DiaSorin SpA
MIL:DIA
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
83.3
106.35
|
Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the DiaSorin Third Quarter 2022 Results Conference Call. [Operator Instructions] I would like to turn the conference over to Mr. Carlo Rosa, CEO of DiaSorin. Please go ahead, sir.
Yes. Thank you, operator. Ladies and gentlemen, good afternoon, and welcome to the quarter 3 conference call results. As usual, we're going to shed some colors on the quarter results in terms of the top line and the main fundamentals of the business. And then our Chief Financial Officer is going to take you through the numbers. So let's start from the top line. I remind everybody is going to comment on a constant exchange rate. As you know, otherwise, all the numbers are heavily affected by the revaluation of the dollars.
So at constant exchange rate, the business in the quarter performed at minus 14% versus last year that is according to expectations. And the reason for the decline is attributable to the COVID as you've seen from the numbers compared to last year's in the quarter, we have EUR 50 million down. And we are roughly EUR 90 million year-to-date. If we look at the business ex-COVID, the business grew 2% in quarter 3. And as a combination of several events, although there are a couple of things that I would like to highlight. We had 2 clear headwinds when it comes to the quarter results.
The first one has to do with the fact that in 2 geographies and mainly China and the Middle East. We had a performance which was heavily affected by the current situation. So China continues to be a drag. And as far as we are concerned, the main effect today with lockdowns. So we see that in the provinces where we sell, we continue to see a strong effect on volumes. And then in the Middle East, because of the current situation in Iran, we had to postpone some of the shipments. By the same token, we continue to see the effect of Russia, we were exporting until last year, and the export has been reduced to some very small amount. If we take away these effects, then the new diagnostic in the quarter would grow 6% year-to-date, 7%.
So this would be in line with company's expectations. Now if we look at the business, immunodiagnostic and we look at North America. North America, as you know, today does represented a majority of our business. Immunodiagnostic is growing very strong, 10% in quarter 3, 12% year-to-date. And if for one second, we take away the vitamin D franchise that, as you know, has been declining historically for DiaSorin. The rest of the Clear ex-D business in the U.S. grew 18% in quarter 3 and 25% year-to-date. What's the reason behind that success remains agnostic in North America, as we discussed many times, is the hospital strategy where a segment where DiaSorin was traditionally underpenetrated and because of the effort that we put in at the beginning of the pandemic in putting together a distribution footprint in terms of more reps and more territories and this clearly is continuous to pay out.
Today, we have -- until withstanding the effort, today, if we look at the available market in terms of number of hospitals that we serve compared to the total market, we are below 20%. So we still have a very long runway in front of us in terms of opportunity to grow in North America. When it comes to Europe, Europe grew immunodiagnostic 4% in quarter 3 and 5% year-to-date. So as you know, notwithstanding the current situation, economic situation in Europe. So the business is a stable business. We continue to grow. If you look at just the growth of the market in Europe, we estimate today the market grows at 1%, 1.5%.
So we continue to outgrow the market. The strategy is always the same is specialties and the margin contribution certainly is extremely positive. Now if we look at the rest of the world is in quarter 3 is 7% below last year. And this is exactly where we have the 2 headwinds that we were talking before, so export Middle East and China. With the except of these 2 geographies, if I take everything else, including countries where the company made an investment in infrastructure and I'm referring to India, for example, or Mexico or Brazil, where we have our local team. Just as a reference, India in the quarter grew roughly 20%.
And in the other geographies, we are growing high single digits or low double digits. So I think specifically, the problem we have seen in this quarter has to do with the 2 geographies and the events we've been talking about. Now let's go to molecular diagnostics, 7% growth in quarter 3, that is a good performance. For the [ molecular ] is again, we are talking about growth ex COVID and growth has been driven by COVID/Flu plus it has been driven by the fact that when it comes to the VERIGENE and the multiplexing business, we have that business notwithstanding is based on technologies which have been launched over 10 years ago is holding up, waiting again for the launch of the LIAISON Plex, which is going to be the new driver for growth in the segment.
When it comes to what we call licensed technology. Here is where in the quarter, for the first time, the business actually declined 4% in the quarter, but there is a reason about it which is the reason for this time, which has to do with the supply chain on the instruments that we manufacture, as you know, the business that we call license technology is a combination of consumable revenues, royalties that we get from partner distribution and instrument sales.
