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QuidelOrtho Revenues up 8 Percent in Q2

NEW YORK – QuidelOrtho announced after the close of the market on Tuesday that its second quarter revenues rose 8 percent on a reported basis.

For the three months ended June 30, the San Diego-based firm had total revenues of $665.1 million, up from $613.4 million in the prior-year quarter and beating analysts' average estimate of $615.2 million in revenues.

At constant currency and reporting as if Quidel and Ortho Clinical Diagnostics had been a combined company a year ago, QuidelOrtho's Q2 revenues fell 26 percent to $665.1 million from $898.5 million in the second quarter of 2022. Quidel completed its acquisition of Ortho Clinical in late May 2022.

"Our company reached historic heights during the pandemic, demonstrating our ability to quickly solve the problems of today," said QuidelOrtho CEO Douglas Bryant on a call with investors to recap the earnings. "With the pandemic in the rearview mirror, we are on our way to demonstrating our agility and nimbleness once again while driving long-term sustainable growth."

Treating Quidel and Ortho Clinical as one company a year ago, QuidelOrtho's non-respiratory revenue increased 3 percent year over year, or 4 percent in constant currency, driven by 9 percent constant currency growth in its Labs business unit. Respiratory revenues were down 74 percent.

Also treating QuidelOrtho as a combined firm a year ago, revenues within the Labs business unit increased 6 percent to $361.4 million from $342.0 million, while Transfusion Medicine revenues were down 3 percent to $163.3 million from $168.8 million.

QuidelOrtho's Point of Care business unit revenues dropped 63 percent to $134.2 million from $367.0 million. Revenues in Molecular Diagnostics fell 70 percent to $6.2 million from $20.7 million.

In the quarter, QuidelOrtho completed Emergency Use Authorization and 510(k) submissions to the US Food and Drug Administration for its Savanna point-of-care molecular diagnostic instrument.

Bryant declined to comment on the anticipated timeline for the US launch of Savanna as the firm awaits regulatory clearance. The instrument was submitted with two molecular diagnostic panels: the firm's RVP4 panel that detects influenza A and B, respiratory syncytial virus, and SARS-CoV-2, as well as a panel called HSV/VZV to detect herpes simplex and varicella-zoster virus in skin lesions.

Bryant said that the future Savanna menu that will begin debuting in 2024 includes a respiratory viral panel called RVP11, and HSV/VZV and syphilis panel, a panel for sexually transmitted infections including chlamydia, gonorrhea, Mycoplasma genitalium, and Trichomonas vaginalis, a panel for gastrointestinal infections and for GI parasites, a pharyngitis panel that tests for four bacterial pathogens, and a vaginitis panel.

"We've focused our offering on syndromic testing needs to take advantage of the unique features of Savanna including rapid turnaround time, simple workflow, and test flexibility, allowing more clinically relevant information to be generated closer to the patient, in a time frame that actually can affect treatment," Bryant said, adding, "The platform is robust, the total addressable market is huge, and the outlook is very exciting."

On a reported basis, the firm's research and development expenses increased 84 percent to $62.8 million from $34.2 million, while its SG&A costs rose 51 percent year over year to $179.1 million from $118.4 million.

QuidelOrtho posted a net loss of $53.2 million, or $.80 per share, compared to net income of $19.3 million, or $.36 per share, a year ago. Adjusted EPS was $.26, below the analysts' average estimate of $.28.

On the call, QuidelOrtho CFO Joseph Busky said the firm was lowering the high end of its full-year guidance to total revenue of $2.88 billion to $3.08 billion compared to prior guidance of $2.87 billion to $3.18 billion.

QuidelOrtho raised the low end of its non-respiratory revenue guidance to 5 percent to 6.5 percent growth on a constant currency basis from prior guidance of 4.5 to 6.5 percent growth. It revised its revenue guidance to $2.27 billion to $2.31 billion, compared to a prior guidance of $2.26 billion to $2.31 billion.

QuidelOrtho also lowered the high end of its respiratory revenue guidance. It is now guiding for full-year 2023 revenues of $610 million to $775 million, including COVID revenue of $300 million to $400 million, compared to a prior guide of $610 million to $875 million, including COVID revenue of $300 million to $500 million.

The firm changed its adjusted EPS for 2023 to a range of $4.85 to $5.30 compared to prior guidance of $5.15 to $5.70.

In Q2, QuidelOrtho paid down $72 million on a term loan, or $20 million more than contractually required, and completed a final $40 million payment for the 2017 acquisition of the Alere Cardiometabolic assets, the firm said.

The firm ended the quarter with $178.6 million in cash and cash equivalents, and $45.1 million in marketable securities.

In Wednesday morning trading on the Nasdaq, shares of QuidelOrtho were down approximately 7 percent to $76.58.