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PerkinElmer (PKI) Gets COVID-19 Solutions Contract Extension

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PerkinElmer, Inc. (PKI - Free Report) recently attained a contract extension to continue operations at the National Health Service (“NHS”) Test and Trace Newport Lighthouse laboratory through March 2022. The collaboration with South Wales-based COVID-19 Lighthouse laboratory has complemented the U.K. government’s efforts to combat COVID-19.

Notably, the Welsh laboratory has successfully processed more than two million samples since October 2020 (when brought online) and is well suited to support the government’s daily COVID-19 testing requirements, central to guiding ease of restrictions nationwide.

The contract extension will retain PerkinElmer’s specialist team at the state-of-the-art facility to ensure delivery of maximum COVID-19 testing capacity on par with NHS Test and Trace’s testing strategy as the United Kingdom transitions out of lockdown.

This contract extension is likely to give a boost to PerkinElmer’s Diagnostics segment.

PerkinElmer’s COVID-19 Diagnostic Arm

PerkinElmer’s utilization of chemagic 360 instruments and JANUS G3 PCR+ Workstations in U.K. labs to automate RNA extraction and RT-PCR tests has proven to be a successful workflow solution, thereby enabling rapid high-volume sample processing at a lower turnaround time. This workflow solution along with RT-PCR kits will continue to aid in safeguarding testing capacity for NHS Test and Trace laboratory.

PerkinElmer has significantly contributed to the battle against the pandemic since the onset of the same. The company’s all-inclusive portfolio of SARS-CoV-2 offerings include high-throughput RNA extraction, RT-PCR assays, automated liquid handlers, integrated workstations, rapid antigen tests and serology tests.

Industry Prospect

Per a report published in Grand View Research, the global COVID-19 diagnostics market size is expected to see a CAGR of 3.1% from 2021 to 2027.Rising number of coronavirus-infected patients, several government initiatives to implement mass testing and integration of COVID-19 tests in routine diagnostic protocols particularly to pave the way for travel industry to operate post the ease of lockdown are among the key factors attributable to market growth globally.

Zacks Investment Research

Given the market potential, PerkinElmer’s contract extension to support the government’s testing strategy seems to be well timed.

Latest Developments

In May, Oxford Immunotec, part of PerkinElmer, announced that its T-SPOT Discovery SARS-CoV-2 kit is being used for T cell testing in the U.K. COVID-19 Human Challenge Study. The study, which is a national collaboration between the U.K. government, the NHS, academia and the private sector, will be using a custom version of Oxford Immunotec’s T-SPOT Discovery SARS-CoV-2 kit (for research use only).

In the same month, PerkinElmer’s entered into an agreement to acquire Immunodiagnostic Systems Holdings PLC (IDS). This acquisition is anticipated to boost the overall growth of PerkinElmer's Diagnostics’ business, particularly its immunodiagnostics segment. The deal will further facilitate integration of the company’s channel expertise and testing capabilities with IDS’s chemiluminescence products in endocrinology, autoimmunity and infectious diseases.

Again, in the same month, PerkinElmer entered into an agreement to acquire Nexcelom Bioscience. This acquisition is expected to integrate Nexcelom’s expertise and technologies in drug development with PerkinElmer’s efforts and solutions for drug discovery. It will expand the company’s position in cell biology leadership while extending support to academic, government and biopharmaceutical organizations to streamline their complete workflows.

Share Price Performance

The stock has underperformed its industry over the past year. It has grown 35.1% compared to the industry’s growth of 51%.

Zacks Rank and Key Picks

Currently, PerkinElmer carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the broader medical space include PetIQ, Inc. (PETQ - Free Report) , Computer Programs and Systems, Inc. (CPSI - Free Report) and National Vision Holdings, Inc. (EYE - Free Report) .

PetIQ, currently sporting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 25%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Computer Programs and Systems, which carries a Zacks Rank #1, has a long-term earnings growth rate of 14%.

National Vision, which carries a Zacks Rank #1, has a long-term earnings growth rate of 23%.

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