OraSure jumps after $143M Oragene Dx devices deal

Shares of OraSure Technologies (OSUR) are on the rise after the company announced that its subsidiary DNAG Genotek has entered into a $143M agreement for the supply of its Oragene Dx devides to an undisclosed customer. Commenting on the news, CL King analyst David Westenberg told investors that he believes the company is likely 23andme. ORAGENE DX DEVICES DEAL: OraSure Technologies announced today that its subsidiary, DNAG Genotek, a leading provider of sample collection kits and end-to-end services for human genomics, microbiome and infectious disease, has entered into a $143M agreement for the supply of its Oragene Dx devices to a leading consumer genomics customer. The agreement provides for the supply of product over several years with minimum annual purchases by the customer. Oragene Dx is the first and only FDA 510k cleared saliva DNA collection and stabilization device. It is an all-in-one system for easy and reliable collection of high quality samples. The device allows for ambient temperature transportation and storage and provides a liquid sample to enable high throughput automation in a laboratory. DEAL LIKELY WITH 23ANDME: In a research note to investors, CL King analyst David Westenberg argued that the company is likely 23andme, while noting that he views it as a positive. Further, the analyst pointed out that the deal indicates the initial $20M agreement it signed with the company back in April has been fulfilled significantly earlier than expected. Westenberg believes Orasure's exposure to the consumer genomics market provides significant upside to estimates. The analyst reiterated a Buy rating and a $19 price target on OraSure's shares. PRICE ACTION: In afternoon trading, shares of OraSure have jumped about 17% to $16.37.