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Tickers in this Article: CVD, CRL, BASI
Following the success of the Culex Automated in vivo sampling system, recently, pharmaceutical development company, Bioanalytical Systems Inc. or BASi (BASI) launched the next-generation in vivo automated sampling system known as Culex NxT. The company has already started accepting orders for this new system and expects to start shipping any day in January. Based on the fact that the Culex system is currently used by 9 out of  the top 10 pharmaceutical companies, universities, and contract research organizations worldwide to collect pharmacokinetic and pharmacodynamic data, the company expects further growth prospects following the launch of this newest version of the in vivo automated sampling system.

BASi encouragingly noted that Culex NxT with its improved hardware-software features and its user-friendly characteristics has the ability to run trials any time instead of just during business hours. Thus, the company is certain of this innovation to increase clients' efficiency and productivity in the early stages of drug discovery, including safety pharmacology. The company expects all these to bolster its performance further in the instruments division.

We are also encouraged with the fact that BASi recently announced the first of a number of collaborative research projects. This first project is a safety pharmacology study that combines Culex with the company's partner's latest large animal telemetry technology. This way, it also develops BASi's CRO services skill. Also, currently the company is negotiating on preferred provider partnerships and expects this to complete it in another few months.

Although the company may take some time to recompense the last quarter's loss of revenue, we are encouraged with the company's various approaches, which are expected to drive revenue growth and increase profitability in fiscal 2013. These initiatives include aggressive sales and marketing strategies; focus on competitive strengths, especially in the field of specialty assay, discovery capabilities and the development of Culex system.

However, the competitive landscape is tough with the presence of players like Covance Inc. (CVD) and Charles River Laboratories, International Inc. (CRL). We currently have a Neutral recommendation on BASi over the long term. The stock retains a short-term Zacks #3 Rank (Hold).

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