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Quidel 1Q revenue up 46%

April 25, 2017

Quidel reported after the close of the market on Monday that its first quarter revenues rose 46 percent year over year, thanks largely to higher sales of immunoassay, molecular, and specialty products.

For the three months ended March 31, revenues rose to $73.7 million from $50.3 million in Q1 2016, and beat the average analysts’ estimate of $62.0 million.

The firm said that influenza revenues rose 112 percent to $40.8 million year over year, thanks to a severe and longer-than-usual respiratory disease season.

Immunoassay product revenues rose 77 percent to $57.5 million from $32.5 million. Within that category, sales of Sofia test kits jumped 97 percent to $25.2 million and QuickVue testing product revenues rose 64 percent to $32.4 million. Molecular product revenues grew 48 percent to $3.1 million from $2.1 million in Q1 2016, and specialty products revenues grew 7 percent to $2.6 million from $2.4 million in the prior-year period.

Revenues from Quidel’s virology business, meanwhile, dropped 8 percent to $10.0 million from $10.8 million. Revenues from royalties, grants, and other categories fell to $487,000 from $2.5 million a year earlier. Some of the grant revenue that was recognized in the first quarter of 2016 was not repeated in 2017, Quidel said.

“The respiratory disease season was severe and lasted well into April, which was largely dominated by the circulation of a virulent H3N2 strain of influenza, which increased diagnostic test usage, and created a favorable competitive environment for our Sofia, QuickVue, and Solana brands,” Quidel President and CEO Douglas Bryant said in a statement.

He also noted that the robust flu season boosted strep test utilization by 42 percent in the quarter, as the firm’s Virena data showed prolonged, elevated positivity rates nationwide, especially among the 0 to 6 year old and 6 to 12 year old cohorts. “Our Sofia instrument placements increased by 50 percent from the first quarter of the prior year, while Solana instrument placements during that same time period more than doubled, which leaves us optimistic that these incremental placements will further drive test utilization in the near- to mid-term,” Bryant added.

On a conference call with analysts following the release of the earnings, Bryant said that he was surprised by how long this year’s respiratory season persisted, adding that the season appears to have started in many regions of the US by late December. Positivity rates were high and stayed above 25 percent throughout most of the first quarter, he said, noting that “a particularly virulent strain of A/H3N2 was the common early culprit, replaced later in the quarter by a particularly virulent strain of Influenza B.”

Bryant also said that “very high patient volumes … caused a resurgence in the usage” of Quidel’s QuickVue rapid lateral flow immunoassays for influenza testing, because of their ability to provide positive test results in a couple of minutes. He said that the performance of QuickVue Influenza test kits for A and B influenza strains “validated our assumption that time to result and workflow were critical for our customers during an epidemic, which bodes well for the success of Sofia 2, with its three-minute early read feature.”

Placement rates for the firm’s current Sofia bench-top immunoassay analyzer were maintained at high levels throughout the quarter, and Sofia influenza reagent sales were consistent with expectations, he added.

Quidel said that molecular product sales were driven by purchases from customers staring to use its Solana platform, which combines helicase-dependent amplification with fluorescence for detection. Solana reagent sales were led by Group A Strep and HSV/VZV, and included Solana Influenza at modest levels, the firm added. Solana placements were up noticeably, and the forecast for instrument placements moving forward looks promising, Bryan said.

Quidel also noted that over the last several weeks, it received clearances and notices from the US Food and Drug Administration for a number of products, including 510(k) clearance for the Sofia 2 analyzer and Sofia RSV for use with the Sofia 2 analyzer; clearance for Sofia Influenza as a Class II device; and 510(k) clearance for Sofia Influenza on several sample types, including nasal swabs, and for use with the Sofia 2 analyzer.

The firm noted that it also expects to receive a CLIA waiver for Sofia 2 and both the Influenza and RSV assays in the near-term.

Quidel posted net income of $14.3 million, or $.42 per share, compared to a net loss of $3.4 million, or $.11 per share, in Q1 2016. On an adjusted basis, the company posted earnings of $.45 per share, well above the average Wall Street estimate for earnings of $.15 per share.

The firm’s Q1 R&D expenses fell 38 percent to $7.9 million from $12.7 million year over year, primarily due to reduced spending for Savanna and lower clinical trial costs. Its SG&A expenses grew 6 percent to $20.8 million from $19.6 million in the prior-year period.

Quidel finished the first quarter with $197.5 million in cash, cash equivalents, and restricted cash.

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