Life's New Kit for Eggs - Analyst Blog

Recently, Life Technologies Corporation (LIFE) has received approval from the US Food and Drug Administration (FDA) for TaqMan, Salmonella enteritidis (SE) detection kit which has been developed in collaboration with the University of Pennsylvania School of Veterinary Medicine. The PCR (polymerase chain reaction) based kit is able to test the presence of SE in poultry eggs much faster. While the traditional method takes approximately 10 days to provide results, this test can provide results within 27 hours. The FDA approved the kit as it met all the standards with respect to accuracy, precision and sensitivity that were enjoyed with the traditional method as well.

As per reports, the SE outbreak in the US in August 2010 led to recall of more than 550 million eggs affecting about 26 states leading to a 40% price hike in the wholesale egg market. Consequently, the norms necessitate testing for SE to ensure safety of the products. In this regard, Life Technologies' TaqMan test will be beneficial to egg producers with respect to reduced time while maintaining quality.

Life Technologies earns revenues from three divisions – Molecular Biology Systems (MBS), Genetic Systems (GS) and Cell Systems (CS). While the former includes molecular biology based technologies such as basic and real-time PCR, RNAi, DNA synthesis, thermo-cycler instrumentation, cloning and protein expression profiling and protein analysis; the GS division includes sequencing systems and reagents as well as reagent kits developed specifically for applied markets, such as forensics, food safety and pharmaceutical quality monitoring. The CS division includes all product lines used in the study of cell function, including cell culture media and sera, stem cells and related tools, cellular imaging products, antibodies, drug discovery services, and cell therapy related products.

Recommendation

Life Technologies enjoys a strong position in the life sciences market and we believe robust performance from its core business along with new product launches will help drive revenues going forward. Meanwhile, lower expenses and cost cutting along with increased revenues should help drive the bottom line. Additionally, the company is increasing its focus on emerging markets, which bode well for long-term growth. We are also impressed with Life Technologies' focus on stem cell research which holds immense potential in the long term.

We are currently ‘Neutral' on Life Technologies which is also supported by the Zacks # 3 Rank (hold).