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Quidel Q2 Sales Spike on Addition of Cardiac Immunoassay Business

NEW YORK (GenomeWeb) – Quidel reported after the close of the market Tuesday that its second quarter revenues nearly tripled year over year due to the acquisition of a cardiac testing business last fall.

The San Diego-based diagnostics company reported total sales of $103.2 million, up from $38.3 million in the second quarter of 2017 and edging past analysts' consensus estimate of $103.1 million. The gains were driven by cardiac immunoassay revenues, which include sales of the Triage, Triage Toxicology, and BNP products Quidel acquired from Alere in October 2017, and totaled $69.9 million for Q2 2018.

Sales of rapid immunoassay products dropped to $16.7 million from $22.0 million in Q2 2017, which the firm said was due to an earlier end to the influenza season in 2018 compared to the prior year, while its specialized diagnostic solutions revenue declined to $12.7 million from $13.1 million. Meanwhile, molecular diagnostic product sales increased to $3.9 million from $3.2 million, driven by its Solana molecular diagnostic products, sales of which increased 103 percent year over year.

Quidel President and CEO Doug Bryant noted in a statement that the firm shipped its 10,000th Sofia 2 instruments during the quarter. The Sofia 2 is a small bench-top immunoassay analyzer that offers higher- and lower-volume utilization than the first iteration of the platform and was cleared for marketing by the US Food and Drug Administration in March 2017.

On a call with analysts and investors after the results were released, Bryant said the performance of the acquired Alere businesses were "going reasonably well" and exceeded the firm's expectations. Though the legacy Quidel business was hit by the lower flu test sales, the setback "would have been hard to solve for in previous years, given the large contribution to profitability of our influenza products. In the new Quidel, this is obviously now less of an issue," said Bryant.

He also noted that Quidel showed off its platforms including some in developemnt at the American Association for Clinical Chemistry annual meeting last week in Chicago.

"I think the new form factor of Savanna and the new, smaller cartridge design was a big surprise for many who visited the booth," Bryant said of Quidel's molecular diagnostic platform. "We continue to hear that there is a big gap in the molecular space that the Savanna menu of affordable, smaller syndromic panels, as well as individual assays, will address nicely, and look forward to introducing the product in Q4 2019 in Europe and in the first half of 2020 in the US."

Bryant noted that the firm is waiting a CLIA waiver for its Sofia Whole Blood Lyme assay pending an FDA review of studies. "We hope for clearance in August, a little later than planned, and are ready to go from a marketing perspective," he said on the call. "We believe that this has the potential to be a nice growth driver for us in the US, with growth driven largely by our introduction of a CLIA-waived assay."

He further noted the recent FDA clearance of Quidel's Solana Bordetella Complete Assay, which detects and differentiates Bordetella pertussis and Bordetella parapertussis in nasopharyngeal swabs.

Quidel posted a net loss of $3.1 million, or $.08 per share, for the quarter compared to a loss of $11.8 million, or $.35 per share, for the second quarter of 2017. Its adjusted earnings per share for the quarter were $.36, beating analysts' average estimate of $.24.

The firm's R&D spending jumped to $13.3 million from $7.6 million, and its SG&A expenses nearly doubled to $39 million from $19.8 million year over year.

Quidel finished the quarter with $38.7 million in cash and cash equivalents.

Despite the positive results in the quarter, shares of Quidel dropped around 5 percent to $68.32 in Wednesday morning trade on the Nasdaq.