Biomerieux SA
PAR:BIM
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 |
88.75
110.3
|
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 day, and welcome to the bioMérieux Q3 2018 Business Review Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Sylvain Morgeau. Please go ahead, sir.
Thank you very much. Good day, everyone, and thank you for joining us to review bioMérieux' performance for this third fiscal quarter of 2018. As usual, I'm on the line with Mr. Alexandre Mérieux, Chairman and CEO; and Mr. Guillaume Bouhours, CFO. Alexandre will start this call by a short introduction to give you his main takeaway messages about the quarter, and then most of the call will be dedicated to the Q&A session. Before I hand the call over to management, please note that this conference call will include forward-looking statements. I would like to remind you of the usual disclaimers, in that forward-looking statements are based entirely or partially on assessments or judgments that may change or be modified due to uncertainties and risks related to the company's environment, notably those described in the 2017 registration document, including, but not limited to, economic condition, financial exposure to currency exchange situations, change in government policies or regulation, third-party reimbursement policies, timing of the onset, length and synergy of acquisition and competition. Accordingly, we cannot give any assurance as to whether we will achieve these objectives. bioMérieux issued its press release related to the third quarter of 2018 business review this morning at 7 a.m. French time. If you have not received our communication or if you would like to be added to the company's distribution list, please feel free to contact me. I also remind you that today's call is being recorded and that the replay will be available on the website, www.biomerieux-finance.com, shortly after the call. And with this, I'll hand the call over to Alexandre Mérieux.
Thank you, Sylvain, and good day to everyone. So let's start with a few words on the quality performance of bioMérieux. So again, it was a strong performance, which was recorded during the third quarter, with sales of EUR 580 million, up 8.8% on an organic basis. These solid results were primarily driven by the sustained increase in BIOFIRE sales and by a solid quarter in Asia Pacific and in Europe – Middle East – Africa. Now let's get into more details on these 3 drivers. Starting with BIOFIRE, where sales increased 38% as compared to Q3 '17, still by the solid expansion of international sales that represented 17% of total sales on BIO and some results in the U.S. as well. After 9 months, the growth of FILMARRAY reached about 40% on an organic basis. The continued development of the installed base, and it drove 600 additional units over the quarter, out of which, about 1/3 were outside of the U.S. This expansion allows to display our global installed base of 7,600 FILMARRAY units throughout the world. All panels continue to grow healthily, in particular, GI and meningitis. The next panel to be launched will be the Pneumonia Panel that...[Technical Difficulty]
Oh, sorry. We have been cut.
Sorry for this. Okay.
And sorry for this, and we continue -- we go on.
I didn't touch anything. Okay. So I stopped with FILM -- I come back with Asia Pacific, where the growth for the region was mainly supported by India and Southeast Asia, with China recording a slightly lower growth than in previous quarters, which were particularly stronger. After 9 months of activity, the region is growing in the mid-teens, which is very satisfactory. We believe that Asia Pacific is a very important region for the future growth of bioMérieux, hence the importance to strengthen our position in this area of the globe. In EMEA, the breadth of the portfolio allowed to perform well in many areas, particularly in Russia -- Middle East -- Africa, up more than 30% in this subregion, where we do not expect it to be recurring in Q4. Before switching to Palmetto, I would like to get back to global numbers for the quarter and to the FX impacts. As you can see, the revenues reported in euro are still impacted by negative ForEx effects in Q3, but to a much lower extent than in previous quarter. bioMérieux recorded an EUR 8 million negative ForEx impact in Q3 against EUR 83 million in the first half of the year. After 9 months of activity, sales growth reached 9.8% on an organic basis and 4.5% when reported in euros. We still need to grow our sales by about 8% against high performances in Q4 '17 to reach the targeted growth for the full year. So aside from sales results, we also wanted to comment on the recent change of status of the local coverage definition from Palmetto. As you are all aware, Palmetto, a Medicare administrative contractor, issued last September a final noncoverage policy for high multiplex molecular tests on viral respiratory infections in outpatients. Palmetto did not take into consideration the comments from us, from medical scientists, about the needs and benefits of the high multiplex pneumonic panels in certain populations. It appears that Palmetto was not convinced that the use of large respiratory panels allows better informed treatment decisions and finally, improved patient outcome. We will continue to emphasize the medical value of syndromic testing, the many positive public health impacts this testing brings to patients and hospitals, and the solid reimbursement still available. Indeed, the reimbursement allowed by Palmetto in viral respiratory tests will be about $140 per test. This weight would be applicable to large viral panels as well. You have to know that FILMARRAY RP panels include 3 to 4 bacterial targets, which are still being reimbursed in addition. This will lead to a total reimbursement of between $260 to $300. We would like also to remind that the majority of FILMARRAY tests are run on inpatients, where the cost of the test is covered under a DRG payment, whereas the decision is applicable to Medicare outpatients only. We remain convinced that syndromic testing is a major breakthrough in the FILMARRAY infectious disease diagnostic, and bioMérieux will continue to promote this approach. Beyond pure viral infections, the FILMARRAY Respiratory Panel allows to differentiate viral to bacterial pathogens, to detect coinfections or secondary bacterial infections and can play a crucial role in ensuring the light usage of antibiotics. Syndromic testing has become a standard of care in infectious disease and is very relevant medical solutions for certain patient populations. As a consequence, bioMérieux intends to continue to lead this fast-growing market with FILMARRAY that has unique features to remain the reference in the market. And with this, I propose to move on to the Q&A session. Thank you.
