Alere Inc recently announced 510(k) approval from the U.S. Food and Drug Administration (FDA) for its Alere i RSV test, a unified solution of rapid and accurate diagnosis of RSV diseases.
Notably, the news resulted in a modest 0.6% increase in Alere’s stock price. However, the company currently represents an unimpressive one year return of -23.86%, as compared with S&P 500’s return of 10.81% over the same time frame. We believe, the recent development will help Alere bounce back and rise against the unimpressive market sentiments.
Respiratory syncytial virus or RSV is a highly contagious and fatal virus that infects a person's lungs and breathing passage. The Alere i RSV test detects this virus utilizing iNAT (isothermal nucleic acid amplification technology) in the nasopharyngeal swab samples in 13 minutes or less.
The company is also set to apply for a ‘CLIA waiver’ (Clinical Laboratory Improvement Amendments) for the RSV test soon.
Taking a glimpse at the clinical performance of the test, the sensitivity and specificity for the tests are 98.6% and 98.0%, respectively, using direct nasopharyngeal swab samples. However, the same are 98.6% and 97.8%, respectively, using viral transport media.
As per management, the go-ahead not only enhances the versatility of the company’s flagship Alere i platform (that already has Alere i Influenza A & B and Alere i Strep A), it brings forth an opportunity for prompt, rapid and accurate delivery of results for RSV diseases, avoiding highly complicated antibiotic treatment procedures.
Following the prior market clearances of Alere i Influenza A & B (June 2014) and Alere i Strep A (Mar 2015), the latest FDA approval will pave the way for the company to fortify its market position with a broad array of products.
Even the global market trends seem to be quite lucrative, as an analysis by the Grand View Research reveals that the RSV diagnostic market is forecasted to reach a worth of $1.2 billion by 2022. Buoyed by this trend, we presume Alere, with its latest product development, will significantly gain traction over the long haul.
Stocks to Consider
Stocks that warrant a look in the medical sector are NuVasive Inc (NUVA - Free Report) , Lantheus Holdings Inc. (LNTH - Free Report) and Quidel Corp. (QDEL - Free Report) . Notably, all the stocks sport a Zacks Rank #1 (Strong Buy).
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