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Quidel Q1 Revenues Up 18 Percent, Beats Estimates on Top and Bottom Lines

NEW YORK – Quidel reported after the close of the market on Wednesday that its first quarter revenues declined 13 percent year over year, primarily driven by difficult year-over year comparable flu test sales and foreign currency headwind.

For the three months ended March 31, revenues rose to $174.7 million from $148 million in Q1 2019, beating analysts' average estimate of $158.1 million.

The San Diego-based firm attributed the revenue increase to growth in the rapid immunoassay business as well as molecular diagnostic and specialized diagnostic solutions.

Cardiometabolic immunoassay revenues were $53.9 million in the first quarter of 2019, declining 18 percent from $65.9 in the first quarter of 2019, or 17 percent over last year on a constant currency basis.

Rapid immunoassay product revenues jumped 54 percent year over year to $95.9 million from $62.5 million, primarily due to a $30.3 million increase in influenza revenue from the first quarter of 2019. Sofia influenza immunoassay revenue increased 58 percent from the first quarter of 2019 to $55.9 million, while QuickVue influenza revenue increased 119 percent from the first quarter of 2019 to $17.9 million.

Molecular diagnostic solutions revenues increased 45 percent to $8.5 million from $5.7 million in the prior-year quarter. This was led by 41 percent growth in Solana sales with a $1 million contribution from the firm's Lyra SARS-CoV-2 assay sales. Meanwhile, specialized diagnostic solutions revenues increased 1 percent year over year to $16.5 million from $13.9 million, driven by demand for respiratory products. 

The firm's influenza testing revenue reached record highs in January and February, and continued at a high level throughout the end of the quarter, Quidel President and CEO Douglas Bryant said in a statement.

"In the midst of an unusually strong respiratory season that required our operations teams to scale up manufacturing, our R&D organization pivoted quickly to develop a RT-PCR assay for SARS-CoV-2, and both antigen and serology assays for our Sofia analyzers," Bryant said, adding that the first assay has received Emergency Use Authorization from the FDA, and the others are "not far behind."

In a call to recap the earnings, Bryant commented on the firm's COVID-19 rapid viral antigen test in development. He noted that the lab constraints of molecular testing will likely impact test volumes, so rapid antigen tests will also be needed for public health. The firm is now manufacturing an antigen-based assay and intends to ship about 40,000 tests into the market soon for studies to demonstrate performance. Quidel expects to be able to manufacture and ship approximately 1 million antigen-based COVID-19 tests per week within the next several weeks.

Bryant also highlighted progress Quidel made in the quarter on its Savanna sample-to-answer molecular diagnostics instrument. "Our thermal cycling times now are down to 10 seconds per cycle. We think we can do a reverse-transcriptase assay, [and] our respiratory viral panel  which more than likely will include COVID-19  we think we can do in 18 minutes tops," he said, adding that the firm is also working to decrease that time and can complete a DNA-based panel in 13 minutes. Overall, he described the system as "isothermal speed and footprint, but with PCR performance," noting that the instrument is scheduled to be introduced in 2021.

Quidel's Q1 net income rose to $40.2 million, or $.93 per share, from $24.8 million, or $.60 per share, in Q1 2019. On an adjusted basis, the company posted earnings of $1.22 per share, well above the average Wall Street estimate for earnings of $.98 per share.

The firm's Q1 R&D expenses rose 18 percent to $16.4 million from $13.9 million year over year, due to higher employee-related costs, increased spending on clinical trials, Sofia assays and next-generation platform development project, the firm said. Its SG&A expenses increased 5 percent to $45.1 million from $43.0 million in the prior-year period, due to higher employee-related costs driven by increased revenue and improved financial performance during the current quarter.

Quidel finished the first quarter with $108.8 million in cash and cash equivalents.

In Thursday morning trading on the Nasdaq, Quidel's stock was up approximately 9 percent to $155.50.