Note: This story has been updated with information from the company's earnings call.
NEW YORK – Meridian Bioscience reported on Friday that its fiscal first quarter revenues increased 96 percent year over year due to the firm's COVID-19 products.
For the three months ended Dec. 31, 2020 the firm reported revenues of $92.9 million, up from $47.4 million a year ago. Meridian beat the average Wall Street estimate of $83.9 million.
Meridian reported Q1 diagnostics revenues of $30.3 million, down 13 percent year over year from $34.8 million, though the company noted diagnostics revenues were up 2 percent from the fourth quarter of FY2020. In a conference call to discuss the firm's financial results, CEO Jack Kenny said that during the fourth quarter, diagnostics revenues continued their recovery from previous pandemic-driven lows and then plateaued in December. Kenny called it a "positive sign" that diagnostics revenues flattened and didn't retreat as a result of the resurgence of COVID-19 late in 2020.
Within diagnostics, the firm reported molecular assays revenues of $4.6 million, down 33 percent year over year from $6.9 million, and immunoassays and blood chemistry assays revenues of $25.7 million, down 8 percent year over year from $27.9 million.
During the quarter, Meridian received a $1 million grant from the National Institutes of Health's Rapid Acceleration of Diagnostics program to develop its Revogene SARS-CoV-2 assay and submitted its application for Emergency Use Authorization to the US Food and Drug Administration. Kenny said Meridian had heard back from the FDA on its submission and had answered FDA's questions in the past month. The firm began shipping Revogene kits in January, he added.
The Revogene SARS-CoV-2 assay is an RT-PCR test that returns results in 85 minutes, with an early call for positive samples in 47 minutes. The test has a positive percent agreement of nearly 93 percent and negative percent agreement of 99 percent and is the first RNA assay launched on the company's Revogene automated molecular testing platform.
During the quarter, Meridian placed 57 new Revogene instruments and now has a total installed base of 288, Kenny said. He added that the firm plans to ramp up manufacturing capacity for Revogene's microfluidic cartridge, opening a new facility in Ohio with two automated manufacturing lines. Meridian received an additional $5.5 million from NIH to ramp its production capacity to 800,000 cartridges per month by the end of the fiscal year.
As for non-COVID-19 related products, Kenny said the firm is beginning clinical trials for its Clostridium difficile assay on the Revogene this month and plans on submitting four new assays to the FDA by the end of the year, including tests for C. difficile and campylobacter, and a gastrointestinal panel. Meridian also has a Shiga toxin test in development, as well as a molecular respiratory panel.
Meridian's Q1 life science segment revenues were $62.6 million, up nearly fivefold year over year from $12.6 million. The company said net revenues from COVID-19 related products were $43 million, with $34 million from molecular products and $9 million from immunological products. Non-COVID-19 life science net revenues were up 55 percent.
Within life science, molecular reagent revenues increased more than eightfold to $46.0 million from $5.4 million in the year-ago quarter. Immunological reagent revenues more than doubled to $16.6 million from $7.3 million in Q1 2020. CFO Bryan Baldasare said sales of molecular reagents contributed 50 percent to revenues for the quarter.
He added that the company expects revenues in the second half of the fiscal year to be lower than those of the first half, as the vaccine rollout ramps up. Meridian expects the second half of the year to be similar to its fourth quarter of 2020, he said.
Kenny said the firm was a COVID-19 beneficiary, but not COVID-19 dependent, and expects to produce results after the pandemic. Kenny noted that COVID-19 will be around for years to come and there will be a significant COVID-19 market in 2022 and beyond. He said the company also has high confidence its current products are not affected by the new variants of the SARS-CoV-2 virus.
He also said Meridian is considering further strategic opportunities and keeping its "eyes and ears open" for acquisitions.
The company reported Q1 net earnings of $26.8 million, or $.61 per share, compared to $2.8 million, or $.07 per share in Q1 2020. Adjusted EPS was $.65, beating the consensus Wall Street estimate of $.42 per share.
In Q1, the firm’s R&D costs rose 19 percent to $5.7 million from $4.8 million in Q1 2020, and its SG&A costs rose 23 percent to $19.0 million from $15.4 million.
Meridian had $63.2 million in cash and cash equivalents as of Dec. 31, 2020. Baldasare said in a statement the firm would use its cash generation to "fortify our Life Science segment production capacity and build out a new production facility for assays" on the Revogene platform.
The Cincinnati-based firm raised the FY 2021 guidance it set in Q4 2020. The company expects revenues between $320 million and $350 million, compared to previous guidance of $290 million and $310 million, with diagnostics revenues between $140 million and $150 million and life science revenues between $180 million and $200 million. Meridian expects adjusted EPS in the range of $1.70 to $1.90, compared to previous guidance of $1.14 to $1.28.