As far as this business, traditionally, the growth is high single-digit, low double-digit. And if I look at the royalty component, which is an indicator of what the partners are doing with our consumable and the consumable growth, the growth is very strong. Unfortunately, when it comes to the instrument component of this business because of the current supply chain issues and unavailability of certain parts. In quarter 3, we built less instruments than we have other for, and we are estimating that the gap today is between EUR 5 million and EUR 8 million in terms of systems that we should be delivering.
But as we speak, they are held in the quarter waiting for some of the parts to be completed. So this explains why, for the first time, licensed technology is not a growth component for the business. But again, it's nothing to do with the fundamentals of the business, again, has to do with the supply chain issue. But this also explained that why margins are very strong in this quarter withstanding the fact that we are missing some of the revenues.
And this is to do with the margin differential between consumer and royalties instruments, as you can imagine on instruments, the gross margin is relatively modest, whereas on consumables and certainly royalties, the margin contribution is very high. So the fact that, that component of the business goes well explains why the overall margins of the company are, I would say, very nice in the quarter.
Now let's talk about COVID. COVID continues to decline. It's roughly EUR 90 million below last year. Of the EUR 950 million, above EUR 50 million, around exactly EUR 53 million is in quarter 3. The decline versus last year, it is expected, as you can imagine because we don't sell the antigen test or the rapid test, which is a market that is declining, but not as much as molecular or certain [ technology ]. Although the decline we see is better than what we expected.
So it is -- the business is still holding in certain key strategic geographies. This is why we're actually performing better than our expectations. We still don't see in these numbers any effect on differential diagnosis, where we expect to see pickup in volume in Q4 and quarter 1, but they do result as we have discussed many times. So we're going to be able to comment on that, I would say, we are in the mid of the influenza season, which is around the December time frame. A couple of things that I would like to discuss have to do with margins. As you have seen, margins in the quarter are strong and actually better than what we expected. And this is -- what is very important to note is that this in spite of the headwind due to the inflationary effects that everybody, I believe, is facing these days. I think in the last quarter, we quantified the effect of inflation around $15 million annualized.
We revised this effect slightly to $17 million, mainly due to the effect of the cost of electricity in the European plants. Still margin vis-a-vis what you see in other -- in certain other industries and certainly manageable from DiaSorin perspective. By the same token, what's working good for us is to do as is the synergies that we are extracting from the consolidation of Luminex within DiaSorin, as we have discussed already previously, the program is in line with our expectations. And I would say, slightly better than we scheduled.
The other element, which is very important these days for us is that all the tenant money and education spend in the last few years in terms of improving the manufacturing cycles in our manufacturing side, especially when it comes to immunoassay now clearly, clear and coming to fruition. So notwithstanding a situation where there is price pressure, we continue to be able to hold our margins because of the efficiencies that we've been -- that we are driving -- we have been driving through to manufacturing. And that when we say it makes me quite comfortable even in this difficult types a combination of increasing cost and decrease in prices. Couple of notes when it comes to 2 key programs.
The first one MeMed, as you have seen, there has been a recommendation published vis-a-vis the U.S. CMS reimbursement, the proposed reimbursement is around $250, which is extremely high for an immunoassay. And I believe that what is extraordinary about the proposed reimbursement is that this has nothing to do with the technology per se, but it has to do with the benefit of the algorithm vis-a-vis the way patients are actually accepted and treated when it come to the emerging from. So that's very positive. And I believe MeMed as a company did a fantastic job in educating the regulators on the value of the asset. So that certainly will support and facilitate the marketing of the product in the U.S.
The second element, which makes me very proud in a sense, is the fact that BARDA just announced that they have decided to fund substantially the development of the LIAISON and the contribution of BARDA is $31 million, which -- what is very interesting is that these funds are not coming from the COVID fund. As you know, the emergency COVID funds pretty much are over. This is coming from the strategic funding, which means that this reflects the recognition of BARDA, the LIAISON platform with these characteristics of being easy to use and fast PCR response and can be disseminated in the categories. So in capillary system, is a key and strategic technology for the U.S. government. And that as you well know, is not simple for a non-U.S. company, so that I think is a very interesting encouraging side vis-a-vis the acceptance of this technology. So now I'm going to give the phone to the CFO, Piergiorgio, who is going to take you through the numbers.
