EUR 850.00 For Business Accounts Only

Morningstar | FilmArray Will Remain a Key Growth Driver for BioMerieux, but Competition Should Increase

We believe BioMerieux's niche leadership position in clinical and industrial microbiology, solid recurring revenue base, and expanding global presence bode well for this diagnostic player.BioMerieux has been particularly successful in clinical microbiology, the company's core division. The firm’s long history of microbiology knowledge and product innovation has solidified BioMerieux’s dominance in this market segment. The clinical microbiology market is relatively mature, in our view, with expected industry growth rates around 3%-6% annually. However, greater demand for industrial applications in the food industry, more automated workflow processes, and tools to reduce hospital infections could spur new growth avenues for the company.With the help of acquisitions, BioMerieux has pushed into new geographies and market segments--including industrial microbiology and molecular biology--in search of growth opportunities, but challenges abound in these areas. The 2014 purchase of BioFire and its multiplex PCR FilmArray product line has been a significant success story for BioMerieux by boosting growth and enhancing its competitive position in the quick turnaround, syndromic testing portion of the molecular diagnostics market. While FilmArray has a strong lead, we expect this market to have new entrants and become more competitive over time. After acquiring AES Laboratoire in 2011, BioMerieux became a major player in industrial microbiology (primarily for bacterial monitoring within the food industry) along with 3M, but BioMerieux mostly remains a niche player focused on urgent test needs among low-volume, small, independent labs and hospitals. Although the potential growth opportunity remains attractive in many of BioMerieux's niche areas, the company faces a crowded field of established competitors like Roche, Siemens, Danaher, and Qiagen. Powerful opponents, pricing pressure, and emerging new technologies (particularly genome sequencing) could pose future challenges. Over the past several years, BioMerieux has also invested heavily in local subsidiaries and partnerships to extend the company's brand to new geographies and solidify customer relationships.