Inverness Medical Innovations (IMA ) develops advanced professional and consumer medical diagnostic products focused on cardiology, women’s health, infectious disease, oncology and drugs of abuse. The company also provides specialized health management services in the areas of wellness, disease management, oncology, and women and children’s health.The U.S. is its largest geographic market responsible for 72.1% of 2008 revenues. Europe generated 17.2% of revenues.
IMA operates four segments. Professional diagnostics, which produced 62.6% of 2008 revenues, offers products for preventive and interventional care. These products focus on the pointof-care, rapid diagnostic testing, and the self-testing markets.
They include the Triage system, which detects cardiovascular conditions; pregnancy fertility/ovulation tests; tests to detect viral hepatitis, influenza, HIV/AIDS, herpes, and other sexually transmitted diseases; BladderCheck, the only in-office test approved by the FDA to assist in the detection of bladder cancer; and a comprehensive portfolio of rapid drug tests.
Health management services produced 23.8% of revenues. This segment provides solutions designed to help patients cope with various medical conditions. These include programs to manage chronic illnesses such as asthma, coronary artery disease, diabetes, and weight management; the most extensive domestic cancer management program; a complete range of obstetrical care including risk assessment, early infant care management, and home-based obstetric programs; and employee wellness programs.
Consumer diagnostics, which generated 8.2% of revenues, is comprised of the First Check brand of overthe-counter at-home tests for detecting drug abuse, alcohol abuse, cholesterol monitoring, and colon cancer. IMA also supplies nearly all of the consumer diagnostic products sold by Swiss Precision Diagnostics (SPD), a 50/50 joint venture with Procter & Gamble. SPD is a leading supplier of home pregnancy and fertility/ovulation tests sold under the Clearblue, Fact Plus, Accu-Clear, and Persona brands.
Vitamins and nutritional supplements accounted for the remaining 5.4% of revenues. The company supplies private label products for major food and drug chains, sells in bulk to unaffiliated distributors, and sells products under its own labels.
Q2 net revenues climbed 14.8% year-over-year to $460.1 million as IMA benefited from swine flu fears, which boosted demand for influenza tests. The adjusted operating profit margin expanded 227 basis points to 21.43%. Adjusted net income available to common stockholders jumped 60.7% to $47.6 million or 57 cents per share.
Management is optimistic about its NGAL biomarker for cardio-renal disease assessment, introduced in Europe and Asia earlier this year. USAID added the Determine HIV rapid combo test to its waiver list of approved HIV rapid tests, which makes it eligible for purchase with funds from President Obama’s emergency AIDS relief plan. The emphasis on earlier detection of the HIV virus coupled with the start of commercial sales of this product in Africa could result in significant market share gains over the next year and a half.
Finally, IMA’s analyzer that quantifies CD4 (a key measure of immune system health in people with HIV), could receive approval for sale in Europe in September.
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