Download Bio-Reference Laboratories, Inc.

Management Meeting Invitation
Bio-Reference
Laboratories, Inc.
(Nasdaq: BRLI)
Marc Grodman, MD: CEO & Chairman
Richard Faherty: CIO
One-On-One Meetings
Monday, August 16, 2010
Philadelphia/Wilmington
To request a meeting, contact:
Pedro Chin, Institutional Sales
(703) 760-7879
[email protected]
The Benchmark Company, LLC
NEW YORK | BOSTON | PHILADELPHIA | SAN FRANCISCO | LOS ANGELES | SAN DIEGO
40 Fulton Street | New York, NY | 10038
Telephone 212-312-6750
About Bio-Reference (BRLI)
Bio-Reference is a full-service clinical laboratory with core operations in the Greater New York region where it is second only to Quest
Diagnostics in market share. The GenPath division provides genetic oncology testing nationwide, currently with a focus on
hematopathology. The GeneDx division is a premier genetics testing laboratory for the identification of rare diseases. In 2008, BioReference launched the nation-wide “GenPap” Women’s Health Initiative, which employs genetic testing to screen women for STDs,
including the many variants of HPV. Bio-Reference has a presence in correctional healthcare involving prisons and jails in most states.
Competition includes the national full-service laboratories, Quest and LabCorp, plus oncology specialists such as Genoptix, Clarient and
NeoGenomics.
Benchmark Research Highlights
Detailed perspective on our current recommendation on Bio-Reference, including applicable legal notices, can be
found in our most recent research note, dated June 17, 2010.
 Demographics and technology support growth. BRLI leverages trends driving genetic diagnostics, including the expanding
demographic over 60 years old and the growth in targeted cancer therapies with personalized treatment regimens. Advances in
genetic screening technology enhance testing sensitivity and provide greater diagnostic detail at a cost that is increasingly
competitive with traditional methods. The result is a vast diagnostic opportunity that can be difficult to apply in practice. So much
diagnostic information is available that clinicians do not know how to use it, patients don’t understand test results and payors do not
know what to reimburse. Simplifying this is BRLI’s opportunity.
 BRLI focuses on test development and marketing, not basic research. The Company strives to design tests that directly
influence treatment decisions. It seeks to develop currently-relevant diagnostics that are user friendly to physicians and patients.
Bio-Reference avoids reimbursement challenges and conserves its research budget by focusing on developing practical applications
for leading technologies that its sales force can sell immediately. Enabling technologies are acquired or licensed as needed.
 Women’s health and OB/GYN offer substantial growth opportunity. Introduced in 2008, Bio-Reference’s GenPap test has
approximately tripled in volume over the past 12 months. The test is essentially a genetically based Pap smear that characterizes the
HPV virus that causes cervical cancers at the same time as detecting cervical cancer itself. Application of genetic technology to this
test offers superior sensitivity and nearly eliminates cases of insufficient sample volume. Bio-Reference plans to leverage its recently
acquired Lenetix pre- and post-natal diagnostics technology to further penetrate the OB/GYN market.
 Valuation supports our Buy rating and $30 Price Target. We believe BRLI shares are attractive based on our forecast of greater
than 25% EPS expansion for several years. Our $30 price target is based on 25x our $1.22 EPS estimate for 2011. Based on our
forecast 31% earnings growth in 2011, our 25x valuation multiple implies a 0.8x PE/G ratio.
Management
Marc D. Grodman, M.D.: Chairman, President and Chief Executive Officer
Dr. Grodman founded Bio-Reference Laboratories December 1981. He is an Assistant Professor of Clinical Medicine at Columbia
University’s College of Physicians and Surgeons and is Assistant Attending Physician at Presbyterian Hospital in New York. Except for
these part-time duties, Dr. Grodman devotes all of his working time to Bio-Reference Laboratories. He has been a member of the Board
of Directors of the American Clinical Laboratory Association (ACLA) since January 2005, and Chairman since April 2008.
Richard Faherty: Chief Information Officer
Mr. Faherty oversees the Company’s two informatics operations, PSIMedica and CareEvolve. Mr. Faherty provided custom programming
and system analysis services to GenCare from 1987 until its acquisition by Bio-Reference Laboratories in 1995. He became a consultant
to the Company in 1995 in the information technology area and an employee in 1999.
The Benchmark Company, LLC
NEW YORK | BOSTON | PHILADELPHIA | SAN FRANCISCO | LOS ANGELES | SAN DIEGO
40 Fulton Street | New York, NY | 10038
Telephone 212-312-6750