Abaxis Inks Deal with MWI Vet - Analyst Blog
04 10월 2012 - 12:45AM
Zacks
A definitive distribution
relationship has been formed between Abaxis, Inc.
(ABAX) – a manufacturer of point-of-care blood analysis systems for
medical and veterinary markets – and MWI Veterinary Supply,
Inc. (MWIV), a worldwide distributor of animal health
products to veterinarians. Per the deal, effective January 2013,
MWI Vet, as a business partner of Abaxis, will be able to store,
market and promote the entire veterinary product line of Abaxis in
the U.S.
We note that Abaxis’ veterinary
instruments cater to a substantial part of the clinical diagnostic
requirements of veterinarians and the research marketplace. As per
recent data, one third of the North American veterinarians practice
working with Abaxis instruments for routine wellness testing and
annual check-ups.
We believe that this is a large
market with a high potential for growth. An increase in the number
of households with pets, enhanced human-animal bonding, aging pet
population, more focus on animal health or preventive care, and
advancements in pharmaceuticals and diagnostic testing drive
increased spending, which in turn is favorable for the company.
Abaxis is performing well in its
veterinary division with an expanded product line and a growing
direct sales force. The company also intends to introduce more
rapid assay of products, which would boost the veterinary revenue.
In the previous month, the company launched its new Kidney Profile
Plus panel for the treatment of critical and chronic renal diseases
in animals, especially in canine, feline and equine species.
Alongside, Abaxis Veterinary
Reference Laboratories’ (“AVRL”) performance in the third full
quarter of operations complemented growth of the company’s
veterinary segment. Abaxis is optimistic about its consistent
performance in the veterinary market and expects to maintain this
growth momentum in the upcoming quarters.
On the other hand, in a highly
fragmented animal health products distribution market, MWI Vet is
currently focused on preserving long-term customer relationships as
well as building new ones. In August 2012, the company revised its
distribution relationship with IDEXX Laboratories,
Inc. (IDXX), per which MWI Vet, as a business partner of
IDEXX, will also be able to distribute other competitive diagnostic
products.
Other than that, MWI Vet's long
term distribution agreements include a 13-year contract with
Banfield, the largest private veterinary practice in the U.S. The
company also maintains a strong relationship with Feeders'
Advantage, a buying group comprising several large cattle feeders
in the U.S.
We believe that despite the
veterinary market being highly competitive, strong bonding between
vendors like Abaxis and distributors like MWI Vet will enable both
the companies to achieve robust growth. The companies believe this
new venture to significantly add synergies to their individual
businesses. According to Abaxis, the new strategic partnership with
MWI Vet will enable it to further penetrate the western U.S. animal
health market, where the company has limited distribution.
Currently, Abaxis and MWI Vet carry a Zacks #3 Rank (short-term
‘Hold’ rating). Over the long term, we are Neutral on both the
companies.
ABAXIS INC (ABAX): Free Stock Analysis Report
IDEXX LABS INC (IDXX): Free Stock Analysis Report
MWI VET SUPPLY (MWIV): Free Stock Analysis Report
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Abaxis, Inc. (delisted) (NASDAQ:ABAX)
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Abaxis, Inc. (delisted) (NASDAQ:ABAX)
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