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Sunday, December 5, 2021

Diasorin, CEO Rosa: “Our diagnostics between America and China can empty hospitals”

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Diasorin, l

We are a bet on the future and innovation, with an Italian hi-tech heart. And the United States is the only market that pays a premium price for innovative products and therefore strategic for us. Even if it does not exhaust the discussion. This DiaSorin, explains Carlo Rosa, and in doing so indicates the trends of the long-term strategy of the diagnostics multinational. The best stock of Piazza Affari in 2020 has just presented an excellent balance sheet, for unanimous recognition, but it suffers from the volatility of the market and that of a stock that in recent weeks has been chased by brokers and bankers in the name of: It can be done !, DiaSorin can afford the big deal !. This at a time when diagnostics, for the obvious considerations related to the pandemic, is worth gold. For example, Roche last week announced an amicable takeover bid on California-based GenMark Diagnostics with a 43% premium and an overall valuation of $ 1.8 billion (€ 1.5 billion) of a company, listed on the Nasdaq, which in molecular diagnostics will make just over $ 170 million in revenues, albeit with a jump of over 75% on the previous year.

What is said on the stock exchange

In the case of DiaSorin, the situation and the numbers are different. Bloomberg’s indiscretions that see her in the running for the Texan Luminex date back to the end of last month. It would not be the only one, other players would seem interested. Luminex, based in Austin, a group that develops and markets molecular diagnostic tests based on multiplex technology, has a market capitalization of $ 1.5 billion, 2020 revenues expected to be just under 500 million and gross margins of just under of one hundred million.

With the indiscretion, open heaven. Analysts and banks, business and non-business, from Banca Imi to Morgan Stanley, from Mediobanca to Equita, have practiced extensively on the combine coming to the conclusion that there would be sense and profit, from the point of view of markets and technology. And it could be done in a number of ways, by card or by cash and debit. C de Sass, for example, recalled that DiaSorin has already stated that mergers and acquisitions should be an important growth driver in the coming months, when the effect of Covid-19 will wear off, leaving the company with a lot of liquidity to invest. .

But the lack of visibility on the evolution of the pandemic makes the picture complex and difficult to face, even in the wake of objective success.

In the first half of 2021 we will make + 45%

RWe wind up the tape and alternate with the words of the CEO of the Italian group who is also a shareholder alongside the Denegri family. The multinational from Saluggia exited in sprint from 2020 with fourth quarter results better than consensus estimates and presented a year with gross revenues up by about 25%, over 881 million, gross margins up by more than 39%, above 385 million , a net result of 248.3 million, an increase of 41.3 percent. In addition, the group has presented a six-month guidance (only !, exclaimed the market) which foresees a trend growth of 40% in revenues and 45% in gross margins. Alongside these numbers, to keep in mind the rumors of the stock market, we must add the final figure which shows a net cash of over 305 million.

Diasorin, CEO Rosa:

But prudence does not always pay off and on the stock market the stock was punished for a couple of sessions, only to be recovered. however, a bitter taste remained, of an unclear thing. Why does DiaSorin only provide forecasts for six months? Because we are serious – Rosa replies – and the end of the emergency is not a fact of which we, like no one else in the world, have availability. And therefore the market’s questions about the long-term sustainability of certain numbers are destined to be still unanswered, despite all the clarifications.

DiaSorin, for example, expects to stabilize the sales volumes of molecular tests for Covid 19 at one million units per month, without any pressure on prices at least immediately, but with a decrease of about 10% in the second half of the year. . The group is waiting for the emergency use authorization of the American FDA for its antigen tests against Covid and thinks that this year the tests not related to Covid will be able to recover the levels of 2019. Rosa, in the meeting with over 130 investors who crowded the call after the balance sheet reaffirmed the prudent interest in any merger & acquisition operations. It is superfluous to renew the request on the last point today, if not to obtain a concise no comment.

Diagnostics empties hospitals

Si can try to get around it by following the thread of geopolitical reasoning. Which brings us back to the bet on the future and innovation. DiaSorin is well present on the American market and aims to seize the only positive inheritance of the pandemic emergency, that is the concrete and tangible possibility of leveraging the prevention offered by diagnostics in a massive way. A quantum leap for the health systems of the West. And in the future, the decentralization of diagnostics will be the key to emptying hospitals.

America, first of all, therefore, a system that overturned the situation in nine months and that, on the side of industry, despite a thousand difficulties, made it possible to distribute the advantages and efficiencies along the entire value chain.

What will we do in Shanghai

Beyond America, for the lifescience industry, Rosa explains, there is China. China not just China and that would be enough. an area of ​​influence. But they also played the China First and therefore you have to be there, you can’t be an importer, you can’t leave Saluggia or even Minneapolis. Yet one of the large markets already today with a middle class that spends and a lot, for example for prenatal diagnoses, since the only child from diktat that had become a standard. Plus they start to have the same diseases as us old Westerners, they are hypertensive and obese. And they are treated in a system that has no general practitioners, while 600 million citizens turn to the national health system. And that system needs machines and diagnostics.

DiaSorin was already in China, but the novelty, explains Rosa, is the new production and research plant in Shanghai which will be up and running from mid-2022. A new start, because the challenge of the next ten years is to be technological leaders in the two main markets, the American one for spending levels and margins, the Chinese one for volumes and therefore revenues. We can do it.


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