Thank you, Carlo. Good morning, and good afternoon, everybody. In the next few minutes, I'm going to walk you through, as usual, the financial performance of DiaSorin during the first 9 months of 2022. And I will make some remarks on the contribution of the third quarter. Let me please remind you that consistently with what we did over the last calls, in order to better understand the performance of the business, I will refer to adjusted P&L items, therefore, stabilizing the impact of the Luminex deal-related elements. In the press release available on our website, we are providing a line-by-line bridge between adjusted and IFRS items. Please also remind that we completed Luminex acquisition in July '21. So starting from this quarter, we have the same perimeter of consolidation. So that, as usual, I'd like to start with what I believe are the main highlights of the period. 2022 year-to-date total revenues at constant exchange rate grew by 10% or EUR 82 million vis-a-vis 2021. as we saw as a combination of a decrease in COVID sales by 32%, more than offset by an increase in the ex COVID business by EUR 171 million.
The neurodiagnostics franchise ex COVID at comparable effect grew by 4%, driven by an increase in the CLIA x vitamin D business just short of 10% in spite of the weak result in the Chinese market that Carlos discussed about and the headwind we faced in the export business, partially offset by the negative performance of Vitamin D, the increasing 10% - in 4% of the immuno business and the ELISA franchises. The molecular business ex-COVID growth is mainly driven by the different perimeter of consolidation and by a very good performance of the molecular reagents.
The license technology franchise variance year-over-year is mainly due to a different perimeter of consolidation in the first half of the year, partially offset by the slowdown in the third quarter that Carlo just commented. Q3 total revenues at constant exchange rate decreased by 14% or EUR 47 million as a result of the anticipated decrease in COVID sales, partially offset by an increase of the ex-COVID business by 2% or EUR 5 million. We should be able to recover most of the gap in the license technology business that Carlos discussed in the immuno export business by the end of the year. These elements, the one that we just saw explain the soft increase in the immuno business and the decrease of the licensed technology franchise, whereas we saw the molecular franchise increased by 7%. Year-to-date adjusted EBITDA at EUR 391 million recorded an increase of EUR 8 million or 2% compared to 2021, with a margin of 39% on revenues compared to 45% of 2021.
The expected decrease in marginality is the result of the combination of a diluted gross profit, mainly driven by different product mix and the lower operating leverage, driven by the inclusion of Luminex in the perimeter of consolidation and the very high-quality sales of 2021. Both these elements are in line with the assumptions we made at the time of Luminex acquisition, and that's embedded in the outlook shared during the Capital Market Day and the updated guidance we just released today. Q3 '22 adjusted EBITDA margin at 37% or EUR 122 million, records a decrease towards Q3 '21 of EUR 17 million or 12%. The variance is mainly driven by lower COVID sales, EUR 47 million in the quarter to be precise, and as a consequence, a lower operating margin. We keep confirming our ability to generate a very healthy free cash flow, EUR 150 million year-to-date was an increase compared to last year of EUR 28 million or [ 13%].
As you might remember, when we released Q1 '22 results back in May, we announced that DiaSorin Board of Directors resolved to launch a share buyback program for a total maximum of 1.5 million treasury shares to support the potential settlement of the outstanding convertible bond and the management equity plan. As of the end of September, within that program, DiaSorin bought back about 1.3 million shares for an equivalent amount of about EUR 160 million. On a different note, and before moving to the main items of the P&L, I'd like to provide an update on the impact on the inflationary pressure on the selling total cost base. We saw that number was EUR 15 million, that's when we closed the half year. And at the light of the recent increases in energy cost, that number has been increased to EUR 17 million.
Now moving to the P&L items. September year-to-date total revenues at EUR 1,012 million grew by 18% or EUR 153 million compared to last year. Luminex products revenues in the period amounted to EUR 277 million vis-a-vis EUR 91 million in 2021. COVID revenues amount to EUR 201 million vis-a-vis EUR 176 million, therefore, recording a decrease of EUR 74 million.
