NEW YORK – QuidelOrtho reported after the close of the market Thursday that its second quarter revenues rose 38 percent year over year, which the firm attributed in part to growth in its point-of-care and molecular diagnostics businesses.
On a call to discuss the results with analysts and investors, CEO Douglas Bryant and CFO Joe Busky highlighted that this was the first earnings report since the business combination between Quidel and Ortho Clinical Diagnostics was consummated at the end of May.
"We are finding that the two organizations balance each other quite well," Bryant said. "Quidel has proven to be agile and innovative. … Ortho, on the other hand, with its long history in the diagnostics market, has established global infrastructure and processes that enable its stable 93 percent recurring revenue," Bryant added.
As a newly combined company, QuidelOrtho reported total Q2 sales of $898.5 million, up from $669.1 million based on simulated combined revenues of the two business in Q2 2021, and well above analysts' consensus estimate of $598 million. Excluding COVID-19 products, revenue for the core business grew 9 percent, the firm noted.
QuidelOrtho reported its Labs business was flat at $342.0 million compared to $340.5 million in the year ago period, while Transfusion Medicine grew 4 percent to $168.8 million from $162.4 million.
The firm's Point-of-Care sales nearly tripled to $367.0 million from $131.7 million, attributed to sales of the firm's QuickVue COVID-19 rapid antigen and Sofia immunoassay tests and utilization of other respiratory tests on the firm's Sofia instruments.
"Since the pandemic began, we grew the Sofia installed base by approximately 90 percent," Bryant said on the call, noting that most of the instruments placed during the pandemic included three-year contracts for assays.
"Our non-COVID revenue per analyzer has grown significantly over the last year, which justifies the many R&D projects underway to further expand our Sofia test menu," he said, later specifying that the non-COVID revenue was up 25 percent year over year.
QuidelOrtho has also fulfilled its contract with the US government to provide 108 million COVID-19 rapid antigen tests, Bryant said, which contributed to approximately eightfold revenue growth for the QuickVue business.
Molecular Diagnostics, meanwhile, was down 40 percent to $20.7 million from $34.5 million. Excluding COVID-19 sales, Molecular Diagnostics grew 45 percent, which QuidelOrtho said was due to sales related to its Lyra, Savanna, and Solana products.
Regarding Savanna, QuidelOrtho has launched the instrument in Europe but has delayed US launch due to supply chain issues. The firm filed for Emergency Use Authorization with the US Food and Drug Administration for the system in May. It plans to file for 510(k) clearance at the end of the year and submit four additional assays in 2023.
Geographically, sales in North America grew 59 percent to $595.7 million from $375.3 million, while sales in EMEA declined 3 percent to $82.9 million from $85.7 million. Sales in China increased 22 percent to $96.1 million from $78.7 million. Sales in the Other category, which includes Japan, South America, and other areas, were down 4 percent to $123.8 million from $129.4 million.
Quidel posted Q2 net income of $19.3 million, or $.36 per share, compared to income of $19.1 million, or $.45 per share, for the second quarter of 2021. Its adjusted EPS for the quarter was $2.12.
The firm's R&D spending increased 51 percent to $34.2 million from $22.6 million, while SG&A expenses more than doubled to $118.4 million from $54.2 million in the prior year quarter. The firm also reported $80.2 million in acquisition and integration costs, $21 million related to amortization of intangible assets, and a $24 million loss related to extinguishment of debt.
Quidel finished the quarter with $379.0 million in cash and cash equivalents, and $52.5 million in marketable securities.
Including COVID-19 sales, company officials said on the call that the firm anticipates full-year revenue of $3.78 billion to $3.91 billion, or an increase of 3 percent to 5 percent at constant currency. QuidelOrtho also anticipates full-year influenza and combined influenza/COVID test revenues of between $200 million and $260 million.
Excluding COVID-19 sales, QuidelOrtho guided for full-year 2022 revenues of $2.49 billion to $2.57 billion, or an increase of 6 percent to 9 percent at constant currency.
In Friday morning trading on the Nasdaq, QuidelOrtho's shares were down 6 percent to $91.12.