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Quidel's Q1 Revenues Fall 18 Percent on Weak Flu Season, Beat Estimates

NEW YORK (GenomeWeb) – Quidel reported after the close of the market on Wednesday that its first quarter revenues decreased 18 percent year over year due to a delayed and weak influenza season.

For the three months ended March 31 revenues decreased to $50.3 million from $61.7 million in Q1 2015, but beat the average analysts' estimate of $49.2 million.

The San Diego-based firm said that total influenza revenues were down 40 percent versus the year-ago period to $20.1 million. This contributed to a 25 percent decrease in infectious disease product revenues.

Women's health and gastrointestinal revenues were flat relative to the previous year at $9.1 million and $1.7 million respectively.

In a statement, Quidel President and CEO Douglas Bryant said these results were offset somewhat by market share gains from placements of the firm's Sofia immunoassay systems.

"Revenues for the quarter were $16.1 million lower than our internal annual operating plan model, which had assumed a normal respiratory disease season pattern and volume, and took into consideration the market share gains that we had experienced with the placement of numerous Sofia analyzers throughout 2015," Bryant said.

He later added, "We certainly don't think that we need to apologize for the quarter," noting that the most recent time a flu season that started as late, peaked, and subsided as quickly was 2009. At that time, QuickVue influenza was Quidel's main provider of cash and margin and the firm was more vulnerable and susceptible to wild swings in performance, Bryant said.

"If this were Q1 2009, with the season you just saw, our sales would have been about $17 million in total, and our flu sales would be $2.3 million ... clearly, we have made some progress ... because other non-flu parts of our business have grown organically and through acquisitions."

During the quarter, Quidel's Diagnostics Hybrids subsidiary acquired Immutopics, a California-based supplier of research and scientific assays of bone health, for $5.5 million. The firm also received CE-marking for a Sofia immunoassay for pneumococcal pneumonia and pneumococcal meningitis.

Quidel posted a net loss of $3.4 million, or $.11 per share, in Q1 2016, compared to a profit of $4.0 million, or $.11 per share, in the year-ago quarter. On a non-GAAP basis, EPS was $.02, above the average Wall Street estimate of a loss of $.07 per share.

The company increased its R&D costs 57 percent year over year to $12.7 million from $8.1 million, primarily due to increased product development costs associated with its Savanna, Sofia, and Solana platforms. It decreased its SG&A costs slightly to $19.6 from $21.2 million.

Quidel finished the first quarter with $153.4 million in cash, cash equivalents, and restricted cash.