This deal may not garner as many headlines as the last — Inverness recently emerged victorious in a heated bidding ward with Beckman Coulter (BEC) for Biosite (BSTE) — but it’s significant because it indicates a strategy by Inverness to strengthen its position in the cardiac testing market (Biosite, among other things, makes a test for heart failure).
Cholestech makes a range of diagnostics for measuring cholesterol, diabetes and heart disease. The cash-flow positive company currently has two products on the market: The LDX platform provides a complete lipid profile to assess heart-disease risk and blood cholesterol, and the GDX measures hemoglobin to monitor diabetic drug therapies and diet. With a large installed base, Cholestech has continually improved margins by increasing disposable prices.
In addition, Cholestech is partnered with a Swedish hematology company to develop an instrument to measure Complete Blood Count [CBC], the most commonly ordered test by physicians’ offices. In 2003, the last year for which data is available, 86 million CBC tests were ordered and Medicare spent $296 million on CBC tests.
Cholestech’s tests will join Inverness’ existing stable of cardiac products, which include the following: IMA, a biomarker for the assessment of myocardial ischemia; the Clearview Simplify D-dimer, a rapid, two-step test for the detection of D-dimer, which aids in the diagnosis of deep vein thrombosis and pulmonary embolism; and Clearview Troponin I, a rapid, one-step qualitative test for the detection of cardiac Troponin I for screening patients suffering from chest pain.
IMA 1-yr chart:
