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OraSure Q3 Revenues Fall 22 Percent; Firm Announces $12M All-Cash Buy of Diversigen

NEW YORK – OraSure Technologies reported after the close of the market on Wednesday that its third quarter revenues fell 22 percent year over year as overall product revenues declined 19 percent.

The firm also announced it will acquire Diversigen, a Houston-based microbiome and metagenomics consulting, sequencing, and data analysis service provider, for a cash purchase price of $12.0 million and the potential for an additional earn-out payment tied to revenue performance.

For the three months ended Sept. 30, the point-of-care diagnostics company reported total revenues of $36.0 million, down from $45.9 million in the prior-year quarter.

"Despite the headwinds during the third quarter, we remain optimistic about our future, as we continue to execute on our innovation-driven strategy, using our strong bottom line and healthy cash balances," OraSure President and CEO Stephen Tang said in a statement. 

"The acquisition of Diversigen will extend our leadership position as an end-to-end provider of microbiome products and services," Tang also said.

The firm's product revenues for the quarter fell 19 percent to $35.3 million from $43.5 million in Q3 2018. Within products, molecular collections systems revenues decreased 31 percent to $18.3 million from $26.6 million, which included a 41 percent drop in revenues from genomics products to $14.1 million from $23.8 million, offset by an 81 percent increase in microbiome product revenues to $3.1 million from $1.7 million. 

The firm's Q3 revenues from infectious disease testing increased 9 percent to $13.6 million from $12.4 million a year earlier. Risk assessment testing revenues rose 17 percent to $3.3 million from $2.8 million, and cryosurgical systems revenues fell 64 percent to $961,000 from $2.8 million.

Within infectious disease testing, sales of OraQuick tests for HIV and hepatitis C were up 10 percent to $13.3 million from $12.0 million in Q3 2018. Total HIV sales rose 16 percent to $10.2 million from $8.8 million — domestic HIV testing sales fell 4 percent to $4.3 million from $4.5 million, but this was offset by a 36 percent increase in international HIV testing sales to $5.9 million from $4.3 million.

Total HCV testing sales declined 4 percent to $3.1 million from $3.2 million in the year-ago quarter — a 4 percent decrease in domestic HCV testing sales to $2.0 million from $2.1 million and a 3 percent decrease in international HCV testing revenues to $1.1 million from $1.2 million. 

The firm's Q3 net income grew to $13.1 million, or $.21 per share, from $8.1 million, or $.13 per share in the year-ago period. 

OraSure's R&D expenses for the quarter rose 20 percent to $4.6 million from $3.9 million in Q3 2018, and its SG&A costs increased 19 percent to $16.6 million from $13.8 million.

The company ended the quarter with $85.5 million in cash and cash equivalents and $78.2 million in short-term investments.

For the full year the company expects net revenues of $150 million to $153 million and net income of $.28 to $.31 per share.

OraSure's shares were down approximately 1 percent to $8.81 in Thursday morning trading on the Nasdaq.

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