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Flu Season Pushes Quidel Q4 Revenues up 40 Percent

NEW YORK (GenomeWeb News) – An early and severe flu season drove Quidel's fourth-quarter revenues up 40 percent year over year, the company reported after the close of the market on Tuesday.

For the three months ended Dec. 31, 2012, Quidel posted $53.9 million in revenues, up from $38.4 million a year ago, and topping the consensus Wall Street estimate of $53.3 million. Flu-related products brought in $26.3 million in revenues during the quarter, company officials said.

Quidel said early last month that fourth-quarter revenues would fall between $53.0 million and $54.0 million.

Quidel President and CEO Douglas Bryant said in a statement that the flu season benefitted sales of its QuickVue Influenza A+B test the most, but he added that Quidel's molecular PCR products, its Sofia immunoassay platform, and the D3 respiratory virus screening and ID products also contributed to the year-over-year revenue growth.

"More importantly, our product development teams achieved several key milestones during the period, and we are now poised to introduce a number of new products over the next several quarters," he said.

On a conference call after the release of the company's earnings results, Bryant said that Quidel is cleared by the US Food and Drug Administration to market the PCR-based Quidel Molecular Influenza A+B and Quidel Molecular hMPV. In development or submitted to the FDA are "several more" PCR assays, including seven that the company hopes to launch in 2013.

He did not identify what disease indications those seven assays would target, but at last month's JP Morgan Healthcare Conference Bryant said that among those that Quidel expects to launch this year are tests for RSV human metapneumovirus, C. difficile, and pertussis.

The San Diego-based firm's profit in the fourth quarter shot up to $8.7 million, or $.26 per share, from a profit of $958,000, or $.03 per share, a year ago. On an adjusted basis, EPS of $.37 handily beat the average analyst estimate of $.17.

The firm's R&D costs increased 7 percent to $7.3 million from $6.8 million in the fourth quarter of 2011, while SG&A expenses increased 6 percent to $13.2 million from $12.4 million.

Among the highlights for the quarter was approval from the FDA for Quidel's C. difficile test on its AmpliVue handheld molecular diagnostic testing device.

On the call, Bryant said that three assays are currently in development for the AmpliVue system, as well as a next-generation cartridge platform the firm hopes to launch in October.

Since AmpliVue received FDA clearance in December, molecular specialist directors in hospital systems were trained in January, and general account managers were trained only last week. Quidel has taken orders for the system, the instrument has been shipped to some early adopters, and a number of side-by-side comparisons of AmpliVue with "the usual suspects out there" are under way, Bryant said.

"And I would say that we're encouraged by the initial reception, so far," he said. The average sales price for the C. difficile assay is "north of $20," Bryant added.

During the quarter, Quidel also received an $8.3 million grant from the Bill and Melinda Gates Foundation to develop, manufacture, and validate a quantitative, low-cost nucleic acid assay for HIV drug treatment monitoring on its Savanna platform, which the firm also calls Project Wildcat.

The system is in development in collaboration with the Northwestern University Global Health Foundation.

Revenues for full-year 2012 were down 2 percent to $155.7 million from $158.6 million in 2011, but still edged out the average Wall Street estimate of $155.1 million. The decline was due primarily to a 1 percent year over year dip in infectious disease products in 2012 as the first half of the year saw a comparatively milder flu and respiratory virus season from the year-ago period, Quidel CFO Randall Steward said on the call.

Its profit for the full year was down to $5.0 million, or $.15 per share, from a profit of $7.6 million, or $.23 per share, in 2011. Adjusted EPS was $.56, surpassing the consensus analyst estimate of $.06.

Quidel's R&D expenses for 2012 were $27.7 million, up 5 percent year over year from $26.3 million. Its SG&A costs also were up 5 percent to $51.0 million from $48.5 million.

Quidel ended 2012 with $17.0 million in cash, cash equivalents, and restricted cash.

"Even though the revenue impact of an early start to the influenza season was a positive for our quarter and year, our focus lies in diversifying our company's revenue mix and creating other growth opportunities," Bryant said. "Our efforts are reflected, noticeably, in the increase in 2012 of R&D and sales and marketing expenses ahead of the launch and commercialization of AmpliVue C. difficile and several other Sofia and Quidel molecular products in 2013."