OraSure Technologies, Inc. (OSUR), Abbott Laboratories (ABT), Alere Inc (ALR): A Closer Look at the Market for Home and Lab HIV Tests

In 2009, Abbott Laboratories (NYSE:ABT) developed a new testing system, Abbott Prism HIV O Plus, a fully automated test to screen blood and organ donations for antibodies reacting to HIV. The system — which can detect HIV-1, HIV-2, and the subsets of HIV-1 — runs up to 160 samples per hour, dramatically increasing the efficiency of laboratory tests and boosting the rate at which patients can receive blood and organ donations. Abbott Laboratories (NYSE:ABT)’s system can also screen for hepatitis B, hepatitis C, and the human T-lymphotropic virus.

A new single-step test to keep an eye on

A smaller company, Alere Inc (NYSE:ALR), recently received FDA approval for its new HIV test, Determine HIV-1/2 Ag/Ab, which is the first approved test that can detect both the HIV-1 antigen and HIV-1/2 antibodies in a single test. What separates Alere Inc (NYSE:ALR)’s test from those made by Bayer AG (ADR) (OTCBB:BAYRY) and Abbott Laboratories (NYSE:ABT) is its ability to immediately detect the HIV-antigen, which allows the virus to be detected earlier, in a single step.

Older HIV tests only search for the associated antibodies, which are an immune response to the antigens that are only detectable after the virus advances. Alere Inc (NYSE:ALR)’s revolutionary new test complements the company’s core business of diagnosis tools, which include home pregnancy tests and fertility monitors. Sales of Alere’s diabetes tests also surged 100% year-on-year last quarter.

In the second quarter, Alere Inc (NYSE:ALR) earned $0.64 per share on revenue of $764 million. Analysts had only expected the company to earn $0.48 per share on revenue of $720.3 million.

A Foolish final thought

These new tests, both at home and in the lab, are encouraging signs that the outlook for HIV, with 50,000 new cases reported annually in the United States, looks a bit brighter than it did several decades ago. Home tests from OraSure Technologies, Inc. (NASDAQ:OSUR) and earlier detection tests from Alere Inc (NYSE:ALR) are increasing the likelihood of identifying more HIV cases before they spread.

Although Alere and OraSure are nowhere as fundamentally sound as HIV treatment biotechs like Gilead Sciences and GlaxoSmithKline, they have a lot of potential upside for investors with a higher tolerance for risk and volatility.

The article A Closer Look at the Market for Home and Lab HIV Tests originally appeared on Fool.com and is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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