The first 9 months of the year have seen some EUR 71 million FX tailwind, mainly driven by the USD appreciation. Considering Q4 '21 USD-euro exchange rate and the current FX trend, I think it is fair to expect that a similar positive tailwind will continue for the remainder of the year. And we will end up with a positive FX effect for '22 over '21, just short of EUR 100 million on the top line. September year-to-date adjusted gross profit at EUR 672 million grew by 16% compared to last year, closing the first 9 months with a ratio of revenues of 66% compared to 68% for the same period of 2021.
The full year contribution of Luminex and the different product mix are the main drivers of this variance. Q3 '22 adjusted gross margin at 68% is better than last year by 2 percentage points. The [indiscernible] in spite of lower quarterly revenues is driven by a different product and geographic mix and some one-off positive elements that we had in the quarter. I believe, though, it is important to underline that in spite of the inflationary pressure we discussed about, we have been able to put in place cost containment measures and initiatives that have allowed us to preserve our margins. September year-to-date adjusted operating expenses of EUR 345 million grew by 42% compared to the same period of 2021 with a ratio of revenues of 34% vis-a-vis 28% of last year.
This increase, once again, in line with our expectation, is mainly driven by the different perimeter of consolidation and a much higher COVID sales in 2021 that generated back then a very material operating leverage. Negative FX effects and higher product costs mainly drive Q3 '22 adjusted operating expenses increased towards last year of EUR 13 million or 12%. I believe it is important to underline that net of the FX effect and these additional travel expenses, we would have actually added decease in OpEx in spite of the inflationary pressure we just discussed about. Year-to-date, other operating expenses are substantially in line with last year. And as a result of what I just described, September year-to-date adjusted EBIT of EUR [ 390 ] million has decreased compared to 2021 by 3% or EUR 11 million.
September adjusted interest expenses at EUR 4 million are lower than last year by 30% or EUR 2 million, mainly because of better yield on our cash investment, whereas the adjusted tax rate at 23% is in line with 2021. The adjusted net result at EUR 244 million or 24% of revenues is lower than the previous year by EUR 4 million. Lastly, year-to-date adjusted EBITDA at EUR 391 million or 39% of revenues is higher than last year by 2% or EUR 8 million.
The variance at constant exchange rate is negative by 5% with a ratio of revenues of 39%. Let me now move to the free cash flow and the net debt position. In the first 9 months of 2022, as just said, DiaSorin generated EUR 152 million free cash flow, so EUR 28 million better than last year. At the end of September 2022, the net debt of DiaSorin was negative for EUR 1,012 million vis-a-vis negative EUR 986 million at the end of 2021. The difference is a result of very strong cash generation, which has been more than offset by the following items: the share buyback program for EUR 160 million, EUR 90 million of negative translation FX effect and EUR 56 million dividend to shareholders.
Lastly, let's now move to the updated 2022 full-year guidance, as usual, as previous year constant exchange rate. The guidance has been increased as follows: total revenue to grow between 2% and 3% with the next COVID business growth at about 22% and COVID sales at around EUR 225 million. And the adjusted EBITDA margin between 38% and 39%. The increase in the guidance for the top line is mainly driven to better provide sales, whereas the weak performance of the Chinese market is the core driver of the revision of the ex COVID sales.
Now let me please turn the line to the operator to open the Q&A session.
[Operator Instructions]. The first question is from Aisyah Noor of Morgan Stanley.
I have 2, please. The first one is on the shipment delays that you highlighted in the licensed technology business. Could I confirm that your revenues would have been EUR 5 million to EUR 7 million higher if not for the delays that you observed? And then related to that, how much visibility do you have in resolving this issue by Q4 and that, that situation is not going to impact your existing orders to be delivered in Q4 itself? And then the second is on multiplex on Luminex. Are you able to provide an installed base for the Luminex multiplex platform as of today? And could you provide some color as to whether you were able to expand the installed base this quarter?
Aisyah, thanks for your question. Question number one, yes, I confirm that, as said, had we been able to fulfill all the orders revenues will be higher by EUR 5 million to EUR 7 million. In terms of visibility in Q4, I don't think we have visibility these days because the supply chain is very weak. And we have deliveries of parts with a schedule in the next few weeks. But the real problem today is that they can call you 2 days before and simply delay the shipment. This is the current situation, I think, generally speaking, in the medical sector.
