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Oxford Immunotec Q1 Revenues Fall 6 Percent

NEW YORK – Oxford Immunotec on Tuesday morning reported that its first quarter revenues fell 6 percent year over year due to the impact of the COVID-19 pandemic on its sales in China.

For the three months ended March 31, the diagnostics firm with offices in Oxford, UK and Marlborough, Massachusetts brought in revenues of $13.9 million compared to $14.8 million a year ago, but ahead of the average Wall Street estimate of $13.5 million. On a constant currency basis, revenue decreased about 5 percent year over year.

Oxford Immunotec's revenues increased 4 percent year over year in the US due to increased tuberculosis testing volumes in its business with Quest Diagnostics, while revenues in Europe and the rest of the world grew 13 percent year over year driven by strength in the UK, France, and Russia. However, Asia revenues fell 22 percent year over year, primarily due to a slowdown in testing in China as a result of the pandemic, the company said.

"The company came in near the top end of our revenue guidance in Q1 but the global impact of COVID-19 outside of China really started to become apparent towards the end of the quarter," Oxford Immunotec CEO Peter Wrighton-Smith said in a statement. "As we move forward in Q2 and beyond, we remain focused on serving our customers and end users to continue to fight the world's deadliest infectious disease, tuberculosis. We are also taking actions to ensure that when the current temporary disruption eases, we are in the best place possible to meet the needs of the TB market and drive long-term growth."

In a conference call recapping Q1 earnings, Wrighton-Smith elaborated on the effects of the pandemic, noting that in China "at the height of the lockdown, our in-country end user volumes were down 25 percent of our estimated normal baseline. We saw a recovery in March and further recovery in April where volumes were up to approximately two thirds of baseline. We currently believe it will take until the back half of 2020 before we're back to baseline volumes."

Meanwhile, in the US, "volumes were strong in January and February before starting to fall off in March as more and more states imposed shelter-at-home mandates," Wrighton-Smith said. Based on public statements by its US commercialization partner Quest and others, Wrighton-Smith noted, the company expects demand to shrink to approximately 40 to 50 percent of baseline levels before recovering in the second half of 2020 as restrictions are lifted.

Oxford Immunotec's Q1 R&D expenses grew 17 percent to $2.7 million from $2.3 million, while its SG&A spending jumped 23 percent to $14.2 million from $11.5 million.

The company's Q1 net loss swelled to $6.0 million, or $.23 per share, from $1.5 million, or $.06 per share, in Q1 2019. On average, analysts had expected a $.15 loss per share.

The firm declined to provide annual revenue guidance at this time due to the uncertainty of the scope and duration of the COVID-19 pandemic. It said that it expects Q2 revenues of $5 million to $6 million and that it anticipates Q2 being the lowest quarter of the year due to the global effects of the pandemic.

In early Tuesday trading on the Nasdaq, Oxford Immunotec's shares were down nearly 12 percent at $10.40.