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Roche Holdings AG (RHHBY - Free Report) announced that it has obtained the FDA’s approval for the cobas Zika test for use on the cobas 6800/8800 Systems.

The approval makes it the first commercially available test for the detection of the Zika virus RNA in human plasma intended for use in screening blood donations.

This test can be now used alongside other routine tests for the screening of blood and plasma donations in the United States.

We expect a strong uptake in the use of Zika test given the need to prevent the spread of the virus.

The cobas Zika also expands Roche’s industry-leading donor screening portfolio for blood-borne diseases

We note that the cobas Zika test has been used under the Investigational New Drug Application protocol to screen more than 4 million blood donations from the United States and Puerto Rico.

Roche’s stock has rallied 14.2% year to date compared with industry’s gain of 21.1%.

Apart from providing therapeutic products and services for diverse medical needs, Roche also focuses on innovative diagnostic solutions for the early detection and treatment of diseases. Immunodiagnostics is the key focus area for this segment. In 2016, Roche added nine instruments and tests to its comprehensive portfolio, further improving decision-making in healthcare, and supporting laboratories’ efforts to increase efficiency. The launches including cobas e 801 immunoassay module, the CoaguChek INRange system to monitor vitamin K antagonist therapy, and the Accu-Chek Guide, a next-generation blood glucose monitoring system.

Meanwhile, Roche has a strong presence in the oncology market. The company dominates the breast cancer space with strong demand for its HER2 franchise drugs like Herceptin, Perjeta and Kadcyla. Apart from its strong breast cancer franchise, Roche’s oncology portfolio also boasts drugs like Avastin and Tarceva for lung cancer.

However, sales of Avastin and Tarceva continue to decline. Generic competition for Xeloda continues to hurt sales. Competition from biosimilars looms large on Roche's key drugs like Herceptin, Avastin and Rituxan. The FDA accepted Novartis AG’s (NVS - Free Report) Biologics License Application for a proposed biosimilar version of Rituxan. Hence, approval of new drugs and label expansion of existing drugs will bode well for Roche.  

Zacks Rank & Key Picks

Roche currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the health care sector are include ACADIA Pharmaceuticals Inc. (ACAD - Free Report) and Aduro Biotech, Inc. (ADRO - Free Report) . Both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA’s loss per share estimates have narrowed from $2.82 to $2.57 for 2017 and from $2.07 to $1.90 for 2018 over the last 60 days. The company delivered positive earnings surprises in two of the trailing four quarters with an average beat of 7.97%.

Aduro Biotech’s loss per share estimates narrowed from $1.36 to $1.29 for 2017 over the last 30 days. The company delivered positive earnings surprises in two of the four trailing quarters with an average of 2.53%.

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