NEW YORK – OraSure Technologies reported after the close of the market on Tuesday that its second quarter revenues dropped sharply year over year due in part to a decrease in revenues from COVID-19 testing and from the molecular services business the firm is exiting.
For the quarter ended June 30, total revenues for the Bethlehem, Pennsylvania, diagnostics maker were down 36 percent to $54.3 million from $85.4 million in Q2 2023, mostly due to the decline in COVID testing-related sales, but above the average Wall Street estimate of $52.1 million.
The firm's core revenues decreased 7 percent to $35.4 million in Q2 from $37.9 million in the year-ago period.
"Our second quarter core revenue showed sequential improvement, and we anticipate further progress in Q3," Carrie Eglinton Manner, president and CEO of OraSure, said in a statement. "We continue to strengthen our foundation, elevate our core business, and accelerate our profitable growth through investments in innovation while maintaining focus on cost efficiency and margin expansion."
Diagnostics revenue in the second quarter decreased 5 percent year over year to $18.7 million from $19.8 million.
Molecular sample management solutions revenue decreased 3 percent to $12.6 million from $13.1 million.
Revenue for the molecular services business that OraSure is winding down declined 40 percent to $810,000 from $1.4 million a year ago. OraSure has previously said it will exit its Diversigen microbiome lab and analytical sequencing services business by the end of Q3 2024.
The firm's COVID-19 diagnostics-related revenue dropped 60 percent to $18.9 million from $47.5 million, in line with the firm's expectations and partially related to a tapering in volumes under its largest US government contract.
Revenue not related to products and services declined 45 percent to $386,000 from $703,000.
During the quarter, OraSure attained prequalification status from the World Health Organization for its hepatitis C virus assay, the OraQuick HCV Self-test. It is the first HCV self-test to earn this designation from the WHO.
OraSure also received clearance from the US Food and Drug Administration for new packaging and labeling of its OraQuick HIV Self-test. The firm expects the new packaging to reduce plastic use and increase shipping efficiency and said that the updated labeling includes information regarding linkage to care, treatment options, and preventive therapies.
The firm also said that it generated positive momentum in the quarter for the Diagnostics Direct Syphilis Health Check assay launched in Q1 that it is distributing, and that it expanded the use of its collection devices into saliva-based liquid biopsy through broadening its relationships with several oncology companies in the quarter.
OraSure recorded a net loss for the second quarter of $615,000, or $.01 per share, compared to a net loss of $4.8 million, or $.07 per share, for the second quarter of 2023. On an adjusted basis, OraSure had earnings per share of $.07, beating the average Wall Street estimate of a loss of $.03.
It lowered its R&D spending 14 percent to $6.6 million from $7.7 million and trimmed its SG&A costs 21 percent to $19.8 million from $25.0 million. OraSure also reported a loss on impairments during the quarter of $1.1 million versus $215,000 for Q2 2023.
The firm said it remains on track to achieve operating cash flow breakeven for the core business by the end of 2024.
OraSure guided for Q3 2024 revenues of $37 million to $41 million, including core business revenues of $36 million to $39 million and COVID-19 InteliSwab test revenues of $1 million to $2 million.
The firm ended the quarter with $258.2 million in cash and cash equivalents and $9.1 million in short-term investments.