Neogen Corporation NEOG recently launched Reveal Q+ — a faster and easier test to detect aflatoxin M1. For investors note, afltoxin M1 is a carcinogenic metabolite of aflatoxin B1. It is a known cancer-causing toxin produced in the rumen of dairy cattle, a concern for the global dairy industry.

Notably, the new test integrated with Neogen's Raptor Integrated Analysis Platform controls the timing, temperature and reading of the test strip and enables testers to simply add sample and walk away.

With the recent launch, Neogen aims to strengthen its Food Safety business on a global scale.

Significance of the Launch

Neogen’s new Revel Q+ is intended to detect as little as 150 ppt of the Aflatoxin M1 in milk samples within few minutes. The new test can detect aflatoxin M1 in milk within a range of 150-600 ppt. In many countries, including the United States and Brazil, the available tests have a regulatory limit of 500 ppt for aflatoxin M1. This will facilitate dairy processors to simplify screening of Aflatoxin M1 in raw milk and dairy products.

Reveal Q+ is integrated with Raptor system and simplifies the testing process. With this launch, dairy processors can simultaneously test one sample for the presence of aflatoxin M1 and classes of dairy antibiotics like beta-lactams and tetracyclines. Additionally, the raptor system safeguards the integrity and consistency of testing data by processing and analyzing results without additional operator input.

Notable Developments in Food Safety

In January 2021, Neogen acquired Ireland-based Megazyme, Ltd. — a major supplier of analytical solutions used by quality control laboratories in the global food and beverage industries. The integration of Megazyme product line into Neogen’s food safety products will expand commercial relationship with food companies across the globe as well as provide foods with highest quality and nutritional value.

In December 2020, Neogen launched the quickest and easiest tests to determine meat speciation in raw meat and environmental sample. The new Reveal tests for horse, beef, sheep, and poultry provide accurate results in five minutes after a simple water extraction. It helps prevent the accidental or deliberate inclusion of other meats in raw processed meats and to validate cleaning following product changeovers.

Industry Prospects

Per a report by Grand View Research, the global food safety testing market size was estimated at $18.0 billion in 2018 and is anticipated to witness a CAGR of 7.7% by 2025. Growing demand for packaged and processed food globally owing to changing lifestyle and growing popularity of quick-service restaurants is driving the need for safety testing of edible items. Moreover, the rising demand for quality tests for processed and unprocessed meats is expected to fuel the food safety testing market growth.

Price Performance

Shares of the company have rallied 21.9% in a year’s time compared with the industry’s growth of 4.8%.

Zacks Rank and Key Picks

Currently, Neogen carries a Zacks Rank # 5 (Strong Sell)

Some better-ranked stocks from the broader medical space include Quidel Corporation QDEL, AdaptHealth Corp. AHCO and Owens& Minor, Inc. OMI. While both Quidel and AdaptHealth sports a Zacks Rank # 1 (Strong Buy), Owens & Minor carries a Zacks Rank # 2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.

Quidel has a projected long-term earnings growth rate of 25%

AdaptHealth has a projected long-term earnings growth rate of 753.3%

Owens & Minor has an estimated long-term earnings growth rate of 48.9%

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