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PerkinElmer's (PKI) New Marketing Approval to Aid Infant Health

PerkinElmer Inc. PKI recently received the FDA’s marketing authorization for the EONIS SCID-SMA assay kit for in vitro diagnostic (IVD) use by certified laboratories for the simultaneous detection of spinal muscular atrophy (SMA) and severe combined immunodeficiency (SCID) in newborns. Other components of the platform include the EONIS DNA Extraction kit and EONIS Analysis Software.

The FDA’s marketing approval for the EONIS SCID-SMA assay kit, a part of PerkinElmer’s broader EONIS Platform, marks the first FDA-authorized assay for SMA screening in newborns in the United States. The EONIS Platform is already CE-IVD marked for use by certified laboratories in countries that accept the CE mark.

The latest regulatory clearance is likely to aid PerkinElmer in significantly solidifying its foothold in the global IVD space and boosting its Diagnostics business.

Few Words on the Platform

The EONIS Platform is a robust and flexible system that uses real-time polymerase chain reaction technology to screen for SMA and SCID. Additionally, when combined with PerkinElmer’s JANUS liquid handler, the company’s workflow allows maximum automation and efficiency. It can also be configured to a laboratory’s individual requirements and throughput.

Significance of the Approval

Per PerkinElmer, SMA is one of the leading genetic causes of infant death, whereas SCID (a group of rare inherited disorders) can also lead to life-threatening health complications if untreated. Early detection and intervention are critical for newborns affected by either condition.

Management feels that this authorization will be a major milestone for newborn screening in the United States as labs across the country will be able to access technologies that detect SMA and SCID. It will also likely assure the labs that every test meets regulatory, manufacturing and accreditation requirements.

Industry Prospects

Per a report by MarketsandMarkets, the global IVD market is anticipated to reach $113.1 billion by 2026 from $98.2 billion in 2021 at a CAGR of 2.9%. Factors like the rising elderly population and the subsequent growth in the prevalence of chronic and infectious diseases, and increasing adoption of fully automated and point-of-care instruments are likely to drive the market.

Given the market potential, the latest regulatory approval is likely to provide a significant boost to PerkinElmer’s business globally.

Recent Developments

This month, PerkinElmer announced its third-quarter 2022 results, where it reported better-than-expected pro-forma adjusted earnings per share. Per management, the company is well-poised to execute its short-term and long-term goals on the back of perseverance and team effort.

PerkinElmer, in September, launched the Cellaca PLX Image Cytometry System, a first-of-its-kind benchtop platform that enables researchers to assess multiple Critical Quality Attributes of cell samples in a single automated workflow, including cell identity, quality and quantity.

Also, in September, PerkinElmer received the FDA’s approval for the use of the T-Cell Select reagent kit for the automation of its T-SPOT.TB test workflow for IVD use by certified laboratories.

Price Performance

Shares of the company have lost 24.1% in the past year compared with the industry’s 14.5% decline and the S&P 500's 16.4% fall.

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Zacks Rank & Key Picks

Currently, PerkinElmer carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, ShockWave Medical, Inc. SWAV and McKesson Corporation MCK.

AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMN Healthcare has gained 4.9% against the industry’s 36.9% decline in the past year.

ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 23.6% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.

ShockWave Medical has gained 19.9% against the industry’s 28.6% decline over the past year.

McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.

McKesson has gained 58% against the industry’s 15.4% decline over the past year.

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