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Quidel Q3 Revenues Grow 22 Percent

This article has been updated from a previous version to include comments from Quidel's Q3 earnings call.

NEW YORK (GenomeWeb) — Quidel said after the close of the market on Tuesday that third quarter revenues grew 22 percent to $40.9 million from $33.5 million in Q3 2013, beating the average analyst estimate of $37.8 million.

The San Diego-based clinical diagnostics firm attributed the increase to greater sales of infectious disease products in Q3 and growth across all major categories, as well as a $2.8 million increase in grant revenue.

For the quarter ended Sept. 30, infectious disease products grew 17 percent, led by influenza products, sales of which increased 32 percent to $14.2 million. This growth was attributable primarily to a 107 percent increase in orders for the company's Sofia immunoanalyzer.

Meantime, women's health revenue was $8.8 million and gastrointestinal revenue was $2 million. In Q3 new product revenue increased 110 percent from the same quarter last year, Quidel noted.

While Quidel's Sofia and related flu tests are immunoassays, the company also saw revenue growth from its molecular products in Q3, and received additional grant funding from the Bill and Melinda Gates Foundation for the development of its sample-to-answer Savanna molecular diagnostics system, CEO Douglas Bryant said in a statement.

Further detailing these items in a conference call following release of the company's earnings, Bryant said that molecular sales "were a modest contributor to year-over-year revenue growth, led by AmpliVue C. difficile, which has been gaining traction, [and] helped by the introduction of AmpliVue Group A Strep, Group B Strep, and HSV 1 and HSV 2."

Bryant noted that in Q3 the company obtained FDA clearances for the its Lyra Parainfluenza, Lyra Adenovirus, Lyra Direct HSV 1+2/varicella-zoster virus, and Amplivue Group A Strep assays. "We believe that we will continue to gain traction with this product line … as customers finish validation studies and come online," he said.

Regarding the additional grant revenue increase, Bryant noted that in September Quidel executed an amendment to the Gates Foundation grant that provided additional milestone-based funding of $12.6 million through March 2016 to accelerate the development of Savanna in the developing world. Upon execution of the amendment, the company received $10.6 million in cash and recognized an additional $2.8 million in grant revenue in the third quarter.

Third-quarter R&D expenses at the company totaled $11.5 million, a 53 percent increase from $7.5 million in the year-ago quarter, primarily due to the added investment in Savanna. Meantime, SG&A expenses in Q3 rose 18 percent to $16.9 million from $14.3 million in Q3 2013.

In the quarter, Quidel recorded an impairment loss totaling $3.6 million related to its Stella (Bobcat) automated direct fluorescent assay analyzer and associated assets, which includes the write-off of in-process R&D, development software, and the associated manufacturing line, the company said.

Quidel's net loss for the quarter swelled 31 percent to $5.8 million, or $.17 per share, from $4.4 million, or $.13 per share, in Q3 2013. On a non-GAAP basis, its net loss for Q3 was $502,000, or $.01 per share, compared to $519,000, or $.02 per share, for the same period in 2013. The firm beat the consensus Wall Street estimate for a loss of $.12 per share.

Quidel ended the quarter with cash, cash equivalents, and restricted cash of $23.4 million.