Luminex Corporation (NASDAQ:LMNX) Q3 2016 Earnings Conference Call - Final Transcript

Oct 31, 2016 • 04:30 pm ET

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Luminex Corporation (NASDAQ:LMNX) Q3 2016 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Sung Ji Nam, Avondale Partners.

Analyst
Sung Ji Nam

I'm sorry I missed this, but did you guys break out the customer placement number for Verigene Systems as well as Aries?

Executive
Harriss Currie

We did not. But what we mentioned, Sung Ji, was that we were well on our way to meeting that targeted Aries placement number of around 100 by year-end. And Verigene, we didn't break out. But the Verigene System revenue number and placement number, such a small component of our total overall system number that it -- although I think it could have been previously really important to models, we think that it's a lot less important today.

Analyst
Sung Ji Nam

And then in terms of the Verigene System, was there a particular panel that was stronger than the others, or was it pretty much stronger across the board as far as the -- ?

Executive
Homi Shamir

Sung Ji, it's Homi. It was across the board, all of them. But as I mentioned, we have seen triple-digit growth in -- not in the blood culture, mainly in the GI and the LTP assay, very, very nice growth and very encouraging growth. But it was very strong across all the assay portfolio.

Analyst
Sung Ji Nam

If I could squeeze one more in. In terms of your pharmacogenomic business, could you maybe talk about what the outlook is there? I know that you commented that's not necessarily kind of a core focus going forward potentially. But was curious as to the few customers that were -- where you were seeing some headwinds in the recent quarters?

Executive
Harriss Currie

Yes, So what we're finding, Sung Ji, is that our technology is very good at doing genetic testing. However, it's probably not the best at doing genetic testing. And as alternative methodologies for pharmacogenomic testing are developed, we're finding that the customers, if price is right for them, are displaying a tendency to shift over to those other technologies.

And so as a result, our business itself is healthy. But we believe that over the next five years it is likely that the level of business there will decline. And as a result, that's one of the reasons for a focus on other areas, primarily infectious disease and our partnership business, which both performed very well this quarter. We're going to focus on the places where we can actually make some progress.

Executive
Homi Shamir

Yes, let me say, Sung Ji, it's a (inaudible) we don't put R&D, because we have the products and it's also the regulatory things. But, for example, if a customer want to buy and in direct price, we sell to them. But we are not going to start selling the product unless making less margin to our overall portfolio. And on the other hand, (inaudible) sales force which from the beginning, let's say, is becoming a combined sales force to focus on the sample to answer solution, because that's the bigger future for us than the pharmacogenomic.

Operator
operator

Tycho Peterson, JPMorgan.

Analyst
Unidentified Participant

Hey, guys. It is Steve on for Tycho. Thanks for taking my question. You