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Diagnostic testing technologies company Luminex Corporation (LMNX - Analyst Report) has won the U.S. Food and Drug Administration (FDA) as well as the European CE Mark approvals for its xTAG CYP2C19 Kit, a novel personalized medicine genotyping assay. This new in-vitro diagnostic (IVD) test allows physicians to provide patient-specific treatments based on certain variants of the P450 2C19 (CYP2C19) gene.

The CYP2C19 enzyme is known to contribute to the metabolism of many clinically relevant drugs used to treat a number of conditions such as ulcers, seizures, malaria, and anxiety. It also aids the metabolism of drugs such as beta-blockers, anti-clotting agents and some antidepressants.

Genetic variations in the CYP2C19 gene can lead to sub-optimal drug reactions, such as drug toxicity, adverse drug reactions (ADRs), or inadequate therapeutic effect. According to the FDA Adverse Events Reporting system (FAERS), about 800,000 ADRs cases were reported in the U.S. and Europe in 2011.

Moreover, the Centers for Disease Control and Prevention (CDC) has estimated that every year about $3.5 billion is spent on additional medical expenses associated with ADRs, out of which, at least 40% of ambulatory ADRs can be prevented.

Luminex's xTAG CYP2C19 Kit should help curb the occurrence of fatal ADRs, as the IVD assay is capable of efficiently analyzing a patient’s CYP2C19 genotype. This, in turn, should enable physicians to prescribe proper medications, thereby optimizing individual patient care.

LMNX possesses an extensive product portfolio and a healthy pipeline of novel assays, which are expected to support growth going forward. Along with the xTAG CYP2C19, the company’s pharmacogenetic assays also include the xTAG CYP2D6, which is both CE-Marked and FDA-approved.

LMNX has a Zacks Rank #2 (Buy). Its second-quarter 2013 adjusted earnings per share of 12 cents beat the Zacks Consensus Estimate of 10 cents per share by 20% and were up 50% year over year. Revenues surged 12% in the reported quarter to $54.3 million, also beating the Zacks Consensus Estimate of $54 million.

Other medical instrument companies that are worth considering include Given Imaging , Cynosure (CYNO - Snapshot Report) and Echo Therapeutics (ECTE - Snapshot Report). All these stocks carry a Zacks Rank #2 (Buy).

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