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Luminex shares rise after analyst upgrade

Shares of Luminex Corp., which makes testing systems for biotechnology companies, climbed Thursday after a UBS analyst upgraded the stock and said its stock price has been driven down too far.

THE SPARK: As of Wednesday, the Austin, Texas, company's stock had dropped about 13 percent since it closed 2011 at $21.23 per share.

The stock had topped $24 in June and early July, but the price plunged after Luminex announced on July 9 that it was buying molecular diagnostics company GenturaDx for $50 million in cash. Luminex said that the transaction may also include additional payments if privately held, Hayward, Calif.-based GenturaDx reaches certain future milestones or hits specific product revenue targets.

Luminex said GenturaDx is in late-stage development of a real-time single-use cassette system that will make rapid molecular diagnostics accessible to hospitals and patients globally.

The buyout is expected to add about $6 million to Luminex's 2012 operating expenses, not counting acquisition-related expenses.

THE ANALYSIS: Analyst Daniel Arias upgraded Luminex shares to "Buy" from "Neutral" and reduced a price target on the stock to $22 from $25.

Arias said in a Thursday morning research note the shares now trade at discounted levels to both peers and historical levels. He said the shares have been oversold due to the GenturaDx deal, competitive fears and a critical Los Angeles Times report about the airborne pathogen early warning system known as BioWatch, which uses some technology on which Luminex collaborated.

SHARE ACTION: Up 93 cents, or 5 percent, to $19.34 in afternoon trading while the Nasdaq exchange fell slightly.

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