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OraSure Misses COVID-19 Antigen Test Sales Guidance; Announces CEO Departure, Strategic Review

NEW YORK – OraSure Technologies said on Wednesday that preliminary fourth quarter revenues for its rapid COVID-19 antigen assay will fall short of prior guidance.

The firm also announced plans to overhaul its organizational structure, including transitioning CEOs and naming new division heads, and stated it is undertaking "a board-level review of strategic alternatives" to enhance stockholder value.

As the only firm with an at-home, over-the-counter claim for an infectious disease diagnostic test when the pandemic began, OraSure began developing its SARS-CoV-2 rapid antigen assay early in 2020. But the firm had numerous delays, including a necessary change in test sample type from oral fluid to a nasal swab. The long-awaited test, called InteliSwab, obtained Emergency Use Authorization in June 2021, but initial scale-up had been limited due to manufacturing setbacks.

On Wednesday, the firm announced that it expects to deliver total revenue in the fiscal fourth quarter at the low end of its guidance range, driven by lower-than-anticipated InteliSwab sales and offset by outperformance in its molecular solutions business unit.

OraSure had previously guided for full-year revenues of between $230 million and $233 million, and fourth quarter revenues of between $60 million and $63 million. Specifically, the firm had guided for approximately $30 million in full-year InteliSwab revenues, but now expects to realize $20 million in InteliSwab revenues for the full year, and Q4 InteliSwab revenues of approximately $12 million.

However, the firm noted that it has resolved its prior manufacturing related issues — including global supply chain challenges, a tech transfer issue, and the need for additional hiring and training — and "is now in the process of normal scale-up," according to a statement.

As part of the organizational changes, OraSure announced that Stephen Tang, president and CEO, will be the leaving the company as of March 31.

Tang served as CEO of Bethlehem, Pennsylvania-based OraSure for four years and as a member of the board for 11 years. He will assist the board in a strategic review process and help to ensure an orderly transition of the CEO role, the firm said.

In addition, OraSure announced other organizational changes to the company.

It will adopt a vertically integrated business unit structure, with operations, R&D, and manufacturing now reporting to each of the respective business unit leaders.

The firm also announced that Lisa Nibauer will become president of the diagnostics business unit and Kathleen Weber will become president of molecular solutions. Nibauer joined OraSure in May 2020 after eight years at Becton Dickinson, while Weber has held various senior executive leadership roles at OraSure since joining the company in 2012, with prior leadership roles at Pfizer, Johnson & Johnson, and Schering-Plough.

The OraSure board of directors now intends to explore and evaluate "a broad range of strategic alternatives" with the goal of maximizing value for stockholders, the firm said.

"There can be no assurance that the exploration of strategic alternatives will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms," it said.

OraSure does not intend to make any further public comment regarding the review until it has been completed or the company determines that disclosure is required or appropriate, it also said.

Evercore is serving as OraSure's financial adviser and Troutman Pepper is serving as the company's legal adviser in this evaluation.

Separately, analysts at J.P. Morgan disclosed that due to the ongoing evaluation OraSure will not be presenting at its annual healthcare conference next week.

In Wednesday morning trading on the Nasdaq, OraSure's stock was up a fraction of a percent, to $8.20.

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