Quidel entices investors with an FDA thumbs-up for its strep test

San Diego-based diagnostics maker Quidel ($QDEL) has seen its stock gain 6% to $29.50 since Dec. 30, when it announced that it received FDA clearance for its AmpliVue Group B Strep (GBS) assay, a handheld test that health workers can use to rapidly detect the disease. Now some analysts are predicting the company could see even more of a surge on strong demand for its rapid flu tests.

Quidel's GBS test uses a novel amplication technology that's similar to the one employed by its C. difficile assay, which it launched in early 2013, the company explained in a statement. The technology allows laboratories to perform "highly sensitive and specific" molecular tests with a disposable device, Quidel says.

According to the Centers for Disease Control (CDC), as many as 30% of pregnant women carry GBS, which can be transmitted to newborns. The CDC recommends that all pregnant women be tested for the disease.

Add to that the CDC's most recent data on this year's flu season and Quidel could see rather brisk demand for its products. According to the CDC, flu activity in the week before Christmas increased to 3% from 2.3% the previous week. Quidel markets three tests that can detect flu in as little as 10 minutes with nasal swabs.

"Although flu started slower this year compared to last season, we believe Quidel is poised to benefit from an uptick in distributor ordering for its flu tests through Q1/14," said Canaccord Genuity analyst Jeffrey Frelick in a late December report. Frelick estimates Quidel will report revenues of $175.1 million and net income of $10.3 million for 2013. He's anticipating significant growth for 2014, predicting the company will record $211 million in sales and net income of $16.5 million.

If there's anything that might halt Quidel's impressive run, it would be Obamacare, predicts Motley Fool. That's because the implementation of the Affordable Care Act "clouds the spending picture for numerous health providers over the near term and draws into question Medicare reimbursement rates in the future," according to Fool's December 31 assessment of Quidel's stock surge.

- read Quidel's statement
- here's Motley Fool's take
- read more at Zacks.com

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