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UPDATE 2-BioMerieux lifts forecast as U.S. demand returns

Published 10/20/2009, 03:59 AM

* 2009 operating margin seen above 17 pct vs about 17 pct

* Keeps 2009 like-for-like sales forecast at 5 to 7 pct

* North America instrument sales return to growth in Q3

* Shares rise as much as 3.1 percent

(Adds conference call, analyst comments, shares)

PARIS, Oct 20 (Reuters) - French medical diagnostics company BioMerieux raised its 2009 operating margin forecast after a jump in third-quarter sales, helped by tests to detect swine flu and a recovery of demand in the U.S.

BioMerieux expects its margin before non-recurring items to be "above" instead of "about" 17 percent, as North American demand for its instruments returns to growth after laboratory investment tumbled during the credit crisis.

It still sees growth in like-for-like sales, excluding currency swings, takeovers and divestments, of between 5 and 7 percent this year, not taking into account the favourable impact on revenue of swine flu test sales, BioMerieux said.

"During the quarter, instrument sales in North America returned to growth for the first time since fourth-quarter 2007 and global sales of industrial applications rose by nearly 10 percent," Chief Executive Stephane Bancel said in a statement on Tuesday.

Third-quarter sales rose 12.8 percent, or 11.2 percent like-for-like, to 305.9 million euros ($457 million). They grew 12 percent, or 7.8 percent like-for-like, in the first nine months of the year to 895 million.

Analysts said sales growth beat consensus forecasts, lifting BioMerieux shares by as much as 3.1 percent shortly after the stock market opened. The stock was up 2.9 percent at 79.67 euros at 0706 GMT, giving it a market value of 3.14 billion euros.

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The H1N1 flu pandemic helped lift sales of tests like QuickVue. Excluding this impact, like-for-like growth was an estimated 9 percent in the third quarter and 6.7 percent over the first nine months.

Head of finance Henri Thomasson reiterated on a conference call that BioMerieux would probably announce acquisitions this year and that the focus was chiefly on the United States, India and China, where sales grew 26 percent in the first nine months.

He declined to indicate the possible size or nature of the acquisitions. Debt stood at 22 million euros on Sept. 30.

BioMerieux makes and sells tests -- re-agents, instruments or software -- for disease detection. Competitors include Qiagen , Becton Dickinson and Invitrogen.

So far this year, it has launched 11 new products, including a molecular biology test that can help improve the care of HIV+ patients or the VIDAS EBV that detects the Epstein-Barr virus, which causes infectious mononucleosis, commonly known as kissing disease.

"We continue to believe that BioMerieux's diversified business offers a source of stability in current markets," Jefferies European Healthcare Research said in a note.

"However, the shares appear fully valued and we would not buy at current levels," it said, adding that the stock was trading broadly in line with its peers, at 22 times estimated 2009 earnings per share (EPS) and 19 times 2010 EPS.

It rates BioMerieux hold with a share price target of 66 euros. ($1=.6694 Euro) (Reporting by Caroline Jacobs; Editing by James Regan/Will Waterman)

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