Abaxis, Inc. (ABAX - Analyst Report), a manufacturer of point-of-care blood analysis systems for medical and veterinary markets, recently launched its new Kidney Profile Plus panel for the treatment of critical and chronic renal disease in animals, especially in canine, feline and equine species. This VetScan Kidney Profile Plus (KPP) Rotor will be exclusively used on the company’s VetScan VS2 Chemistry instrument that performs 25 different tests configured in 10 unique panels.
According to Abaxis, enriched with all necessary critical chemistry analytes, this KPP rotor is perfectly fit to diagnose and monitor kidney disease in animals. The company also claims that this product, together with other VetScan point-of-care instruments for hematology and blood gas analysis will make a complete and cost-effective package and add to the huge menu of Abaxis panels for the VetScan Chemistry Instrument.
We note that Abaxis’ veterinary instruments fulfill a substantial part of the clinical diagnostic requirements of veterinarians and the research marketplace. As per recent data, one third of the North American veterinarians practice working with Abaxis instruments for routine wellness testing and annual check-ups.
We believe that this is a large market with an attractive growth profile, as increased spending is driven by the rising number of households with pets, enhanced human-animal bonding, aging pet population, more focus on animal health or preventive care, and advancements in pharmaceuticals and diagnostic testing. Abaxis is performing well in its veterinary division with an expanded product line and a growing direct sales force. The company also intends to introduce more rapid assay of products, which would boost the veterinary revenue.
Abaxis remains a strong player in the veterinary market which accounted for 78% of its total revenues in fiscal 2012. Revenues from this segment recorded robust growth of 17% during the last reported quarter. Alongside, Abaxis Veterinary Reference Laboratories’ (AVRL) performance in the third full quarter of operations complemented growth of the company’s veterinary segment. Abaxis is optimistic about its consistent performance in the veterinary market and expects maintain this growth momentum in the upcoming quarters.
However, we remain apprehensive based on Abaxis’ dependence on distributors to sell its products and increased legal expenses. Besides, the presence of many big players like Alere (ALR - Snapshot Report) and Idexx Laboratories (IDXX - Analyst Report) has made the human and veterinary diagnostic market highly competitive. Currently, Abaxis carries a Zacks #5 Rank (short-term ‘Strong Sell’ rating).