[Operator Instructions] We will now take our first question from Romain Zana of Exane.
Yes. The first one will be on Palmetto. First, when do you expect this new regulation to really impact your business? And that's the first thing. And second, to make it clear, at this stage, do you expect some sales to completely, let's say, or a proportion of your revenue to vanish? Or do you expect, let's say, the bulk of it to remain valid under the new reimbursement that you have just mentioned?
Okay. First question is, well, I think it will applicable by mid-November. That -- this is what, I think, Palmetto has said even if meanwhile, we have the time to come back proposing, I would say, given our medical and outcome studies promoting the value of syndromic. Regarding expectations, today, I would say, it's quite recent news, I would say. What we can tell you, Guillaume is here to talk more about what we did, the direct populations, which is potentially impacted, knowing that this is only for outpatients, which are quoted by batch.
Yes, exactly. To clarify for everyone, the targeted population, you know that FILMARRAY is about almost 20% of our global bioMérieux revenues. Of course, Palmetto only covers for U.S. patients, first thing. Second, the decision is on the Respiratory Panel, which is the bulk of our offering. And of course, most important, as Alexandre mentioned, this is only targeting outpatients testing, which are estimated to be about 20% to 30% of the RP test today. And finally, of course, Palmetto applies to a number of Medicare jurisdictions. So even including, let's say, all Medicare patients that are outpatients for RP in the U.S., we have a targeted population, which is below 2% of bioMérieux revenues.
Okay. And sorry if I was not clear in my question. I was not really speaking about the exposure, but rather about the lapsed behavior that you are anticipating. I mean, do you think that the new reimbursement will be still enough for them to continue performing RP? Or do you think that the incentive, let's say, the economical incentive for outpatients will be too low?
I think for inpatient testing, which is the vast majority of the patient...
Of outpatients.
Oh, for outpatients? We believe the fact that the decision is under viral panels. As I mentioned, is that we have bacterial targets within the FILMARRAY, which is the beauty of it, and I think this -- we believe that this will still be covered. So we believe the reimbursement should be $260, $300. I think it gives still a good potential to be used in the hospital for the outpatients. Now also, we have the need to wait for the prescription, but I think our mission is to defend syndromic, which we will keep on doing because we really, really believe in the medical and economical benefit of this solution.
We will now take our next question from Bill Quirk of Piper Jaffray.
Staying on Palmetto, I guess 2 questions. The first is, do you expect to see other private payers follow Palmetto's lead? So is there peers as if there's some interest in the commercial payers? And then secondly, concerning the inpatient versus outpatient difference, we certainly appreciate that the majority of your business is inpatient. However, are you suggesting that you're going to have 2 different pricing tiers for a hospital? That seems a little strange. I would think that most hospitals would negotiate a single price on the assay irrespective of whether or not the testing is done on an inpatient versus an outpatient basis.
No, no. I forgot the first question, sorry.
The impact...
Impact on commercial payers...
On impact. Yes, we believe that, yes, I think Palmetto today covers only 7 or 7 ways, such 7 dates. We believe that it's likely that there are some of those who might follow this recommendation. To your second question, no, no, that we will defend this unique value with a one pricing policy, whether it is for inpatient or outpatient.
We will now take our next question from Hugo Solvet of Bryan Garnier.
