Luminex (LMNX) Rallies On FDA Nod For Aries M1 System

Luminex Corp. (NASDAQ:LMNX) recently announced FDA approval for the Aries M1 system. Notably, the share price of Luminex gained almost 3% to close at $20.92, following the go-ahead.

The system has also gained a CE-IV(D) status under the European Directive on In-Vitro Diagnostic Medical Devices. Aries M1 system will be unveiled by the end of July this year.

Notably, M1 systems are specifically designed for seamless operations in limited service small satellite laboratories. The system provides a highly integrated platform to perform PCR Assays (Polymerase Chain Reaction tests) which delivers accurate results and increased lab efficiency.

The M1 system is a simplified version of Luminex’s well-known Aries system. It has noteworthy features like intuitive system interface, STAT or batch testing and true walkaway capability that enhance the utility of smaller labs.

Aries M1 functions in three major stages – extraction, amplification and detection of nucleic acids from a broad array of samples. Notably, the system can process up to six different samples and work upon one to six assays at a single time. We believe Aries M1 is a minimally erroneous platform in the space as the system involves least technical intervention while delivering final results.

Meanwhile, the green signal from the FDA has expanded Luminex’s market reach, as the company now owns both high-plex and low-plex ‘molecular diagnostic testing’ platforms. In fact, the introduction of M1 will boost Luminex’s penetration in the molecular diagnostic market, which is estimated to reach a worth of $9,333.8 million by 2020, as per Markets & Markets.

Following the above market trends, we believe that Aries M1 is likely to play a key role in the growth trajectory of the company. Meanwhile, Luminex expects a contribution of $2-$3 million in its revenue from Aries system in fiscal 2016.

Zacks Rank & Stocks to Consider

Luminex carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same space include Abiomed Inc. (NASDAQ:ABMD) , Mesa Laboratories Inc. (NASDAQ:MLAB) and Check-cap Ltd. (NASDAQ:CHEK) . Notably, ABIOMED and Mesa Labs sport a Zacks Rank #1 (Strong Buy) while Check-cap carries a Zacks Rank #2 (Buy).