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Quidel Q1 Revenues More Than Double but Miss Expectations

NEW YORK – Quidel reported after the close of the market on Thursday that its first quarter revenues more than doubled year over year, driven by PCR and rapid antigen COVID-19 tests.

For the three months ended March 31, revenues rose 115 percent to $375.3 million from $174.7 million in Q1 2020, in line with the firm's preliminary estimates but missing analysts' average estimate of $400.8 million.

The San Diego-based firm attributed the increase to strong demand for its rapid antigen and PCR-based COVID-19 tests, as well as, to a lesser extent, its cardiometabolic immunoassay products.

"The first quarter of 2021 was both a commercial and operational success, as well as a foundation-forming period for the transformational opportunities in the quarters and years ahead," said Quidel CEO Douglas Bryant in a statement.

Last month, the firm signed a distribution agreement with McKesson for its QuickVue At-Home OTC COVID-19 test. On Thursday, it announced a retail collaboration with Walgreens for the same test. Bryant noted that the partnerships will give Quidel "unprecedented exposure to the [over-the-counter] segment and fulfillment pathways to serve employers seeking a path to safely reopening."

Rapid immunoassay product revenues rose 148 percent year over year to $237.7 million from $95.9 million, primarily due to $212.1 million in revenue from Sofia SARS Antigen tests.

Cardiometabolic immunoassay revenues increased 24 percent in the quarter to $66.6 million from $53.9 million in the first quarter of 2020.

Molecular diagnostic solutions revenues increased more than sevenfold to $60.3 million from $8.4 million in the prior-year quarter due to sales of Lyra PCR assays for COVID-19 as well as Solana SARS-CoV-2 assays.

On a call with investors and analysts, Bryant said that the firm's Lyra business is stable, adding that Quidel is taking some customers from other vendors and is seeing gains in regional reference labs. "I hear other companies talking about the demise of PCR testing, but we're not seeing that," he said.

Meanwhile, specialized diagnostic solutions revenues decreased 34 percent year over year to $10.9 million from $16.5 million, driven by lower demand for respiratory products.

On the call, Quidel CFO Randy Steward noted that Quidel's total influenza revenue including antigen and molecular tests for the quarter was $5.2 million, compared to $79.6 million in the first quarter of 2020.

In the quarter, Quidel received Emergency Use Authorizations from the US Food and Drug Administration for its QuickVue At-Home COVID-19 Test for prescription use and its QuickVue At-Home OTC COVID-19 Test for serial at-home use without prescription and in asymptomatic people.

On the call, Bryant said that the firm recently submitted its first Savanna respiratory panel to the FDA for EUA and expects to submit a 510(k) package by the end of this year and then to pursue a CLIA waiver.

Quidel has also begun clinical trials for a high-sensitivity troponin assay on the Triage system, expects to soon submit an EUA to the FDA for a coronavirus antibody test on the Sofia 2 system, plans to introduce its Sofia Q analyzers in the coming months, and expects to submit a de novo 510(k) package for a placental growth factor assay in Q2.

Regarding the placental growth factor assay, Bryant said that the intended use claim could be for assessing placental health. However, "if we got something a little bit better, … physicians could use this as an aid in diagnosis of preeclampsia, or … as a predictor of preeclampsia," he said, adding that clearance for the latter would be "a huge growth driver."

Quidel's Q1 net income rose to $178.1 million, or $4.09 per share, from $40.2 million, or $.93 per share, in Q1 2020. On an adjusted basis, the company posted earnings of $4.38 per share, below the average Wall Street estimate of $4.71 per share.

The firm's Q1 R&D expenses rose 42 percent to $23.3 million from $16.4 million year over year, due to increased spending on the Savanna instrument development project as well as incremental labor and material costs associated with COVID-19 product development. Quidel's SG&A expenses increased 19 percent to $53.7 million from $45.1 million in the prior-year period, due to higher compensation costs driven by increased headcount as well as product promotions offset by reduced travel and trade show costs related to COVID-19 restrictions.

Quidel finished the first quarter with $981.1 million in cash and cash equivalents.

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