NEW YORK – OraSure Technologies reported after the close of the market on Tuesday that its first quarter revenues increased 16 percent year over year driven by 21 percent growth in non-COVID revenues.
For the three months ended March 31, the Bethlehem, Pennsylvania-based company reported total revenues of $67.7 million, up from $58.6 million in Q1 2021 and above the consensus Wall Street estimate of $60.2 million.
Total product and service revenues for the company's molecular business unit declined 33 percent to $29.4 million during the first quarter of 2022 from $44 million in Q1 2021.
On a call with investors, interim CEO Nancy Gagliano said OraSure has made substantial progress on its InteliSwab manufacturing scale-up. It hired an operations consulting firm used by the National Institutes of Health's RADx program "with deep expertise in manufacturing scale of rapid antigen tests," Gagliano said. "This team made significant progress during the quarter, identifying major bottlenecks and areas for efficiency improvements," she said, which led to a greater than fourfold increase in test production.
Within the molecular business, the firm's COVID-19 testing-related sales were $8.9 million, down 68 percent from $28.0 million a year ago. The revenues decline was attributed to lower testing volumes as the market transitions to point-of-care solutions and customers work through current inventory levels of sample collection devices for COVID-19 PCR testing.
Also within the molecular business genomics revenues in the molecular business in Q1 increased 40 percent year over year to $15.1 million from $10.8 million. Total laboratory service revenues in the molecular business unit were $1.7 million, a decline of 31 percent from $2.5 million in the first quarter of 2021, while microbiome revenues increased 11 percent to $2.0 million from $1.8 million.
The firm also saw 50 percent growth in its commercial genomics sample collection kit business, which Kathleen Weber, president of OraSure's molecular solutions business, attributed on the call to customers resuming their genetic risk testing and population health initiatives, customers supplementing saliva as a sample type for some blood-based tests due to blood tube shortages, and some changes to order patterns by key accounts.
Within the diagnostics unit, OraSure said that domestic HIV revenues fell 29 percent year over year to $3.8 million from $5.3 million. International HIV sales increased 26 percent to $4.4 million from $3.5 million. Total HIV revenues dipped 7 percent to $8.2 million from $8.8 million. Domestic hepatitis C virus test revenues jumped 67 percent to $2.0 million from $1.2 million, while international HCV revenues were relatively flat at $1.2 million. Total HCV revenues increased 38 percent to $3.3 million from $2.4 million.
The firm also registered $22.1 million in revenues within the diagnostics business unit associated with sales of its COVID-19 InteliSwab rapid test.
Excluding InteliSwab revenues, the diagnostics legacy revenues were $16.2 million and grew 11 percent compared to the prior year quarter, OraSure said.
On the call, Lisa Nibauer, president of the diagnostics business, said that the domestic HIV test business declined solely due to discontinuation of a US Centers for Disease Control and Prevention program called Let's Stop HIV Together in which OraQuick In-Home HIV test kits were shipped directly to consumers. However, the CDC recently issued a $33 million grant opportunity notification specifically for the mass mailing of HIV self-test to people disproportionately affected by HIV in the US, she said, with an estimated award and start date of Sept. 30, 2022. The award would be granted to various aid agencies which would then procure the tests.
"Given that OraSure is the only FDA-approved OTC HIV self-test in the United States, we would expect to benefit from this award via the partner's bidding on its execution," Nibauer said, which "could lead to several quarters of strong HIV sales in late 2022 and early 2023."
Furthermore, Nibauer said that OraSure continues to receive "large consistent orders weekly" from its $205 million procurement contract with the US government.
In the quarter, OraSure received US Food and Drug Administration de novo authorization for the OMNIgene-GUT Dx microbiome collection device and commercially launched the product. It also launched a service to provide metatranscriptomic sequencing and analysis of gut microbiome samples through its Diversigen subsidiary. And, it launched its HIV self-test into six European countries, including the UK, Germany, France, Spain and Portugal, where the test will be available in retail pharmacies.
Regarding the metatranscriptomic sequencing service, Weber said OraSure will now embark on a series of marketing activities involving Illumina, "including Illumina-invited speaker engagements, joint webinars with Illumina guests, and co-publication with Illumina researchers of relevant development and validation work."
in Q2, OraSure plans to launch a research-use kit called the OMNIgene-Gut RNA DNA kit as well as a species-specific curated database to improve the interpretation of the composition and function of the microbiome in dogs, called Medigene k9.
OraSure's net loss for the first quarter was $20.0 million, or $.28 per share, compared to a net income of $3.8 million, or $.05 per share, for Q1 2021. The analysts' average estimate was for a loss of $.09 per share.
The company's Q1 R&D costs decreased 7 percent to $8.4 million from $9.0 million a year ago, and its SG&A costs increased 62 percent year over year to $31.9 million from $19.7 million.
OraSure ended the quarter with $70.7 million in cash and cash equivalents and $41.5 million in short-term investments.
The company said it is not providing guidance for Q2 due to its ongoing strategic review process started in January. It said no decisions have yet been made.
"Regardless of which path the company ends up taking, we remain highly optimistic about our ability to create value and be a market leader in the areas of simple, reliable point of care and home test, as well as innovative and easy-to-use sample collection techniques," Gagliano said. "As an organization, we remain focused on improved execution and driving profitable growth, with a number of programs in place to improve our long-term cost structure and margin profile," she added.
In early morning trading on the Nasdaq on Wednesday, OraSure's shares were down about 6 percent at $4.96.