Investors seem to like the fresh blood injected into Iris International Inc. by a foreign partner.
The Chatsworth company, primarily known as a developer and distributor of urinalysis systems, announced a deal last week to distribute a blood analysis system made by Alifax S.p.A. of Padova, Italy.
The announcement of its new product line made the company one of the biggest gainers on the LABJ Stock Index last week. (See page 42.) Shares closed July 18 at $12.09, up 7.9 percent from the previous week, even as the S&P 500 fell.
Iris has been a longtime leader in automated urinalysis systems, which calculate cell and bacteria counts. The testing is used in diabetes management and to monitor kidney function.
Alifax products automate blood testing, specifically for diagnosing conditions such as arthritis or cancer. The tests are now primarily performed manually in U.S. laboratories and take an hour to complete. Alifax’s system reduces the time to less than one minute, saving laboratories time and labor costs.
Alifax has sold more than 4,000 of its blood-testing units in Asia, Europe and South America.
The Italian company previously had formed partnerships with two U.S. distributors, but both efforts ended without success.
Thomas Warekois, president of Iris’ diagnostics division, said Iris already has relationships with laboratories thanks to its automated urinalysis products. The same labs would be using automated blood-testing products.
“We’re expanding into a strategically adjacent business,” Warekois said.
Iris’ primary rival for automated urinalysis is Siemens AG of Munich. Warekois said that Iris won’t be competing with other companies in the automated blood-testing market. The challenge will be to introduce it to labs that now use the manual method.
Some U.S. laboratories have started using the product on a trial basis and will report on their experience later this year. Warekois expects to start shipping the automated blood-testing units to customers by September.
Raymond Myers, analyst at Benchmark Co. LLC in Philadelphia, said that the move into blood testing will likely be a considerable boost for Iris. He expects growth to be gradual, but enough to increase earnings per share by a couple of pennies in the next year.
“One of the things I like about Iris is their equipment helps to make health care more economical, which I think is a critical theme today,” Myers said. “We need to do more with less money.”
