Luminex ($LMNX) is warning that a challenging reimbursement environment for diagnostic tests could crimp earnings in the second half of 2013, despite healthy gains so far this year.
It is an echo generated by an increasing number of diagnostics companies as they begin to grapple with tougher reimbursement standards from both CMS and private insurers.
Luminex president and CEO Patrick Balthrop explained in the company's 2013 second-quarter financials that the Centers for Medicare and Medicaid Services' new molecular diagnostics code system this year has created "administrative issues." That, combined with decreased use of "certain molecular assays," has led to a "deceleration" of the overall molecular diagnostics market, he noted.
At the same time, Luminex kept its 2013 annual revenue guidance to between $220 million and $230 million, but the company said the aforementioned challenges could end up cornering the final revenue number into the lower end of the range.
That said, Luminex's consolidated 2013 second-quarter revenue hit the $54.3 million mark, a 12% hike over nearly $48.3 million booked during the same period a year ago. Net income also landed at a healthy $7.2 million, up from $6.3 million during the second quarter in 2012.
Luminex's second quarter assay revenue jumped 24% to $21.7 million, versus $17.5 million a year ago. System sales declined, but consumable sales and royalty revenue all jumped by high single-digit or double-digit percentages. Balthrop attributed the positive numbers, in part to the company's transition to a direct molecular diagnostic sales force.
During the quarter, Luminex also reupped at least one major agreement. The company signed a long-term deal with Merck KGaA's EMD Millipore to provide assays for Luminex's research technology.
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