And if I may give a little bit of color to it because this is counterintuitive compared to what we see in the consumer goods. I have a feeling that the supply chain made a strains effort to work with consumer goods, although the designated victim has been our sector because our sector is typically low volume, high value, although what are some of the suppliers that we invested are telling us is that in order to fulfill consumer groups, we had to cut some merit.
And I think this is the price we as an industry are paying [Audio Gap] or actually, if you notice made some of the comments, I want to pick up on the comment that Stratec made specifically because it's a DiaSorin supplier. The only thing I want to make sure everybody understands is that when it comes to Stratec, that fortunately, the quarter is not really on the DiaSorin systems, so [indiscernible] has an excess in the MDX no problem of supply, although they cited supply chain issues with other systems. Second question about multiplex, no, we don't provide installed base because we believe it's a proprietary information, although my comment is that, especially with the LIAISON MDX system. Yes, we expanded the installed base. Clearly, there, the problem is that revenue per box are strongly declining compared to last year because of COVID volume. So your revenue persistent declining, although the installed base continues to continue to increase.
The next question is from Peter Welford of Jefferies.
I just got a few. Just first of all, just coming back to the underlying growth. I think largely a new note. I wonder if it's possible for you to quantify that the gap you mentioned of between 2% to 3% versus 6%. I think you said in the quarter excluding the headwinds. Can you possibly try and give us an order of magnitude of the effect of China lockdown versus the Middle East, Iran delays versus Russia? Just to try and give us some color as to the relative magnitude, I guess, of those 3 to account for that 400 basis point delta in the third quarter growth. And secondly then, just on the COVID trend. The outlook seems to imply less than EUR 25 million or roughly EUR 25 million in the fourth quarter of COVID sales.
I guess given your comment of you yet differential diagnosis pickup for the flu season in 4Q, 1Q, I guess why do you assume that COVID declined another 50% quarter-on-quarter in the fourth quarter apart from -- I mean I appreciate the [ numbers ] at this point. But I wondered if you can talk us through the mechanics of your thinking around that and why we shouldn't be assuming COVID at the very least is potentially flat on the third quarter, given the season is just picking up. And then just finally, just with regards to the MeMed recommendation from CMS. At this point now, what's the, I guess, strategy and procedure forward now? Is this not a case that you can begin rolling out and educating and marketing to the U.S.? Or how should we think about the strategy and the limited engaging factors from now for this to be rolled out in the U.S. market?
I'll take the last 2 questions, and I think P.G. will take your first question. As far as COVID, I don't -- sorry, but I don't understand the math. I think that if you take year-to-date versus expected, we are talking about around EUR 35 million delta, and that is 13% per month, which is today what we see without the effect of the differential technologies. So we always stated that it's pretty complicated to predict increasing the effect of differential diagnosis because it is going to happen at the end. And in the season we don't know what the medical guidance is going to be. So the COVID number and the logic of the COVID number is what we see today, what we experience today as our monthly current trend.
I believe, Carlo, if I may add a comment on COVID. The misunderstanding can come from the FX asset, which is pretty material in the quarter. So the guidance we gave for COVID is EUR 225 million at constant exchange rate. So you cannot compare the EUR 225 million to the EUR 201 million in the current exchange rate, I believe that is where your -- you should get EUR 25 million is coming from. What Carlo said is what we see is the 13 [ or in at ] constant exchange rate per month, I was moving [ you ] from the 190 or so, 189 at constant that we have year-to-date to the full year, if that makes sense, Peter.
We come to your question on MeMed and the strategy as you -- as you well know, to sell in the U.S., there are 2 elements which are needed. One is the approval and the second one is the reimbursement. So the approval we got now months ago. And now we are very close to getting also the second element, we meaning us and MeMed because MeMed has lot of responsibility for that to now get the second strategic element for the effective launch of the system. So what we are doing today, we are targeting a set of roughly 100 hospitals where DiaSorin system we've already installed. And we are going through an education program, whereby we clearly explain the value of this product within the diagnostic algorithm.
The easy news with hospitals. I think as we discussed last time, the strategy calls for an initial effort directed toward the education of -- in the children hospital because today, talking to the acquisitions in the emergency room, what they see as a primary objective or application for this product is actually an immediate diagnosis for kids showing up with no fever. And just I think we discussed it last time, in terms of numbers in the U.S., there are 4.5 million admissions, hospital admissions of children with a non-fever. And what is very interesting is that the European number is pretty much the same, around 4 million.
