A Medford manufacturer of rapid diagnostic tests for HIV, syphilis, Zika and other infectious diseases hopes to increase sales by purchasing a Brazilian company, executives said Thursday.
Chembio Diagnostics Inc. plans to buy Orangelife Comercio e Industria Ltda. in Rio de Janeiro for $150,000 in cash and more than $3 million in Chembio shares over several years. Chembio shares were trading at about $5 on the NASDAQ stock market on Thursday.
Like Chembio, Orangelife manufactures and sells point-of-care tests for infectious diseases, including HIV.
Chembio considers Brazil, with a population of 209 million, “to be the largest and most attractive market for infectious disease testing,” CEO John J. Sperzel said. The acquisition will allow Chembio to sell its products to the state, private and pharmacy markets in Brazil, he said.
Chembio has been selling tests to Brazil’s Ministry of Health since 2004 through a partnership with Bio-Manguinhos, a subsidiary of the Oswaldo Cruz Foundation. The foundation is responsible for developing vaccines and medicines for Brazil’s public health system, he said.
Orangelife will be renamed Chembio Diagnostics Brazil Ltda. and serve as a subsidiary of the local company. The deal is expected to close before Dec. 31, Sperzel said.
Chembio announced the acquisition as part of an earnings release on Thursday.
The company reported a loss of nearly $10 million for the January-September period compared with a loss of $4.7 million a year earlier. Revenue totaled $27.6 million in the first nine months of this year, up from $26.8 million in 2018.
Chembio last reported an annual profit in 2013.
The company employs more than 200 people at offices in Medford and a warehouse in Holbrook. It plans to consolidate operations into one building in Hauppauge. A year ago, the Suffolk County Industrial Development Agency backed the $3.9 million project with tax breaks.
Chembio has a factory in Malaysia due to a 2016 acquisition in that country. The facility recently received approval from the World Health Organization to produce a type of HIV test.