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UPDATE: EKF Diagnostics Drops As Medicare Reimbursement For Selah Biomarkers Reduced

May 7, 2014

Alice Attwood

LONDON (Alliance News) - EKF Diagnostics Holdings PLC saw its shares drop on the AIM All-Share market Wednesday after the company said reimbursement by Medicare for Selah Genomic's drug metabolism genetic biomarkers panel, has been reduced after revisions by the Medicare Administrative Contractor.

The point-of-care, central laboratory and molecular diagnostics business said Palmetto GBA, the J11 Medicare Administrative Contractor, has revised reimbursement levels for the states where Palmetto is the MAC; North Carolina, South Carolina, West Virginia and Virginia.

As a result, reimbursement by Medicare for recently acquired Selah's drug metabolism genetic biomarkers, or DME, panel, has been reduced to USD495 per sample from USD941.

The cut in reimbursement level has no impact on management expectations for EKF as a whole, said the firm; Selah's DME panel is one of a number of molecular tests in the Selah portfolio. EKF said that the commercial rationale behind the acquisition is unaffected due to the considerable opportunity for Selah to continue to add market share.

"Whilst we would clearly have preferred reimbursement levels to have remained higher we are confident that Selah's overall portfolio will deliver an enhanced return to our shareholders. Selah's sales force has established relationships with over 300 physicians, a six-fold increase since October 2013, and we expect to see a considerable increase in revenues from Selah through the rest of this year and beyond," said Julian Baines, CEO of EKF.

EKF announced that it had entered into a conditional agreement to buy US-based molecular diagnostics business Selah Genomics Inc for up to USD70.6 million nin March this year

Shares in EKF Diagnostics were trading 23.92% lower at 24.73 pence per share, the second biggest faller on the AIM All-Share market Wednesday.

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Source: Alliance News