So there is today a total available market of roughly 8 million, 9 million admissions that MeMed and DiaSorin are going after with these new products. Certainly, as we have discussed, it required to the reward financially. As you can see from the reimbursement, it's very high. The effort of education also is very high because adoption requires education, [ capitalize ] education, which is what MeMed and DiaSorin are focused on primarily in the U.S. Question number one?
Yes. So I don't believe we are going to provide an exact breakdown of the -- where we are short in terms of China and the export business. As a ballpark number, year-to-date, China is accounting for, give or take, 50% rate year-to-date. And the remainder is the export business.
But Peter, I think that during one of the initial -- I think I think it was Q1 or Q2 calls, I believe that an analyst was asking how big is your Russia business, quantify the Russian business around EUR 8 million, combination between Luminex and the DiaSorin business. So the total amount of business at stake is around EUR 8 million. Keep also in mind that part of this business was COVID related, non-COVID molecular but COVID serology because last year, there was a very large adoption in Russia of the serology assays in absence of large availability of molecular. But just to give you an idea of the Russian damage versus last year is EUR 8 million.
The next question is from Maja Pataki of Kepler.
I have also several questions. I'll take them one by one. Carlo, starting with MeMed, if you look at the CMS recommendation with regards to reimbursement, does that change -- is that significantly different from what you were anticipating. Does that change the targeted price that you will sell at and therefore, also the potential target for 2025?
So Maja, do you want to ask all the questions together or one by one?
No, I was -- I think I'll take it one by one, then it's easier then it won't get forgotten.
Yes. Look, we had an expectation and with a range, and this is certainly on the high end of the range. It's -- if you look at the reimbursement, I don't -- I don't recall, honestly, immunoassay ever reimbursed at this level. And to me, it would and nothing to do with the DiaSorin because this effort is clearly attributable to MeMed. I think that what they were able to do was to explain that this not be reimbursed as a technology. So it's not an immunoassay, but the value is the medical information. Otherwise, typically, the U.S. - in the U.S. is reimbursed anything between $16 to $25, that's it. Okay. So but certainly just a short answer, a higher range of what we expected.
Does that change your -- the way you're thinking about your 2025 contribution from MeMed to your sales target?
You know in Italian, we say piano piano. So I think it is…
Okay. Fine. Good. Got it.
You got it?
Yes, I got it. Then second question, and apologies if I missed that, but you talked about molecular ex COVID growth in the quarter of around 7%. And it didn't seem like there were any extraordinary impact affecting molecular as it was in immunoassay. In your 2025 strategy plan, you have the molecular franchise growing very strongly on a CAGR base above 20%. And I know that there are several product launches coming. So my question is, can you help us -- how should we think about the growth cadence like our growth acceleration cadence over the next 3 years? Is 2023 going to be a low teens year and then going above? Or how should we model that? How should we think about that?
Look, Maja, yes, the growth that -- if you can imagine the dynamic here of growth and acceleration has to do with the fact that we're going to be introducing to the market 2 systems. One, which is brand new, where we need to build the business and that we as ones and for decentralization, that's one piece. So there we start from zero with all critic business. The other one is LIAISON PLEX which when we discussed, I believe, the strategy of that, we have an existing installed base of several hundred customers, especially in the U.S., that today are using the current platform with -- and that business was traditionally built by Luminex primarily on the blood culture assays because the VERIGENE system was the first system introduced to the market with blood culture panel, and that is where they build. And this, by the way, explains why, if you look at the -- our mix of revenues in multiplex versus the BioFire revenues, BioFire is 70% dependent, I think, on respiratory. Whereas for us, the respiratory component is relatively small.
So the plan there is clearly to go to the existing installed base upgrade the installed base to the plex and then build to add to the blood culture with gastro and the respiratory, okay? But certainly, the competitive part of this, in my opinion, is the gastro, which is through differentiating the respiratory panel is certainly very important and very sexy these days, but it's also a very crowded space, as you can imagine. So long story short, the growth that you see later has to do with the full addition with these 2 product lines to our arsenal.
