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Bruker Buys SCiLS, Expands in Mass Spectrometry Imaging

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Bruker Corporation (BRKR - Free Report) , a major player in the field of life science, materials research systems and associated products, has recently announced the acquisition of Bremen, Germany-based software solutions developer, SCiLS GmbH. Financial terms of the deal have been kept under wraps.

We note that, SCiLS’ software solutions are used for the analysis and exploration of MALDI mass spectrometry imaging data. These solutions are particularly used worldwide, in areas such as biomarker studies and clinically oriented research, pharmaceutical research and microbiology. SCiLS recently introduced SCiLS Cloud facilitating collaborative research on a global basis.   

SCiLS uses comparative analytics to find biomarkers that discriminate pathophysiological regions (disease, disease adjacent, healthy), and for the determination of molecular margins.  Its feature extraction techniques make it simple to compare mass spectrometry imaging (MSI) data as against conventional H&E-stained FFPE tissue.

Per Bruker, currently 95% of all MSI data is acquired by label-free MALDI imaging systems.  The company is highly optimistic about this strategic integration. According to Bruker, the combination of SCiLS’ software and Bruker’s MALDI imaging systems like the rapifleX high-resolution MALDI-TOF (/TOF) and the solariX XR extreme-resolution MALDI-FTMS should successfully expand the scope of MSI from life-science research to pharmaceutical applications as well as to translational pathology research.

Bruker’s Recent Development with Maldi Biotyper

Bruker’s MALDI Biotyper is a revolutionary approach for the analysis of microorganisms. During the last reported quarter, the company launched MALDI PharmaPulse for high throughput for direct discovery on Rapiflex mass-spec system, which should fetch good orders from pharma companies. Earlier in 2016, it introduced Rapiflex MALDI-TOFTOF for detailed protein characterization in life science research and biopharmaceutical laboratories.

Bruker also expanded its MALDI Biotyper workflow’s menu to include selected high-value resistance testing for clinical microbiology research. The company launched MBT Biotargets, which help reduce operator error and save time in running tests on the Biotyper solution. Bruker further introduced new research use-only capabilities to the MALDI Biotyper product portfolio, for rapid testing of strains and selected antibiotic resistant mechanisms.

Share Price Movement

For the major part of the last three months, Bruker traded above the Zacks categorized Instruments - Scientific industry. Currently, the stock is down 3.2%, narrower than the loss of 5.6% for the broader industry.

On a positive note, the company's solid cash balance position on the back of improved free cash flow is indicative of strong fundamentals. Further, a comparatively better performance delivered by Bruker’s BioSpin group, optics and semiconductor metrology businesses as well as margin recovery observed in the Bruker Nano-surfaces business, encourage us. Current-year estimates for 2017 accordingly have increased by a penny over the past three months, indicating favorable prospects ahead.

Given an increase in the aging population, more number of individuals are likely to fall prey to illnesses, especially those caused by microorganisms. With the growing demand, Bruker’s MALDI Biotyper franchise has grown into an approximately $90 million system. Based on the recent developments, management believes Bruker is poised to double its microbiology business over the next four to five years. The latest inclusion of SCiLS is also expected to give a major boost in this regard, and enable faster progress in this field in the coming days. 

Zacks Rank & Key Picks

Bruker currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks include ICU Medical Inc. (ICUI - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Haemonetics Corporation (HAE - Free Report) . NxStage Medical and Align Technology sport a Zacks Rank #1 (Strong Buy) while Haemonetics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ICU Medical gained 36.9% over the last one year compared with the S&P 500’s 14.1% growth. The company has a four-quarter average positive earnings surprise of 46.3%.

Align Technology rallied 50.7% in the past one year, way better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 23%.

Haemonetics recorded a 27.8% gain over the past one year, better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 0.82%.

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