BIO-REFERENCE LABS REPORTS STRONG GROWTH IN REVENUE & EARNINGS
LIKE MOST PUBLIC LAB COMPANIES, the financial news continues to be good at Bio-Reference Laboratories, Inc., based in Elmwood Park, NJ.
For second quarter ending April 30, 2001, the lab reported revenues of $19.8 million, an increase of 22% over revenues of $16.3 million for same quarter last year. Bio-Reference also posted a profit of $502,000, the largest quarterly profit in the lab company’s history.
Unlike most of its commercial lab competitors, Bio-Reference Labs is devoting a significant amount of resources to supplement its lab testing services with added-value clinical information services built around lab test data.
Bio-Reference believes its on-going business relationship with physician office clients is the prime asset which must be protected and developed. To that end, Bio-Reference has developed several business strategies. It has created a revenue-generating physicians’ Web portal that it now offers to other regional laboratories. Called Careevolve.com, this portal allows physicians to access lab test results, check patient eligibility, electronically file claims and access CME education. It also supports a variety of other relevant services.
Another strategic initiative is PSIMedica. This business division offers a product that allows managed care plans to analyze quality of healthcare outcomes, cost of care, and other variables. It combines quantitative and qualitative laboratory test data with medical claims information, and prescriptions. XCARE.net recently agreed to provide PSIMedica to its customers.
Bio-Reference Labs also offers specialized lab testing services to prisons and jails. It holds several comprehensive contracts for prisons and jails in New York State. It recently inked a contract to provide such services to prisons in Eastern Pennsylvania.
Partly as a result of these multiple business strategies, Bio-Reference Laboratories gained a new investor and board member. In May, Morton Topfer, recently a Co-CEO and Vice Chairman of Dell Computer, purchased 1.5 million shares of Bio-Reference stock. Prior to Dell, Topfer worked at Motorola for 23 years and played a key role in its Land Products Sector and paging business, both multi-billion dollar divisions of Motorola.
SUNQUEST INFO SYSTEMS ACQUIRED BY BRITISH SOFTWARE COMPANY
FOLLOWING MANY MONTHS of persistent rumors, Sunquest Information Systems, Inc. announced, on June 25, that it would be acquired by Misys PLC, a software company based in Great Britain.
Misys offered to buy all outstanding Sunquest shares at $24, a 63% premium over its trading price of $14.74 per share. Misys will pay approximately $404 million to acquire Sunquest. Both companies expect the deal to close within 30 days.
Misys offers software products in banking, healthcare, and insurance. In the United States, it already owns Medic, Inc., a physician-services software company with 18,000 sites serving 85,000 physicians. After the acquisition, Sunquest will continue to maintain its corporate headquarters in Tucson, Arizona.
The arrival of Misys in the American healthcare marketplace marks the third time in the past year that a foreign company has acquired companies or introduced products that include LIS software.
Last year, Siemens purchased Shared Medical Systems, Inc. (SMS). Since the acquisition, Siemens has expanded its market presence on the American healthcare scene. Also during 2000, Sysmex, Inc. introduced a new LIS product developed in Europe. It is called Molis and operates as a separate business from Tucson.
The acquisition of Sunquest by Misys demonstrates an example of further consolidation among leading healthcare information system vendors. The new twist to this consolidation trend is that foreign companies are using acquisitions to gain a foothold in the United States market.
BECKMAN COULTER ANNOUNCES $200 MILLION BOND SALE—THEN PULLS PLUG ON OFFERING
IT WAS A SERIES OF MIXED MESSAGES from Beckman Coulter Inc., manufacturer of diagnostic and research testing instruments.
First the company announced that it would sell $200 million of 20-year zero coupon convertible bonds. The market for convertible bonds, which earn income and can be converted into stock, has been red-hot since the beginning of the year. Beckman Coulter stated it would use the money to retire existing debt.
Following that announcement, Moody’s Investor Service released its rating on the Beckman Coulter offer. The rating was Baa3. At the same time, Moody’s upgraded its ratings for the company’s existing debt and withdrew its rating on the senior implied and senior unsecured debt issues of Beckman Coulter. This moved the company’s debt ratings from the “junk” category to the “investment” category.
The day after the positive news about the upgrade by Moody’s, Beckman Coulter announced that it was cancelling the $200 million bond sale. This caught the investment community by surprise, since it is unusual for a company to pull this type of offering, particularly following an upgrade of its debt ratings.
Since its acquisition of Coulter Corporation in 1999, Beckman Coulter has carried a relatively high level of debt. Since 1999, it has paid down its debt by $129 million. It wants to lower its debt to equity ratio to a 1:1 ratio.
VYSIS CLOSES IN ON DNA-BASED TEST FOR BLADDER CANCER
AN ILLINOIS-BASED COMPANY is using FISH technology to create a diagnostic test for bladder cancer.
Vysis, Inc., located in Downer’s Grove, Illinois, expects FDA permission to market its “UroVysion” test sometime this summer. The test is a DNA-based urine test for bladder cancer that has demonstrated improved sensitivity over existing tests. It is also capable of detecting the disease as much as six months earlier than other methodologies.
UroVysion uses FISH (flourescence in situ hybridization) to check for the presence of four specific chromosomal abnormalities deemed characteristic of bladder cancer. Vysis also markets a test for breast cancer, called “PathVysion”, and is developing tests for certain genetic birth defects, leukemia, lung, and cervical cancers.