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Quidel Q2 Revenues up 12 Percent; Discloses New Life Tech Deal for PCR Assays

NEW YORK (GenomeWeb News) – Quidel reported after the close of the market on Wednesday that second-quarter revenues rose 12 percent year over year.

The San Diego diagnostics firm beat the consensus Wall Street estimate by posting revenues of $30.9 million for the three months ended June 30, compared to $27.5 million a year ago. Analyst estimates called for an average of $30.3 million in revenues.

R&D costs increased to $6.8 million, up 10 percent from $6.2 million a year ago, and SG&A spending was up 6 percent to $12.8 million from $12.1 million.

Net loss for the quarter improved to $3.1 million, or $.09 per share, matching the consensus Wall Street estimate. A year ago, the company had a net loss of $3.7 million, or $.11 per share.

Quidel exited the second quarter with $19.9 million in cash and cash equivalents.

On a conference call following the release of the company's earnings, Quidel President and CEO Douglas Bryant said that the firm had recently entered into a partnership with Life Technologies to develop and commercialize real-time PCR assays on a new molecular instrument system that is yet to launch. Many of the assays being developed, he added, will also be portable to Quidel's Project Wildcat a fully automated, PCR-based testing system that it is developing with researchers from Northwestern University and the NU Global Health Foundation.

Quidel will receive certain payments from Life Tech as early as the third quarter, Randall Steward, Quidel's CFO, said, but provided no further details.

On Project Wildcat, Bryant said that Quidel remains on track and the primary focus is on keeping its commitment to NU Global Health Foundation to develop an inexpensive, fully integrated molecular that can lower the cost of HIV viral load and tuberculosis testing in Africa in 2014.

The key is completing development of a low-cost cartridge and the firm has met a number of early development milestones. The company anticipates having the cartridge design completed by the end of 2012, Bryant said.

On the call, Bryant also said that work on Quidel's Bobcat automated direct fluorescent assay analyzer has been delayed for one year due to "the breadth of the clinical trial work." The prevalence for all virus types, he said, "was just not high enough in the first quarter of this year as we were attempting to complete the US clinical trial. In particular the number of flu B positives was just too low."

Quidel's AmpliVue C. difficile assay received CE marking in March for use on the hand-held molecular instrument, and during the second quarter, the company completed clinical trials in the US. It has been building inventory for a launch in Europe in the fall with a US launch expected before the end of the year, Bryant said.

Additionally, he said that clinical trials are being conducted now in the US for its direct specimen PCR assay for C. difficile. The assay received CE marking in April.

Clinical trials for respiratory syncytial virus and human metapneumovirus molecular assays were completed while assays for Herpes simplex virus and other viruses remain in development and are on track to enter clinical trials in the second half of this year with other PCR assays to "follow shortly," Bryant said.

In morning trading today, shares of Quidel were up 3 percent to $16.19 on the Nasdaq.

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