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Quidel Q4 Revenues Up 15 Percent

NEW YORK (GenomeWeb) – Diagnostics manufacturer Quidel reported after the close of the market on Wednesday that its fourth quarter revenues rose 15 percent year over year, due primarily to a steep rise in cardiac immunoassay revenues as well as increased sales of rapid immunoassay and molecular diagnostic products.

For the three months ended Dec. 31, 2018 Quidel reported revenues of $132.6 million, up from $114.9 million in Q4 2017, and beating the consensus analyst estimate of $132.1 million.

During the quarter, cardiac immunoassay revenue increased 34 percent year over year to $62.9 million from $47.0 million. Revenues from rapid immunoassays rose 3 percent to $50.4 million from $49.1 million, while revenues from specialized diagnostic solutions decreased 6 percent to 13.4 million from $14.2 million.

Molecular diagnostics revenue, meanwhile, increased 30 percent to $5.8 million from $4.5 million. In a conference call to recap the earnings, Quidel CFO Randy Steward noted that the increase in molecular was driven in part by 71 percent growth in Solana revenues, with strength "specifically with the Strep A assay." He added that the firm expects molecular revenue growth of 20 percent in 2019 to be driven by incremental Solana instrument placements and increased assay utilization.

In the recently completed quarter, the firm received CE marking for its Sofia Quantitative Vitamin D Assay, Sofia 2 Lyme+ Fluorescent Immunoassay, and TriageTrue High Sensitivity Troponin I Test.

Quidel's Q4 net income was $32.5 million, or $.78 per share, up from a loss of $5.1 million, or $.15 per share, in Q4 2017. On an adjusted basis, Quidel's Q4 2018 EPS was $.80, beating the consensus analyst estimate of $.60 per share.

Quidel's Q4 R&D expenses rose approximately 18 percent to $12.6 million from $10.7 million in the year-ago period, primarily due to investments in the firm's Savanna molecular diagnostics platform, the firm said. Its SG&A costs increased 10 percent year over year to $38.7 million from $35.1 million, largely due to costs associated with the Triage and BNP Businesses, higher professional service fees, and higher compensation costs.

Quidel recorded a 65 percent decline in acquisition and integration costs to $3.3 million from $9.5 million.

For full-year 2018, Quidel reported an 88 percent jump in total revenues to $522.3 million from $277.7 million, slightly ahead of the consensus analysts' estimate of $521.6 million. The increase was due to the full-year effect of the cardiac business acquired in 2017, as well as an 11 percent growth in the legacy Quidel business, including growth in rapid immunoassay and molecular diagnostic revenues.

Cardiac immunoassay revenues totaled $266.5 million for the year from $47.0 million in 2017. Rapid immunoassay revenues in 2018 increased 11 percent to $183.2 million from $165.1 million. Specialized Diagnostics grew 2 percent to $53.2 million from $52.0 million. Molecular Diagnostics revenue increased 43 percent to $19.4 million from $13.6 million.

In 2018, the firm placed nearly 10,000 of its Sofia immunoassay systems, and within the molecular business Solana reagent kit revenue doubled year over year due in part to new HSV/VZV and C. difficile products, Quidel CEO Douglas Bryant said during the call. Quidel also "made progress on the 21 significant R&D programs that are currently funded, including Savanna reagents, instrument, and test cartridges," Bryant said.

Regarding the Savanna system, which began initial development in 2011, Bryant said Quidel now intends to launch the instrument with four or more multiplexed assay cartridges cleared by the US Food and Drug Administration and immediately available to customers.

"Therefore, the timing of our launch is highly dependent on us conducting multiple clinical trials simultaneously, [obtaining] CE mark, and then [successfully completing] review by the FDA," Bryant said. Quidel is currently finishing the Savanna cartridge design to make it more efficient for manufacturing. The company will then need to manufacture "tens of thousands of cartridges" for the clinical trials, but Bryant reaffirmed a projected US launch of Savanna sometime in 2020.

Quidel's net income in 2018 was $74.2 million, or $1.86 per share, compared to a loss of $8.2 million, or $.24 per share, in 2017. On an adjusted basis, Quidel reported EPS of $3.04, beating the analysts' average estimate of $2.85.

In 2018, Quidel's R&D expenses rose by 54 percent year over year to $51.6 million from $33.6 million due to additional expenses associated with the Triage business and investment in Savanna. Meanwhile, its SG&A expenses jumped 60 percent to $153.9 million from $96.4 million.

Acquisition and integration costs for 2018 were down 14 percent to $14.2 million from $16.5 million.

Quidel ended the year with $43.7 million in cash, cash equivalents, and restricted cash.

In Thursday morning trading on Nasdaq, Quidel shares were up 8 percent to $66.16.