NEW YORK (360Dx) – OraSure Technologies reported after the close of the market on Wednesday that its fourth quarter revenues dipped 1 percent year over year.
For the three months ended Dec. 31, 2019, the point-of-care diagnostic testing and specimen collection device manufacturer reported revenues of $49.7 million, down from $50.2 million a year ago.
In a call with investors to recap the results, Stephen Tang, OraSure's president and CEO, said that revenues in the quarter were the third highest of any quarter in the company's history and "brought a close to a very productive year" for the firm.
The firm's net product revenues for the quarter rose 5 percent to $47.2 million from $44.8 million in Q4 2018. Within products, molecular collections systems revenues increased 5 percent to $25.5 million from $25.4 million, which included a 133 percent increase in revenues from microbiome products to $4.4 million from $1.9 million, offset by an 11 percent decrease in genomics product revenues to $21.0 million from $23.5 million. Including royalty income, molecular collection systems revenues fell 8 percent in Q4 to $27.8 million from $30.2 million.
The firm's Q4 revenues from infectious disease testing jumped 37 percent to $18.7 million from $13.6 million a year earlier. Risk assessment testing revenues were flat at $2.9 million. Cryosurgical systems revenues were absent in the quarter, as that business was divested in mid-August.
Within the firm's infectious disease testing revenues, sales of its OraQuick tests for HIV and HCV rose 40 percent to $18.2 million from $13.0 million in Q4 2018. Total HIV sales jumped 57 percent to $14.8 million from $9.4 million — domestic HIV testing was flat at $4.9 million, but this was offset by a 123 percent increase in international HIV testing sales to $9.8 million from $4.4 million, primarily the result of higher sales of the company’s OraQuick HIV Self-Test in Africa and Latin America and increased sales of the Professional HIV product in Asia.
"We shipped 2.9 million HIV Self-Tests in Q4; an all-time record for this product," Tang said.
Total HCV testing sales fell 5 percent to $3.5 million from $3.7 million in the year-ago quarter — a 7 percent increase in domestic HCV testing sales to $2.2 million from $2.1 million was offset by a 19 percent decrease in international HCV testing revenues to $1.3 million from $1.6 million. The domestic increase was due primarily to higher sales into the public health and physician office market caused by the impact of the opioid crisis on HCV infections. The international decrease was due to lower sales in Africa, partially offset by sales in Asia.
Sales of the OraQuick HIV Self-Test for Q4 included $966,000 of support payments under the company's charitable support agreement with the Bill & Melinda Gates Foundation, compared to $855,000 in Q4 2018. Royalty income from a litigation settlement associated with a molecular collection device was $2.2 million for the fourth quarter, compared to $4.8 million in Q4 of 2018.
Other revenues for Q4 fell to $334,000 from $578,000 million a year ago.
OraSure's Q4 net income was $2.4 million, or $.04 per share, compared to $10.3 million, or $.16 per share, in the year-ago period.
The firm's R&D expenses for the quarter surged 48 percent to $6.1 million from $4.1 million in Q4 2018, and its SG&A costs rose 8 percent to $19.5 million from $18.1 million.
For full-year 2019, OraSure reported that total revenues fell 15 percent to $154.6 million from $181.7 million a year earlier.
The firm's product revenues for the year were down 6 percent to $148.1 million from $165.4 million in 2018. Within products, molecular collections systems revenues fell 18 percent to $70.8 million from $86.5 million, which included a 91 percent increase in revenues from microbiome products to $12.8 million from $6.7 million, offset by a 28 percent decrease in genomics product revenues to $57.4 million from $79.8 million. Including royalty income, molecular collection systems revenues fell 21 percent in 2019 to $76.4 million from $96.1 million.
Tang noted that an overall decline across the consumer genomics market has impacted the firm's molecular collection systems products and services revenues, but that the underlying strength in other parts of the OraSure's molecular business has offset the challenges, particularly those it has seen in the consumer ancestry testing market.
"The commercial genomics market has been undergoing a major evolution that has created headwinds for our molecular business," Tang said. "We see this trend continuing into 2020; however we are optimistic that opportunities in other critical growth areas within the genomics market will help offset this trend."
Specifically, the firm expects disease risk management — including pharmacogenomics testing, hereditary disease screening, prenatal or carrier screening, population health initiatives, and molecular tests to diagnose acute disease — to eclipse ancestry testing, Tang said, as he projected robust growth in 2020 and beyond.
The firm's 2019 revenues from infectious disease testing increased 3 percent to $58.0 million from $56.1 million a year earlier. Risk assessment testing revenues increased 1 percent to $12.2 million from $12.1 million, and cryosurgical systems revenues fell 34 percent to $7.0 million from $10.8 million.
Within the firm's infectious disease testing revenues, sales of its OraQuick tests for HIV and HCV rose 4 percent to $56.1 million from $53.9 million in 2018. Total HIV sales rose 4 percent to $43.1 million from $41.5 million — domestic HIV testing sales fell 9 percent to $18.0 million from $19.7 million, but this was offset by a 15 percent increase in international HIV testing sales to $25.1 million from $21.8 million.
Total HCV testing sales rose 5 percent to $13.0 million from $12.7 million in 2018 — this included an 8 percent increase in domestic HCV testing sales to $8.1 million from $7.5 million with international HCV testing revenues flat at $4.9 million.
The firm expects global HIV Self-Test revenues to grow in the high teens for 2020, and has 15 international product registrations in progress which will add to the 20 it has already obtained. The most recent was for the Ivory Coast. "Each registration opens up a new market for us and expands the opportunity for growth," Tang added. It also expects growth domestically, in part due to a new federal initiative and research supporting the benefits of self-testing.
In the 2019, OraSure acquired two microbiome lab services providers, CoreBiome and Diversigen. "These acquisitions increase our product and service offerings to capture and expand new market opportunities which will contribute to our future growth," Tang said.
OraSure continues to make good progress in the integration of the firms, he said, and will consolidate them into one lab services company, with the service offering unified under the Diversigen name and lab operations consolidated in the Minneapolis-St. Paul, Minnesota area, where CoreBiome is located. Diversigen had been located in Houston. The firm is constructing a new lab facility for the consolidated lab services team which it expects will be completed by the end of 2020.
OraSure also received 510(k) clearances in 2019 for the Oragene Dx family of molecular collectors, a rapid Ebola test, and approval to use the World Health Organization Pre-qualified OraQuick HIV Professional and Self-Test products for pediatric testing as previously reported.
"These approvals will substantially improve the competitive positioning of these products," Tang said. In particular, the clearance of the Oragene Dx makes it the only saliva collection device that can be used for prescription or over-the-counter use, Tang said, adding, "This clearance simplifies FDA approvals for genetic testing manufacturers who want to add saliva as a sample" for their tests.
OraSure's 2019 net income fell to $16.7 million, or $.27 per share, from $20.4 million, or $.33 per share, in the year-ago period.
The firm's R&D expenses for the quarter rose 20 percent to $19.6 million from $16.3 million in Q4 2018, and its SG&A costs fell 3 percent to $67.2 million from $68.9 million.
OraSure ended the year with $75.7 million in cash and cash equivalents, and $80.6 million in short-term investments.
For 2020, the company expects net revenues of $145 million to $155 million and is projecting a net loss of $.07 to $.10 per share. On average, analysts expect revenues of $170.8 million and earnings per share of $.24.