3 questions, please. Still on Palmetto. What's your view on the reimbursement pressures that could roll into the investment setting? Second, on immunoassays, could you comment on the decline of manual rapid tests, and should we expect it to be temporary? I mean, could you just give us an idea of the contribution of these tests to the turnover of the division? And third one, on Asia, could you share some numbers or at least qualitative comments on China? You had a pretty strong start into the year, and I was just wondering what could drive the slowdown in the country in the third quarter.
Okay. First question is on the view on reimbursement on the private...
Inpatient...
Inpatients. Now as I mentioned, I think we're under DRG. So DRG is diagnosis-related groups, which is where a lump sum of money, which is allocated to follow a patient from diagnosis to treatment, hence, I would say, the cost of the value, I prefer the FILMARRAY, embedded in how we treat the patients. So at this stage, we don't see more questions on that front as long as we keep on promoting and listing the value. You...
Rapid tests. Yes, rapid tests, the revenue. Yes, rapid tests, as you know, is a very small product line. It's actually the -- lower than 0.5% of total group revenues. So really, a very small, not a strategic line, I would say. And we had, let's say, a big -- a high reference of comparison last year with some of the tender offers that we have won last year in the first 9 months of the year. So actually, that's why we are a bit different this year.
Regarding Asia or China, China, no, I think it's part -- appreciated to see the 9 months' view, where we display a growth above the -- more than the budgeted. Actually for performance, I think that the -- actually, the standard, the trends are good in China, and we believe we'll be able to work on sustaining the double-digit growth, which I know, no major thing to comment around this quarter.
We will now take our next question from Maja Pataki of Kepler Cheuvreux.
Alexandre, I was just wondering, you've highlighted or you outlined to us the additional pathogens that you have in the panel which should generate additional reimbursement. Do you think that the procedure to get us to reimburse is going to be complicated and could present a hurdle for that? And then the second question was more a clarification. Did you say that you expected commercial payers to actually follow a Palmetto decision where this applies?
Yes, I'm going to ask my neighbors to make sure I understood the first question.
The first question is about the way to get this additional pathogens into additional reimbursement. It's actually very simple. It's included -- it's already applied by the number of our customers. Yes, so it's not a new one. It's just a way for us already today, which you understand, of course, when we quote for viral and additional quotes for the bacteria that are in the panel as well.
Regarding your second question. Yes, so we -- some private payers, most are moving to this direction. However, many of the consultants have already reviewed and implemented positive reimbursement policies for FILMARRAY. So at this stage, we don't see -- we'll have to follow, of course, but at this stage, we don't see a shift.
And just a follow-up. With regards to GI, do you believe that there will be a same pattern, so basically, we'll have a major cost in the reimbursement, but then you will have some bacterial or fungal pathogens that will allow for additional reimbursement?
We know they will comment also or give a decision around GI, but we are, at this stage, not receiving any update so far on the LCD related to GI panels. It's difficult to anticipate -- okay.
We will now take our next question from Michael Ruzic-Gauthier of Berenberg.
Just a couple for me. One, can you give us any update on the Pneumonia Panel? I was just wondering if you had any -- heard any new updates in terms of regulatory there and how that's moving forward. And second, just so I can be clear, in terms of the commercial payers as well as Medicare contractors, so you anticipate other Medicare contractors will follow Palmetto's lead as well as other private insurers. I just ask that because if private insurers are paying across in an outpatient, it does seem strange to me that they would agree to a dual pricing environment, if you will.
No, to your point, we, the last question, we expect other Medicare, other -- of the Medicare and strategic contractors to most likely follow, but we expect, and we don't know, but this is more, we believe, it's likely to happen only for the -- only for Medicare, not all the commercial payers. Regarding pneumonia, it is -- it has been submitted for in April. Yes, so we are waiting for all the -- for the feedback from the FDA. We believe it's a nice panel that has a lot of unique values. So there are some specific, I would say, also can be quantitative, so we have good expectations, but now it's in the hands of the FDA.
We will now take our next question from Romain Zana of Exane.
Me, again. Some follow-up question. First one, on immunoassay, can you give, please, the breakdown between immuno -- between PCT, sorry, decline and the rest of the business for the quarter? And also, a question again on Palmetto, I'm sorry, but would you plan to have like another version available for -- that you could -- could become available for outpatient labs with a limited number of pathogens for IP in order it can better fit, let's say, the new regulation, or it's not in the plan?
Regarding your last question, no, no, at this stage, we keep on promoting the current value and the current syndromic reports, which we believe have the benefits, medical and economical benefits. So at this stage, no impact to develop specific panels. Maybe, Guillaume, on the PCT question?
