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Thermo Fisher (TMO) Gets EUA for Amplitude/TaqPath COVID-19 Kit

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Zacks Equity Research
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Thermo Fisher Scientific TMO continues to hit the headlines with its COVID-19 related developments. Recently, the company received the FDA’s Emergency Use Authorization (EUA) for its Amplitude Solution to be used with the TaqPath COVID-19 High-Throughput Combo Kit.

This combination is claimed to enable laboratories to scale up high-sensitivity polymerase chain reaction (PCR) testing.

More on Amplitude and TaqPath

The Amplitude Solution is a molecular diagnostic testing system that helps expand testing capacity by combining Thermo Fisher's extraction and real-time PCR instruments with liquid handling products from Tecan Group. According to Thermo Fisher, this modular system utilizes a high-throughput version of Thermo Fisher's Applied Biosystems TaqPath COVID-19 Combo Kit, which received EUA in March 2020, to process samples in four steps with minimal hands-on time and laboratory space requirements. The kit has multi-gene target design and updated interpretive software, which helps detect SARS-CoV-2 variants.

Thermo Fisher noted that the Amplitude Solution will also allow clinical and public health laboratories to process up to 8,000 samples in a single day with the help of minimum workforce and a secured supply of kits, reagents and consumables. The Amplitude Solution has been implemented globally including in labs in Europe and Japan.

A Well-Timed Development

Economic activities are returning to pre-pandemic levels even as emerging variants pose a threat. Though COVID-19 cases are decreasing in some areas owing to vaccine rollouts, the company continues to believe that demand for routine testing will remain strong going forward to control future outbreaks.

For population-wide testing , lab-based PCR tests are suitable, providing confidence in results, capacity to process thousands of samples a day along with consistent and reliable turnaround times.

We believe the latest EUA for the Amplitude Solution to be used with the TaqPath high-throughput is an extremely timely development by Thermo Fisher and expect it to witness accelerared market adoption.

Thermo Fisher's Progress in COVID-19 Testing

Thermo Fisher’s COVID-19 testing revenues have continued to accelerate through the pandemic period as customer demand for sample preparation, PCR solutions and viral transport media remained robust. In response to the pandemic, the company gained regulatory approval to launch the TaqPath COVID-19 combo kit in March, providing gold standard PCR-based test for customers at an unprecedented scale. The company also significantly expanded its portfolio of COVID-19-related products, including Amplitude solution for high-throughput PCR-based testing and TaqCheck PCR test for asymptomatic health surveillance. In addition, it launched a number of advanced products across base business to strengthen leading positions in analytical instruments, biosciences and bioproduction.

According to the company, its COVID-19 testing has reached an unprecedented level, creating a market-leading molecular diagnostics business in just a few months to support hundreds of millions of PCR tests around the world. The company is also actively engaged in projects to help, develop and produce vaccines and therapies. In 2020, this led to $500 million in COVID-19 vaccine therapy revenues and it expects this to increase to $1 billion in 2021.

Share Performance

Thermo Fisher has outperformed its industry in the past six months. The stock has gained 4.4% as against the industry’s 0.8% drop.

Zacks Rank and Key Picks

Thermo Fisher currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Owens & Minor, Inc. OMI BioRad Laboratories, Inc. BIO and LeMaitre Vascular, Inc. LMAT. While Owens & Minor sports a Zacks Rank #1 (Strong Buy), BioRad Laboratories and LeMaitre Vascular carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Owens & Minor has a projected long-term earnings growth rate of 15%.

BioRad Laboratories has a projected long-term earnings growth rate of 7%.

LeMaitre Vascular has an estimated long-term earnings growth rate of 10%.

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