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Diagnostic test kit maker Meridian Bioscience (VIVO - Snapshot Report) won the approval of the U.S. Food and Drug Administration (FDA) for its new illumigene GAS (Group A Streptococcus) test. This test is used to accurately detect acute GAS pharyngitis.

The most common disease caused by GAS, a bacterial infection, is pharyngitis. Per census, acute pharyngitis results in almost 15 million visits to physicians every year in the U.S. Roughly 20% to 30% of children requiring medical treatment are detected with GAS pharyngitis.

It has been found that regular laboratory testing such as throat swab culture and rapid antigen testing produce faulty results in roughly 1 out of every 10 cases. The advanced illumigene GAS test is capable of accurately diagnosing pathogens in throat samples using loop-mediated isothermal DNA amplification technology.

Management believes that the sophisticated illumigene GAS test will provide hospitals and laboratories a simple, highly sensitive and economical test, helping them in early detection and proper management of GAS.  Further, the quick detection of infectious pathogens will lower contamination risk, which in turn will reduce overall healthcare expenses.

Meridian specializes in developing diagnostic test kits for multiple serious and infectious diseases. The company’s diagnostics business faces strong competition from Abbott Laboratories (ABT - Analyst Report), Becton, Dickinson and Company (BDX - Analyst Report).

In December 2011, the company received FDA approval for the illumigene GBS (Group B streptococcus) test on the illumigene molecular test platform. Meridian is focused on introducing more advanced and effective technologies to expand its diagnostic test kits products portfolio.

Meridian in its recently released fiscal 2013 guidance revealed that it expects illumigene molecular technology platform to leverage top line growth along with Bioline products as well as its foodborne and H. pylori tests. However, the company expects the upcoming Medical Device tax from 2013 to be a drag on its bottom line. We currently have a short-term Zacks #3 Rank (Hold rating) on the stock.

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