Yes. Regarding immunoassay and the VIDAS range, which excludes the PCT test. So the trends are very similar to what we already explain in H1, very similar in Q3, but we'll restate them. So as everyone knows, we have a pretty significant competitive pressure, with the pressure on prices in the U.S., so done well on the average same price. Yet we are able to continue to grow our volume in the U.S. The net of the 2 remains negative, price, volume-wise, so in the U.S. Overall, we are growing in other regions in PCT, especially very strong growth in China. So I can state that, overall, globally, the VIDAS reagent remain positive, low, but positive revenue growth.
Okay. And the PCT decline is, especially, I mean, is it low single, mid-single, high single?
In the U.S., it's high single digit, revenues-wise. Globally, it's flat overall for the PCT test.
We will now take our next question from Del Le Louet of Societe Generale.
Yes. I just need a clarification regarding the impact of the Palmetto. Could you say again, the 2% was U.S.-driven or outpatient under managed care, or just the Palmetto?
Yes. So let me restate to you, we take the full revenues about -- the FILMARRAY revenues are about 20% of bioMérieux revenues. Of course, from this, we have to take only the U.S. Palmetto is, of course, a U.S. target. On the RP panels and of course, among these tests, only the outpatient, which we estimate with about 20% to 30% of the test being done. And then, of course, the Medicare coverage on this outpatient and even including what we say might be the medium term with -- or maybe conservative, that all Medicare jurisdiction were to potentially follow Palmetto, it remains with all these, let's say, targets, targeted population, it remains less than 2% of bioMérieux group revenues as a target with that. Okay?
Okay. Perfect. All right. Yes. A follow-up question regarding Europe situation and particularly in Western Europe. Do you have any specific commercial activity to be made in Q4 or at the beginning of next year to revamp a bit the sales growth in that countries -- in these countries? And secondly, can we have an update regarding NEPHROCHECK, where we are in the internal processing, regulatory process, everything?
No, no revamping in Europe. We're just, so far, we're having a good growth in Western Europe, when you compare also to the previous figures, 2 or 3, 4 years ago. So I think we just need 7.5%.
Talking about the Western, just Western countries.
I think this is on track with our result expectations and with our projected at this stage.
We still rival the growth in Western Europe, if we can mention, beyond, of course, the core business, which is slowly growing because we have high market share. It's a major market, which we have 2 drivers of growth. One is FILMARRAY, which expands fast in Europe, and the second one is industry, industry applications, where we are really successful, and we see the test being made more and more by our customer in the food and pharma industries.
Okay. And we're getting Astute. I think we finalized the acquisition at the beginning of Q2 this year. And also, we are on track, and today, we started to promote the sale of a solution on the platform called the Astute Meter. It's a lot of work we have to do around also, I would say, medical, education, promotion, knowing that the endgame for us is to develop the API test on the VIDAS platform. Before we have this, it's a lot about market education, medical studies and working with physicians. So it's a ramp-up, but it's -- our expectations are we'll be hiring in 3 years.
[Operator Instructions] We will now take our next question from Bill Quirk of Piper Jaffray.
Great. So 2 follow-ups, if I may. First is, can you remind us your average contract length for immunoassay and BIOFIRE? I typically think of these as 3- to 5-year deals. Can you confirm that? And then secondly, concerning your full year guidance, there wasn't a reference to it in your press release. Are we to assume that the previous guidance remains in force?
Yes, on your first question, I think, contracts, you're right to think it is yes, it's 3 years or more. Let me say it's around 3 years. You are correct. No, no, we didn't change the -- we didn't change compared to the last guidance that are based on the Q3 results. So we believe we should be in the -- we should meet the financial results that we have announced.
We will now take our next question from Philippa Gardner of Jefferies.
I just wanted to follow up on Delphine's question regarding the impact. If you were to expand that to also include the GI panel, what sort of -- what would that number then be if you were to include the GI panels in that group of patients?
We are still waiting for a potential decision from Palmetto. So we -- no, I don't think we have this in our hands at this stage. Guillaume, no?
No, no, I think we can comment then when the Palmetto potential as to the -- of GI is out, yes.
[Operator Instructions] There are currently no questions in the queue at this time.
Okay. Thank you very much to all of you for participating in this call and for your questions. And our next formal release will be on February 27, with a physical meeting and a webcast for the entire annual results for the year 2018. Thank you again to everyone. Have a great day.
Thank you.
Thank you.
This concludes the call. Thank you for your participation. You may now disconnect.