FDA Approves Alere's HIV Test

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Alere Inc. (ALR) has won the U.S. Food and Drug Administration (:FDA) clearance for its Alere Determine HIV 1/2 Ag/Ab Combo test used to identify HIV-1 p24 antigen and antibodies to HIV-1/HIV-2. The company’s new offering is the first and only FDA-approved test in the market. This rapid point-of-care test is superior to the second and third generation antibody-only tests and can detect HIV more effectively.

HIV, a fatal health issue, is affecting the U.S. as well as other regions. According to the Centers of Disease Control and Prevention (:CDC), about 18% of the 1.4 million Americans with HIV are undiagnosed. The center also stated that approximately 47,500 new individuals have been infected with the virus in 2010.

Mass.-based Alere aims to be the leader in rapid ‘near-patient’ or point-of-care testing (:POCT) or diagnostics. The FDA approval of Alere’s latest point-of-care test is a significant step toward the eradication of HIV from the U.S., as it helps to diagnose the disease at an early stage and can assist in breaking the infection cycle. The FDA has approved the product to be sold as a CLIA (Clinical Laboratory Improvement Amendments) moderately complex medical device.

Recently, the company received a FDA approval for its Alere MobileLink. The new connected device technology allows quick data delivery from patient’s home settings to their healthcare provider. The Alere MobileLink is already CE-Marked and will be rolled out in Europe and the U.S. toward the back end of this year.

ALR has a Zacks Rank #1 (Strong Buy). On Jul 31, the company reported adjusted earnings per share of 59 cents for the second quarter of 2013. The results were up 40.5% on a year-over-year basis, and beat the Zacks Consensus Estimate by a significant margin of 19 cents. Net revenue grew 9.1% to $764.0 million, exceeding the Zacks Consensus Estimate of $722 million.

Other medical stocks such as Hanger (HGR), Cyberonics (CYBX) and Thoratec (THOR) are worth considering. All these stocks carry a Zacks Rank #1 (Strong Buy).

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