NEW YORK – Quidel reported after the close of the market on Thursday that its third quarter revenues rose 7 percent year over year.
For the three months ended Sept. 30, the San Diego-based firm's revenues increased to $509.7 million from $476.1 million in Q3 2020, beating the average analyst estimate of $376.8 million. Quidel had previously issued preliminary revenues in the range of $505.0 million to $510.0 million.
The increase was driven primarily by increased sales of COVID-19 diagnostic tests, led by QuickVue At-Home OTC COVID-19 Test, and strong sales of Sofia SARS and Lyra PCR COVID-19 tests, the firm said.
Excluding COVID-19 and influenza products, revenue for the core business increased 2 percent to $93.3 million in the third quarter of 2021 compared to $91.4 million in the third quarter of 2020, Quidel said.
"We delivered strong top-line growth in the third quarter of 2021, meeting increased demand for our SARS category products due to the sudden increase in COVID-19 cases associated with the Delta variant," Quidel CEO Douglas Bryant said in a statement.
"While we are pleased to see COVID-19 cases trending down, we still see the need for symptomatic and asymptomatic testing and anticipate that a baseline level of demand will continue into early 2022. Our expectations are bolstered by consumer, corporate and institutional purchasing and the 12-month agreement to supply over $500 million in QuickVue At-Home OTC COVID-19 Tests to the federal government," he added.
Quidel's molecular diagnostic solutions business revenue declined 13 percent to $54.8 million from $63.0 million a year ago, which the company attributed to a $14.3 million decline in sales of Lyra PCR assays for COVID-19 diagnosis that was partially offset by incremental revenue from the firm's Solana SARS-CoV-2 assay.
Rapid immunoassay product revenue — which includes revenue from the QuickVue, Sofia, and Eye Health products — increased 12 percent in the quarter to $378.7 million from $337.0 million in Q3 of 2020, driven primarily by continued demand for the firm's Sofia SARS and QuickVue SARS antigen assays.
Revenue from the cardiac immunoassay business segment, which includes Triage, Triage Toxicology, and the Beckman BNP products, was flat year over year at $64.8 million. Specialized diagnostics solutions revenues increased 2 percent to $11.4 million from $11.2 million.
On a call with analysts and investors after the earnings were released, Bryant noted that the firm has broadened its installed base of Sofia analyzers to just over 74,000 instruments. He further highlighted that Quidel shipped more than 45 million SARS tests in the third quarter of 2021 across all platforms, adding that the firm has "strengthened our beachhead for COVID testing in the retail segment, partnering with Walgreens and CVS to grow our presence in pharmacies."
There has been no significant stocking by distributors of Quidel's influenza tests to date, Bryant said on the call. "We remain poised to meet the needs of the market should a normal flu season arrive," he said.
Bryant also pointed to "manufacturing constraints" limiting the firm's ability to supply all potential customers beyond its $500 million in federal contracts and the over-the-counter pharmacy space. Quidel has a new manufacturing facility, dubbed Rutherford, and Bryant said that supplying larger volumes "depends on how quickly we are able to validate and fully scale our manufacturing capacity."
In a 10-Q filing with the Securities and Exchange Commission, Quidel specified that Rutherford is a manufacturing facility in Carlsbad, California, for which the firm signed a 15-year lease agreement in January, with a lease liability of $39.4 million. In August, Quidel also purchased a general partner's interest in its McKellar Court facility in San Diego for a net purchase price of $28.9 million, which was acquired using cash on hand, according to the filing.
Quidel's Q3 net income was $215.8 million, or $5.08 per share, compared to a net income of $232.3 million, or $5.33 per share, in the prior-year quarter. On an adjusted basis, the company reported EPS of $5.36, well above the consensus Wall Street estimate of $3.52.
The company's R&D costs climbed 11 percent to $23.7 million from $21.4 million in Q3 of 2020, which Quidel attributed to increased spending on the Savanna instrument and cartridge development in support of US clinical trials. The firm's SG&A costs jumped 26 percent to $67.9 million from $53.8 million a year ago.
Quidel finished the third quarter with $578.4 million in cash and cash equivalents.