers for the disorder.
But the flu is much more common. “It shows clinicians how useful the Luminex platform is, and then Luminex can go forward and develop other tests as well,” says Sullivan.
The key feature of Luminex’s xMAP platform is its ability to check for up to up to 100 different types of molecules simultaneously, in samples that may be relatively impure. The Viral Panel uses microscopic beads that change color in the presence of DNA from any of 12 different viruses. A $70,000 Luminex analyzer detects the color change. Luminex has sold 40,000 such analyzers for use in research labs.
Existing cell culture-based diagnostics require individual tests for each molecule, while high-throughput screens from companies such as Agilent Technologies (nyse: A - news - people ) and Affymetrix (nasdaq: AFFX - news - people ) excel at scanning for thousands of different types of molecules that are needed in drug discovery efforts.
Luminex’s core business has been the manufacture and sale of bioassay consumables and devices to clinical research companies including Celera Group, Abbott Labs (nyse: ABT - news - people ) and Bayer (nyse: BAY - news - people ). These companies package Luminex’s consumables into test kits that are sold to labs.
Last March, however, the company bought Tm Bioscience of Toronto, which developed the cystic fibrosis test based on Luminex’s xMAP platform and gives Luminex a direct sales channel to clinics. Luminex now sells that test, and will sell the Viral Panel via its Luminex Molecular Diagnostics subsidiary.
