NEW YORK – OraSure Technologies said after the close of the market on Tuesday that fourth quarter revenues in its core business increased a fraction of a percent year over year. Total revenues for the Bethlehem, Pennsylvania-based diagnostics maker declined 38 percent in Q4, due primarily to a 53 percent drop in COVID-related revenues, but exceeded Wall Street's expectations.
OraSure also announced a semi-exclusive distribution agreement with New Jersey-based Diagnostics Direct for that firm's Syphilis Health Check, a 10-minute CLIA-waived point-of-care syphilis immunochromatographic assay.
In addition, the firm disclosed new distribution partnerships with Veriteque for a concealed substances test called SwabTek and with Anaerobe Systems for that firm's microbiome testing portfolio. OraSure also signed a multiyear agreement with GeneDx to provide saliva collection devices for pediatric exome and genome testing.
For the three months ended Dec. 31, OraSure reported $75.9 million in revenues, down from $123.1 million a year ago but above the consensus Wall Street estimate of $74.1 million.
Core business revenues, which exclude COVID-19 revenue, were $34.2 million, up a fraction of a percent from $34.1 million in Q4 2022. COVID-19 related revenues declined to $41.7 million from $89.0 million a year ago.
"Our agreement with Diagnostics Direct allows us to enter the US syphilis testing market," OraSure's CEO Carrie Eglinton Manner said on a call to discuss the Q4 results. The agreement stipulates that OraSure will serve all channels and customers, aside from a defined group of clients whom Diagnostics Direct will continue to directly support, she added.
"We are excited to add Syphilis Health Check to our sexual health portfolio, and we view it as an important tool in the nation's response to syphilis as a public health crisis and for clinical care more broadly," she said.
The pandemic led to rising rates of mother-to-child syphilis transmission, with new laboratory recommendations from the US Centers for Disease Control and Prevention highlighting the need for more POC testing. The Diagnostics Direct test is one of two rapid tests cleared by the US Food and Drug Administration to detect Treponema pallidum, the bacterial pathogen that causes syphilis.
As part of a broader strategy to capitalize on its manufacturing and distribution capabilities, OraSure in January invested $30 million in Sapphiros, a consumer diagnostics startup, and signed a strategic distribution deal for that firm's immunoassays and molecular tests, which use printed electronics. OraSure expects sales of Sapphiros' tests to be accretive to profits beginning in 2026 after incremental increases in SG&A expenses to launch the products in 2024 and 2025.
OraSure's research and development expenses in the fourth quarter declined approximately 13 percent to $7.0 million from $8.1 million in Q4 of 2022, while SG&A spending was down 23 percent to $20.9 million from $27.3 million.
Net income in Q4 was $20.1 million, or $.27 per share, compared to net income of $15.8 million, or $.22 per share, a year ago. Non-GAAP EPS for Q4 2023 was $.22, well above the consensus Wall Street estimate of $.08 per share.
For full-year 2023, the company recorded revenues of $405.5 million, up 5 percent from $387.5 million in 2022 and beating analysts' average estimate of $403.8 million.
Core business revenues grew 2 percent to $147.7 million from $144.2 million in the prior year. COVID-19-related revenues increased 6 percent year over year to $257.8 million from $243.3 million.
OraSure's research and development expenses in 2023 declined approximately 7 percent to $33.7 million from $36.2 million, while SG&A spending was down 20 percent to $94.5 million from $117.4 million.
OraSure reported net income for 2023 of $53.7 million, or $.72 per share, versus a net loss of $17.1 million, or $.24 per share, in 2022. Non-GAAP EPS for 2023 was $1.04, well above the consensus Wall Street estimate for EPS of $.54.
The company ended 2023 with $290.4 million in cash and cash equivalents. The $65.5 million increase in cash balance during the fourth quarter was driven by improved operational performance as well as $24.4 million from the US government related to a manufacturing expansion contract. OraSure was previously awarded $109 million from the US Department of Defense and approximately $5.7 million from the US Department of Health and Human Services to scale up COVID-19 test manufacturing.
For Q1, OraSure expects revenues between $50 million and $54 million, including core revenues of $29 million to $31 million and InteliSwab revenues of $21 million to $23 million. OraSure also said it expects approximately $40 million in InteliSwab revenues in the first half of 2024 and that it remains on track to achieve operating cash flow breakeven for its core business by the end of 2024.
"For the full-year 2024 and beyond, we remain confident in our opportunity to deliver core growth," Manner said, citing expectations for increased contributions from distribution agreements; new customer relationships in diagnostics, pharma, and biotech; ordering patterns for sample management solutions; and underlying market growth in the life sciences industry in the second half of the year.
Shares of OraSure were up 11 percent to $7.79 in Wednesday morning trading on the Nasdaq.