When it comes to the performance of the business as we speak, I think 7% growth -- let's understand the portfolio we're talking about. We're talking about the LIAISON DX so single plex. The area is all the technology that today is pretty much COVID business. And as you can imagine, is important growth element with a drag element to the top line. The LIAISON MDX continues to grow, and that is where we are expanding the base. And we have -- we do have in the first waiting for approval of the congenital CMS assay for the U.S. as it goes into the children hospital segment. And then the [indiscernible] that has been launched as an ASR and then the next plan is going to be the assay to come on the MDX. So it's an MDS strategy.
The other the rest of the portfolio, which is what we inherited for Luminex and the multiplexing, you have VERIGENE I that is holding up and growth not necessarily by placement. It grows depending on 2 elements. One is how the respiratory part goes, even if it is small, is still there. The other one is volume growth because we are not -- I think the multiplex business is not at the glory days where the volume was growing 25%, but still we have volume growth. So if you hold on to the base, you see volume growth. To the content of the multiplexing portfolio, which I think you need to keep in consideration. So there is a first generation technology, which is very manual which we call non-automated assets, that is actually manufacturing in Toronto is extremely profitable with anything in this business that we do manually. But by the same token is the older piece of the technology, which is certainly declining. So if you consider these banks that you have, 7% growth without the new systems is fairly visible. By the way, profitable, and these days in molecular to be profitable without COVID, I think, is not [ simple ].
Okay. Perfect. And my last question, P.G., you talked about the business ex COVID growth at 29% CER for the 9 months. Could you give us a number for the third quarter? Because I remember that there seems to be a bit of a difference of the FX impact on the base business and COVID revenues?
Yes. For the third quarter, you mean Maja, without COVID, it's 2%. 2% is a combination of all of those elements we discussed about immuno molecules technology.
The next question is from Hugo Solvet of Exane Paribas.
First on COVID that you see any positive impact from stocking on your COVID number in Q3? And then on -- for Carlo, you mentioned on the Q2 call that you were losing some customers on the VERIGENE I. Given the strength of your Luminex business in Q3, is that something that you have managed to stabilize in Q3? And lastly, on LIAISON XS, can you give us indications on where you are on the rollout here and the contribution for the growth in the immunodiagnostics segment?
It quite difficult to hear you, but let's understand if I try to answer to what I understood and correct me if I'm wrong. So when it comes to stocking, I know that specifically one competitor in the quarterly report, they announced that Q3 was very strong because of stocking, and we didn't see any impact because in the geographies [Audio Gap] do not want people alert customers of any stocking needed. So no stocking effect in Q3. The second question, if I understood correctly, has to do with VERIGENE. But I believe that when I explained the business to Maja just 2 minutes ago, I think I gave good color on the VERIGENE I business that we have, as said, we're raising one business, just to summarize, 3 characteristics is North America business.
So we don't have a noticeable installed base outside the U.S. It's primarily gastro and blood and respiratory is only 30%. It enjoys volume growth that is not double-digit as we used to be, but multiplexing adoption and users is still increasing low single digits. And certainly, is a profitable business for DiaSorin. The third question, if I understood correctly, is LIAISON XS. Is that the question?
Yes.
Okay. The rollout of the LIAISON XS, if you remember, the LIAISON XS program was primarily directed to geographies. And one is China, and that, as you can imagine, is frozen. Second one is the U.S. And actually, the rollout is starting in the year because we got approval of the QuantiFERON on the LIAISON XS. So now we have the full menu for the LIAISON XS. Today, we were able to serve the hospital segment in the U.S. with LIAISON XS because of the QuantiFERON and stool volume that was big enough to justify placement of LIAISON XL. LIAISON XL is clearly part of the next 3 years plan in the U.S. that as said, DiaSorin is going to be focused on continuing the expansion on the hospital segment, which is working very well for us. And now we are moving from the large institution to the midsized institutions, and there is where LIAISON XS plays a role. But now we have the full menu approved and the program is starting.
The next question is from Odysseas Manesiotis of Berenberg.
Firstly, on the immunoassay manufacturing operating efficiencies that you mentioned, are these largely taking through now? Or is there more runway for efficiency gains here in 2023? Secondly, on the back of this, could you also update us on any progress in pricing increases? I understand that you're still working on this, but it would be a realistic timeline to think that you will take through these price increases, let's say, next year? And last one, a follow-up on your U.S. hospital strategy. You said you're now at just below 20%, I think around 200 hospitals give -- and that you have some decent runway to grow further. What is your realistic target for, let's say, a steady-state market share here over the next 3, 4 years, if you could provide that?
