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Quidel Q4 Revenues Rise 15 Percent, Beat Estimates

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 growth in its rapid immunoassay business.

"Q4 was really good, 2019 was fine [and] in line with expectations, and we're really looking forward to 2020 on a number of fronts," said Quidel CEO Doug Bryant on a call with analysts and investors to recap the results. "Camaraderie in this company is terrific, and the morale and happiness of our employees has never been higher," he added.

For the three months ended Dec. 31, Quidel reported revenues of $152.2 million, up from $132.6 million in Q4 2018, beating analysts' consensus estimate of $145.2 million and consistent with the firm's preliminary earnings estimates.

Randy Steward, Quidel's CFO, said during the call that total influenza revenue grew 44 percent in the quarter, to $50.3 million, with 83 percent of the firm's $45 million of influenza rapid immunoassay revenue derived from the Sofia platform. In the quarter the firm also saw "the highest revenue for flu in the fourth quarter since the 2009 pandemic over a decade ago," Bryant also said in a statement.

During the quarter, cardiac immunoassay revenue increased 5 percent year over year to $65.8 million from $62.9 million. Revenues from rapid immunoassays rose 29 percent to $64.9 million from $50.4 million, while revenues from specialized diagnostic solutions increased 7 percent to $14.3 million from $13.4 million.

Molecular diagnostics revenue, meanwhile, increased 21 percent to $7.1 million from $5.8 million, led by 29 percent revenue growth from Solana. "We continue to see strong growth from our Solana platform, specifically with the Strep A and influenza product lines, driven by the severe and earlier-than-typical influenza season," Steward said, adding that the firm is also seeing "strong growth" from its Solana C. difficile and HSV/VZV products.

Quidel's Q4 net income was $30.6 million, or $.71 per share, down from net income of $32.5 million, or $.78 per share, in Q4 2018. On an adjusted basis, Quidel's Q4 2019 EPS was $1.00, beating the consensus estimate of $.82 per share.

Quidel's Q4 R&D expenses rose approximately 18 percent to $14.9 million from $12.6 million in the year-ago period, primarily due to higher spending on new product platforms. Its SG&A costs increased 9 percent year over year to $42.3 million from $38.7 million, largely due to increased spend on expanding the international sales organization, product promotion costs, and higher freight costs.

For full-year 2019, Quidel reported a 2 percent increase in total revenues to $534.9 million from $522.3 million, ahead of analysts' consensus estimate of $527.9 million. The increase was due to sales growth for rapid respiratory immunoassay products, bolstered by a strong start to the respiratory season in the fourth quarter of 2019.

Cardiac immunoassay revenues were flat at $266.5 million for the year. Rapid immunoassay revenues in 2019 increased 5 percent to $191.7 million from $183.2 million. Specialized Diagnostics grew 3 percent to $54.9 million from $53.2 million. Molecular Diagnostics revenue increased 12 percent to $21.7 million from $19.4 million, led by 25 percent revenue growth for the Solana platform.

"We believe there is continued strong demand for the Solana platform and that Solana will continue to be the driver of molecular growth going forward, driven by incremental Solana instrument placements and increased assay utilization," Steward said. Bryant also noted that the firm has placed approximately 1,100 Solana instruments, and Quidel recently completed development of a front-end solution to improve ease of use on Solana.

In the year, the firm achieved some milestones on development of its Savana platform, Bryant said. It has completed six assay panels, finalized cartridge design, and begun manufacturing with an eye to beginning a clinical trial by the end of the year.

Quidel is also working on a next-generation Sofia automated immunoassay platform, which executives referred to as Sniffles on the call, that will be lower cost and smaller. That project is on track for US clinical trials during the respiratory season next winter, Bryant said.

Quidel's net income in 2019 was $72.9 million, or $1.73 per share, compared to net income of $74.2 million, or $1.86 per share, in 2018. On an adjusted basis, Quidel reported EPS of $2.97, beating analysts' average estimate of $2.78.

In 2019, Quidel's R&D expenses rose 2 percent year over year to $52.6 million from $51.6 million due to higher spend on projects related to the Sofia and Savanna platforms. Meanwhile, its SG&A expenses rose 6 percent to $163.9 million from $153.9 million.  

Acquisition and integration costs for 2019 decreased by $0.7 million to $2.6 million as more of the firm's global operations became fully integrated into the business, but this was partially offset by $1.6 million incurred during the fourth quarter of 2019 related to the review of new business development opportunities.

Quidel ended the year with $52.8 million in cash, cash equivalents, and restricted cash.