Biosite's Robust Health

It Doubled In Under A Year
Biosite (BSTE ) is a little-known diagnostics outfit whose shares are dynamite -- blasting from 27 last February to 59.07 on Jan. 26. "It was our top performer in 2004," says Rodney Hathaway of Heartland Advisors, which has yet to sell any of its shares, bought at 30. Biosite's tests are used in 50% of U.S. hospitals -- and overseas -- mainly to detect heart attacks. Biosite "serves a niche market with strong growth prospects," says Hathaway. Driving the growth is Biosite's 70% share of the total market for so-called BNP blood tests for heart failure. Results are available within minutes. Despite the stock's huge gains, he adds, it has room to run -- to more than 70 in a year. He sees the company earning $2.34 a share in 2004, $2.50 in 2005, and $3.20 in 2006, up from 2003's $1.50. A fresh catalyst for Biosite: a new test, Triage Stroke Panel, to be used along with CT scans for quick diagnosis of cerebral ischemia, or strokes. Biosite has asked for Food & Drug Administration approval to market it. The FDA could rule on the application by yearend. Hathaway says there is an unmet need for a fast and effective test for strokes. Theodore Huber of Wachovia Securities (WB ), noting Biosite's "healthy product pipeline and strong prospects to beat earnings estimates in 2005," rates the stock "outperform."

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial

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