Okay. On the immunoassay efficiencies, I think that what we have today is a European footprint, which is in very good shape, where we have consolidated everything where it was needed. And so I don't expect more efficiencies in Europe. I believe that today, the plan is to focus on our U.S. footprint, where the next year, the Minnesota plant is going to be the one that -- where we will start to see fruition from all the programs we set in place. And in parallel, today, we did not focus necessarily on footprint of Luminex because we just bought the business. Today, the -- when it comes to Luminex, the primary objective was actually to invest in one of the facilities where we're going to be investing close to $20 million and we are investing $20 million to set it up for the manufacturing of the flex. All the investments for [ NES ] were already done by DiaSorin the acquisition of Cypress, so that building is ready to go. So there is no more need. Certainly, now we need to bring a little bit more discipline the molecular team.
And what I call discipline is that I think I made this comment before, coming from literally a 2 cents business, which is the immunoassay business, 2 cents business, meaning that you must make your money with a relatively low price business. When you get to the molecular space, what we found amazing is that the molecular companies tend to assemble stuff that they buy rather than making stuff that they buy, which is exactly the contrary of what we have in immuno. So we started already at DiaSorin before the [ Neles ] acquisition on effort to in-source manufacturing raw material, which was very successful. Now that we have a much bigger footprint, that effort has to continue, and we are actually -- we are coming to the end of a period of time where we have looked at the benefits of the in-sourcing and rationalizing some of the stuff. And I believe that in the next 2 to 3 years, that is going to be the effort.
And I think that the benefit we have seen when we looked at Luminex from a distorting perspective, more discipline, which we now call synergies, but more discipline in manufacturing, equal an opportunity of margin expansion. And if you look at what Luminex was and again, referring to public numbers, in 2019, Luminex was actually -- it was the first -- the last pre-pandemic year, I think they reported a 7% EBITDA margin. And today, we don't disclose the Luminex EBITDA margin. But if you look at the overall company, DiaSorin margin, which is 38%, you understand that a little bit of discipline really gave us great results.
So long story short, I believe that the next 2 years are going to be a strong effort in the North American manufacturing platform to get the same efficiencies we got in Europe. Second thing, price increase. We have raised prices for our [ LPG ] business, as a consequence of the fact that contracts are allowed to do so. And so we did raise price in coming effect in January 1st, 2023. So by the same token, our partners we increased price through the channel to the customers, which are the research and pharmaceutical institutions that to the content of the IVD business, the business, the price elasticity is far bigger. Now we have engaged with a consultant to look at our IVD business and understand how much of that business is subject to contractual terms that cannot be touched and how much the business certainly can enjoy in an inflationary environment price increase. And I cannot quantify it right now because we're in the middle of the process is a very long one because you need to take all contracts.
But I believe that there will be an effect also on the IVD. I cannot quantify it right now. When it comes to the hospital strategy, as I said, if you look at in the U.S., overall, our 5,000 hospitals if you count all of them, we believe that only a certain number of hospitals is actually a good subset of hospitals where we can sell our platform because of menu and size of the systems and throughput. So today, we serve as DiaSorin in the last effort roughly 250 hospitals. I'm sorry if I still refer to the Luminex, but that's still, unfortunately, this is the way we look at the business. So all DiaSorin through its effort came to serve 250 hospitals out of total available market, which we estimated around 1,200. Luminex to the contrary, because of their implementation was actually serving roughly 500 hospitals in the U.S.
The good chunk of this are actually smaller institutions that we would not be able actually to approach or leverage on with our own platforms. But we estimate that 20% of this hospital, which today we don't serve actually an opportunity of what we call top-line synergy. That would be considered. So there basically to cross-sell across the B2B customer groups. As you know, starting from -- right after the acquisition, one of the first effort was to redesign the U.S. commercial footprint, which we did. So now we do have in place all the reps and everything that is needed to go after the business. So just to understand each other, we are saying that today, we still have -- we do have an opportunity of 1,200, 1,300 overall institution in the U.S., of which we serve 250. And then we have 100 that we are serving with some products and so with others. I'm saying the runway is still big for us.
Mr. Rosa, there are no more questions registered at this time.
Thank you, operator. Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.