Medical testing kit company to expand after successful sales

Oct 6 2009 By Iain laing, The Journal

MEDICAL testing kit company Immunodiagnostic Systems plans to win new markets around the world after seeing its sales soar by more than 50% in the first of the year.

The South Tyneside company with 220 staff has grown into one of the world’s specialists in producing kits and machines which can test for diseases selling to hospitals and companies in Europe and the US.

It has seen revenues for the first half of the year jump 56% to £16.9m and its broker Brewin Dolphin estimates they will double to £33.9m next year and rise to £42.9m in 2011.

The 32-year-old company has seen rapid growth since floating on the Alternative Investment Market in 2004 and buying a French manufacturer two years ago has enabled it to move into automated rather than manual testing, which opened up a much bigger market.

Managing director Dr Roger Duggan said: "There are huge markets for large corporations in America and for hospitals in Europe. Automated testing is on a far larger scale and there is a lot of potential.

"We used to sell manual kits into regional laboratories and hospitals but now we are able to sell machines into reference laboratories than can take 10-15,000 tests."

The company already has 140 staff spread across the US and mainland Europe, as well as the 80 at its Boldon headquarters, and is looking to recruit more engineers as it wins new customers for its automatic testing equipment.

It is now moving into selling in Australia and Asia and is considering opening an office in Canada where it sees another strong market.

Dr Duggan said: "Our strength is that we are specialised in certain diseases which the bigger companies are not. We are very specialised in looking at bone and skeletal disorders such as osteoporosis.

"This is a growth area partly because of the ageing population and partly because of the high level of research going on. We are also specialised at testing for diseases caused by vitamin D deficiency. Research is showing a growing number of disorders including hypertension and cancer which are linked to it.

"We are expanding the number of countries we sell into. The UK only accounts for about 10% of our sales now. And we are also growing our range of products we sell. We are moving into testing for hypertension and also over the next two or three years we will begin working on tests for kidney diseases."

Broker Brewin Dolphin said it had upgraded its forecast for the second half of this year by 20% and its two year forecast up by 7.6% due to the company’s overseas success and better than expected sales of its automated testing equipment.

In August, German investor Forum Venture Capital purchased 2,283,300 shares in IDS and increased its stake to 24.6% to back the firm’s growth plans.