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Quidel Q3 Revenues Up 5 Percent on Women's Health, MDx Sales

NEW YORK (GenomeWeb) – Quidel reported after the close of the market on Wednesday that its third quarter revenues rose 5 percent year over year, driven by higher grant revenue and sales of women's health and molecular products.

For the three months ended Sept. 30, revenues increased to $49.3 million from $46.8 million in Q3 2015. However, reported revenues missed the average analyst expectation for revenues of $50.9 million.

On a call with analysts following the release of the earnings, Quidel President and CEO Douglas Bryant noted that the number of Sofia immunoassay instruments shipped in Q3 rose 37 percent over the prior year period, adding that it was "one of our larger placement quarters since the launch of Sofia."

Overall, he further noted, "our Sofia business has been a home run for us, appears to be robust, and with Vitamin D, Lyme and other assays, and Sofia 2 [a point-of care immunoassay platform in development]," the Sofia business is likely to grow as projected to around 30,000 instruments.

Quidel's molecular business revenue grew 103 percent over the prior-year quarter, as "several larger customers went live," Bryant said.

He further noted that revenue numbers driven by shipments to distributors in advance of an uncertain respiratory season are not necessarily a lagging indicator of commercial performance. More suitable leading indicators of Quidel's commercial performance potential include Solana molecular instrument placements for Group A Strep confirmatory testing, which "were noticeable in the quarter," and clearances to market Solana products in the US, he added.    

The firm said that it received 510(k) clearance from the US Food and Drug Administration to market the Solana Strep Complete Assay for rapid and qualitative detection and differentiation of Streptococcus pyogenes (Group A beta-hemolytic Streptococcus) and Streptococcus dysgalactiae (pyogenic Group C and G beta-hemolytic Streptococcus).

The clearance marks Quidel's fourth molecular diagnostic test to receive 510(k) clearance from the FDA for the Solana platform. The Solana Influenza A and B test received 510(k) clearance in September, the Solana Trichomonas assay was cleared in August, and the Solana Group A Strep assay was cleared in June 2015.

Infectious disease revenues – which include sales of the firm's QuickVue, Sofia, DFA cell culture, and molecular products – slipped 2 percent because of a dip in influenza revenue that was partly offset by Strep A product sales. Influenza revenues – including sales of the firm's Sofia, QuickVue, and DHI Respiratory products – decreased 9 percent to $19.9 million dollars, and QuickVue and Sofia Influenza inventory at distribution was down 26 percent from Q3 2015.

Leading indicators aside, shipments to distribution of rapid immunoassay test products in September were softer than the firm would have liked, Bryant said. "At the end-user level, many of our larger customers, given lighter respiratory disease prevalence in Q1 of this year, did not burn through a significant portion of the inventory that they had purchased previously," he added.

In Q3, total Strep A revenue grew 19 percent to $7.7 million dollars, driven by revenue growth from sales of Sofia, Solana, and Lyra assay products. Respiratory syncytial virus total product sales fell 11 percent to $1.4 million. Inventories at distribution were down 38 percent compared to last year because of the timing of orders, the firm said.    

Women's health revenues increased 7 percent to $10.2 million.

Revenues from Thyretain, a high margin Graves’ disease product, grew 7 percent over the prior year quarter, and the firm's bone health and complement pathway assay business grew 21 percent due to the acquisition of Immutopics earlier in the year.

Quidel's gastrointestinal product category revenues were $1.7 million in Q3, and other revenues were $4.7 million.

Quidel also received a final milestone-based cash payment of $3.8 million dollars from the Bill and Melinda Gates Foundation. 

Quidel's Q3 net loss narrowed to $572,000 from $762,000 a year earlier. Net loss per share stayed flat at $.02. On an adjusted basis, the company reported earnings per share of $.10, beating the Wall Street estimate of a loss of $.02 per share.

The firm's R&D costs rose 5 percent year over year to $8.8 million from $8.4 million, and its SG&A costs increased 2 percent to $18.5 million from $18.0 million a year earlier.

Quidel finished the third quarter with $153.4 million in cash, cash equivalents, and restricted cash.

The firm's shares were down nearly 3 percent to $20.86 in morning trading on the Nasdaq.