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AnDiaTec Buy to Bolster Quidel's Real-Time PCR Test Menu as MDx Business Grows

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Quidel disclosed yesterday that it has acquired AnDiaTec, a German molecular diagnostics company, for approximately $2.6 million upfront and a three-year, $4.7 million R&D earn-out.

Quidel said that it expects the acquisition to broaden its molecular expertise and further accelerate its molecular assay development.

In particular, AnDiaTec has 18 CE-marked real-time PCR assays for infectious disease that would complement Quidel's existing real-time PCR assay portfolio and could be prepared relatively soon for regulatory submission to the US Food and Drug Administration, Quidel President and CEO Doug Bryant said this week during a conference call recapping Quidel's third quarter earnings.

"In addition to internally developed products that are nearing the clinical trial phase … [AnDiaTec] has developed a number of assays … [that] fill pretty significant gaps that we’ve been told by our scientific advisory board and others exist," in the US, Bryant said. In addition, he added, the acquisition allows Quidel to accelerate its PCR assay product development as it works toward a 2015 commercialization date for Savanna MDx, the company's cartridge-based, sample-to-answer molecular diagnostics platform.

Quidel reported this week that its Q3 revenues inched up nearly 2 percent to $33.5 million from $33 million in the year-ago period. While the company noted the impact of its immunoassay-based flu, Strep A, and pregnancy products on these results, it did not break out revenues for its comparatively fledgling molecular diagnostics business.

The company continues to build out its molecular business, however, and the AnDiaTec acquisition provides another piece to the puzzle.

Founded in 2003, AnDiaTec sells in vitro diagnostics based on real-time PCR, conventional PCR, and antibody-antigen detection for human, veterinary food safety, and environmental applications, according to the company's website.

Its real-time PCR-based human diagnostic portfolio includes diagnostic kits for norovirus, enterovirus, herpes simplex virus 1 and 2, Epstein-Barr virus, varicella zoster virus, Chlamydia pneumonia, and Mycobacterium tuberculosis complex. According to the company, these kits can be run on various real-time PCR systems from firms such as Applied Biosystems (Life Technologies), Roche, Stratagene (Agilent) Qiagen, BioRad, and Cepheid.

Quidel and Life Tech currently have an ongoing agreement to develop and commercialize real-time PCR assays for Life Tech's QuantStudio Dx system. In addition, under a previously signed agreement, Life Tech is marketing in Europe some of Quidel's PCR-based assays for use on the ABI 7500 Fast Dx Real-Time PCR system — one of the instruments that is compatible with AnDiaTec's kits.

Quidel already sells US Food and Drug Administration-approved and CE-marked assays for influenza A/B, respiratory syncytial virus/human metapneumovirus, Clostridium difficile, and HSV 1+2/VZV.

As such, it appears that Quidel already sells assays for targets covered by two of AnDiaTec's existing kits: HSV 1+2 and VZV. But the remaining tests — and whatever AnDiaTec has in its development pipeline — should help Quidel quickly build out its infectious disease MDx portfolio.

Molecular pipeline

Quidel also sells a line of handheld lateral flow- and isothermal amplification-based diagnostics under the brand name AmpliVue. Currently the only such test available in the US and Europe is for Clostridium difficile. But the company is also developing AmpliVue tests for a number of other targets, and its efforts in this area were bolstered by the acquisition in May of BioHelix, whose helicase-dependent amplification technology Quidel had been using in its AmpliVue tests (PCR Insider 5/9/2013).

During this week's call, Bryant noted that the acquisition of BioHelix "has greatly accelerated product development and we expect to launch more assays over the next couple of quarters, and believe that the additional assays will create a collateral benefit in topline acceleration." The company is also wrapping up clinical trials for two additional AmpliVue products and expects to submit regulatory packages to FDA "imminently," Bryant said, followed closely by two additional assays.

The company previously disclosed that its AmpliVue development pipeline includes tests for herpes simplex virus, Bordetella pertussis, Group B Streptococcus, and trichomonas.

During this week's call, analysts questioned Quidel executives about the goal it set at the beginning of the year to land approximately 1,000 customers this year for its AmpliVue C. difficile test.

"We’re still well short of 1,000 customers that we think we’ll ultimately get to," Bryant said during the call. "Having said that, we have numerous customers that are winding up evaluations and we should be launching two to four assays over the next couple of quarters which will be helpful, as well, in terms of getting more customers on the platform."

Quidel is also developing a next-generation version of its AmpliVue cartridge, which Bryant said should be ready for production by November. "So we'll work through the existing inventory and then certainly by … [the] Q1 time period we'll have the new cartridge," he said.

Bryant also provided a brief update on the development of Savanna MDx, its fully integrated cartridge-based system that will perform both real-time PCR and helicase-dependent amplification assays developed by the BioHelix team. This platform should be ready by 2015, the company has maintained.

In February Quidel said it had been awarded a milestone-based grant from the Bill and Melinda Gates Foundation to support the development, validation, and manufacture of a low-cost quantitative nucleic acid test to monitor HIV drug treatment. This assay would be run on the Savanna MDx platform.

"Recently we completed the first milestone of the Bill and Melinda Gates program, successfully demonstrating sample extraction and PCR amplification in quantitative detection of HIV on test beds," Bryant said this week. "The next step is manufacturing our first fully integrated units, which we expect will enable us to show the platform at key tradeshows in 2014."

Quidel's operating expenses totaled $24.2 million in Q3 compared to $19.3 million in the same period last year, mostly driven by the company's continued investment in Savanna MDx, as well as in sales and marketing efforts. The company's R&D costs in the third quarter rose to $7.5 million, compared to $5.1 million last year, also a result of the continued development of Savanna.

Revenue drivers

Despite Quidel's broad molecular efforts, its immunoassay products — QuickVue, RapidVue, and Sofia — are expected to be the main revenue drivers in the near term, Bryant noted during the call.

"The Sofia assay is responsible for most of the incremental sales modeled for 2015," Bryant said. "Influenza A+B, RSV, group A Strep, and hCG have been developed and FDA cleared and Sofia Influenza is CLIA waved. CLIA waiver on the last three is important, as well, and we continue to make progress towards the goal of CLIA wavier on all Sofia products."

However, the company has set an internal goal to develop products that would create incremental revenues of $100 million in 2015, Bryant said.

Of this projected $100 million, $79.5 million will be from sales of products that are already developed and cleared, he noted. The rest would be expected to be derived from molecular products, and the BioHelix and AnDiaTec acquisitions are expected to play a large part in that.

"We still feel like we’re pretty much on track," Bryant said. "Neither one of those acquisitions was intended to make up for something that was not going well, but rather they're acquisitions that give us either better scale or better ability to introduce things quicker."

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