Recommendations » UK

Axis-Shield (LON:ASD) report: Update

Contributed by Daniel Stewart & Company

By Daniel Stewart & Co

- On October 28th Axis-Shield issued an IMS for the 17 week period ending 27 October 2010.

- In the Point-of-Care Division, the company indicated that it remains on track to reach its key milestone of delivering 10,000 Afinion system placements by the end of the year, with continuing good cartridge utilisation and improving production efficiency in its manufacturing operations.

- The group also indicated that it is on schedule with the Afinion menu extension programme, which will see the inclusion of a lipid panel and a high sensitivity CRP (hsCRP) test for use in cardiovascular risk assessment in 2011 and 2012 respectively.

- However, NycoCard revenues for the year to date continue to be affected by the loss of CRP sales due to the previous winter's weak influenza season—that was generally observed by companies in the influenza test sector.

- The pipeline of novel tests in the company's Laboratory Division is developing well, although the usual commercialisation strategy on the laboratory platforms of Axis-Shield's global partners may be affected by some tightening of their external development expenditure coupled with the ongoing sector consolidation and resultant system rationalisation.

- Finally, the group’s Direct Distribution Division has continued to operate well in Switzerland, however, in Norway, hospital budgets continue to be constrained.

- This trading statement was broadly in line with our expectations, and as such, it had no impact on our forecasts and 279p TP—indicating a HOLD recommendation.