Diagnostics maker Corgenix revealed that it might offer itself up as an M&A target, which is one of several options the small-but-growing outfit is exploring in an effort to boost its shareholder value in 2014.
Along with a straight-up sale, Corgenix is also looking into the possibility of either a joint venture or partnership as its next play, according to its board of directors. Either way, Corgenix is aiming to build on its steady momentum, having posted solid earnings in the past year.
In fiscal year 2013, Corgenix reported its highest revenues ever at just over $10 million, showing 9.7% growth over the previous year. Among the company's biggest moneymakers was its contract manufacturing arm, plus increased demand for its diagnostic products, CEO Douglass Simpson said at the time. These include kits covering autoimmune, vascular and infectious diseases, as well as noninvasive liver biomarkers.
And currently, the industry climate makes M&A an attractive option, in part because reimbursement challenges are slowing down the process of putting out a new product. Take, for example, Quest Diagnostics ($DGX) and its recent $570 million acquisition of Solstas. That diversification could pay off down the line in light of the difficulties the company has had with getting its own products off the ground. Corgenix could also be looking to fill that role for a larger company with some cash on hand.
Corgenix has already notched a place with Big Pharma recently, inking a deal last May with Eli Lilly ($LLY) to help advance Lilly's cancer drug companion diagnostic.
"Given the positive results recently reported and current share price, we believe that now is the right time to explore strategic alternatives," Simpson said in a statement. "We will continue with our strategy of reducing cost, driving efficiency and pursuing opportunities provided by our cardiovascular biomarker technology and contract services business."
For Corgenix, it's all about getting the feelers out and judging whether they can turn last year's revenue growth into this year's big deal.
- here's the release
- and Corgenix's FY13 earnings
Editor's Note: An earlier version of this story mischaracterized Corgenix's financial statement. The company's annual revenue was just over $10 million--not its earnings, as originally reported.