NEOGEN Corporation ( NEOG Quick Quote NEOG - Free Report) recently announced the launch of Reveal Q+ for the Aflatoxin M1 test — a faster and easier test to detect the presence of cancer-causing toxin aflatoxin M1. Notably, the latest test has been designed for use with the company’s Raptor Integrated Analysis Platform which controls the timing, temperature and reading of the test strips.
For investors’ note, Aflatoxin M1 is a carcinogenic metabolite (a substance produced during and is required for metabolism) of aflatoxin B1 which is produced in the rumen (first stomach) of dairy cattle. Notably, the new test can detect aflatoxin M1 in milk within a range of 150-600 ppt, the regulatory limit being 500 ppt in various countries (including the United States and Brazil).
With the latest test launch, NEOGEN aims to strengthen its Food Safety business on a global scale.
Significance of the Launch
Per management, the latest test along with the Raptor system is expected to simplify the testing process for dairy processors since they can now use the Raptor system to simultaneously test for the toxin as well as dairy antibiotics. This test will enable the dairy processors to simultaneously test a single sample for the presence of aflatoxin M1 and classes of dairy antibiotics of known concern, including beta-lactams (e.g., penicillin) and tetracyclines. This is expected to simplify the testing of milk samples to a large extent.
NEOGEN’s Reveal Q+ for Aflatoxin M1 uses the same incubation temperature and time as that of the BetaStar antibiotic tests, including tests for beta-lactams and tetracyclines.
Industry Prospects Per a report by Grand View Research, the global food safety testing market was estimated to be $18 billion in 2018, growing at a CAGR of 7.7% between 2019 and 2025. Factors like increasing demand for packaged and processed food, rising incidents of chemical contamination in food processing industries and growing consumer awareness about food safety are expected to drive the market.
Given the market potential, the recent launch is expected to significantly boost NEOGEN’s business worldwide.
Recent Developments in Food Safety
Of late, NEOGEN has been witnessing a few developments in this business arm.
The company, this month, completed its acquisition of Ireland-based Megazyme, Ltd., a renowned supplier of analytical solutions to quality control laboratories in the global food and beverage industry.
The company, during its fiscal 2021 second-quarter earnings call in December 2020, witnessed a robust performance by the food safety segment. The uptick in segmental revenues primarily resulted from strength in its sales of Soleris microbial testing system — Soleris Next Generation, and Listeria Right Now test system.
The same month, NEOGEN developed the new Reveal tests for horse, beef, sheep and poultry to determine meat speciation in raw meat and environmental samples in just a few minutes.
In October, NEOGEN launched a new food extraction method, Reveal 3-D Food Buffer, that expands the capabilities of select Reveal 3-D food allergen tests to include the direct testing of food products. Additionally, NEOGEN launched Reveal 3-D for Gluten, which offers the capability of extracting and testing food products and ingredient samples as well as environmental samples and clean-in-place rinses.
Shares of the company have gained 17.2% in the past year compared with the
industry and S&P 500’s 3.6% and 14.9% growth, respectively. Zacks Rank & Stocks to Consider
Currently, NEOGEN carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the broader medical space are
Hologic, Inc. ( HOLX Quick Quote HOLX - Free Report) , IDEXX Laboratories, Inc. ( IDXX Quick Quote IDXX - Free Report) and Patterson Companies, Inc. ( PDCO Quick Quote PDCO - Free Report) .
Hologic’s long-term earnings growth rate is estimated at 17.4%. The company presently carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
IDEXX’s long-term earnings growth rate is estimated at 15.8%. It currently carries a Zacks Rank #2 (Buy).
Patterson Companies’ long-term earnings growth rate is estimated at 11.1%. The company presently carries a Zacks Rank #2.
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