NEW YORK (AP) -- Shares of OraSure Technologies climbed Thursday as analysts predicted stronger sales of its diagnostic tests.
THE SPARK: Two analysts said OraSure, which makes a test for the hepatitis C virus, will benefit from the launches of new hepatitis C drugs in 2014 and said sales of its at-home HIV test could improve.
Raymond James analyst Nicholas Jansen upgraded OraSure shares to "Outperform" from "Market Perform" and set a price target of $8 per share. He said early sales of the hepatitis C test have been disappointing, but expanded health insurance coverage, new insurance policies, and the launch of new drugs like Gilead Sciences' sofosbuvir will help.
Jansen said the company's DNA Genotek unit has experienced strong growth and OraSure is expanding its manufacturing capacity.
DNA Genotek makes products that are used in the collection and preparation of oral fluid samples. They can be used in DNA testing.
Janney Capital Markets analyst Spencer Nam kept a "Buy" rating with a price target of $10 per share. He said OraSure is working to better target sales of its HIV test, which could help its growth in the fourth quarter and subsequent quarters. The Bethlehem, Pa., company expects to report $24 million to $24.5 million in total revenue in the third quarter and Nam said the company's fourth-quarter estimates should include better growth.
Analysts are forecasting revenue of $24.2 million in the third quarter and $25.3 million in the fourth quarter, according to FactSet.
THE BIG PICTURE: OraSure Technologies Inc. launched its OraQuick In-Home HIV test in October. OraSure's test does not require samples to be sent to a lab and it is designed to return a result in 40 minutes. The company also makes test for other infectious diseases, tests that detect drugs that are abused, and cryosurgery systems.
OraSure said its revenue grew 4 percent to $45.5 million in the first half of 2013.
SHARE ACTION: Shares of OraSure gained 33 cents, or 5.7 percent, to $6.09 in morning trading. The shares have climbed 48.5 percent since the end of June, but even with those gains they have lost almost half their value over the last 12 months.