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Quidel Q3 Revenues Narrow Slightly; MDx Initiatives Remain on Track

NEW YORK (GenomeWeb News) – Quidel said after the close of the market Tuesday that revenues in the third quarter narrowed by a fraction of 1 percent year over year, missing the consensus Wall Street estimate.

Company officials also said that the firm's plans for its molecular diagnostic products remain on schedule.

The San Diego-based diagnostics company reported revenues of $33.0 million for the three months ended Sept. 30, down from $33.1 million a year ago and short of the average analyst estimate of $35.9 million. Quidel said that an increase in Pregnancy product revenues contributed to 7 percent growth in the Women's Health category, while Infectious Disease revenues slid 2 percent.

In a statement, President and CEO Doug Bryant said the results were "consistent with a period of low influenza-like illness activity. We are pleased with our commercial efforts with Sofia to date, and with the continued progress we've made with product development."

Sofia is Quidel's benchtop fluorescent immunoassay analyzer.

Highlights during the quarter included a new $140 million revolving credit facility and a new partnership with Life Technologies to develop and commercialize real-time PCR assays on Life Tech's molecular diagnostic version of its QuantStudio 12K Flex Real-Time PCR system.

During the quarter, Quidel also launched its C. difficile product for the firm's AmpliVue handheld system, which is the company's first molecular platform. On a conference call after the release of the earnings, Bryant said Quidel is seeing "interest in the format," but that it was too early to provide details about uptake. He added that based on data from its clinical trials, the company hopes to release the test in the US within the next few months.

He also said that Quidel's real-time PCR program remains on track in its plans to develop a suite of 20 molecular PCR assay targets that can run on thermal cycling systems currently available, such as the ABI 7500 Fast Dx system and Life Technologies' QuantStudio Dx platform, as well as on the Wildcat platform that Quidel is developing in collaboration with Northwestern University and the NU Global Health Foundation.

Bryant said that Quidel is in the process of locking down the design of the cartridge for Wildcat, which "is pretty important for us in understanding what our costs are likely to be at launch." A final decision on the design is expected to be made by year's end, and a launch of the platform in Africa with an HIV viral load assay in 2014 remains on target. Quidel anticipates launching Wildcat in the developed world the following year with a menu of about 20 assays.

Quidel lowered its R&D costs during the quarter by 14 percent year over year to $5.1 million from $5.9 million as a result of its July deal with Life Tech. The company had originally planned to record payments from the deal as contract revenue, but later determined that reimbursements from Life Tech should be recorded as a reduction in R&D costs instead. During the third quarter, the deal lowered R&D spending by $1.3 million, Bryant said.

Its SG&A costs increased 7 percent to $12.5 million from $11.7 million.

Quidel's net loss in the quarter was reduced to $676,000, or $.02 per share, from a net loss of $1.1 million, or $.03 per share, a year ago. On an adjusted basis, Quidel said that it had EPS of $.08. The consensus Wall Street estimate was for a net loss per share of $.02.

Quidel finished the quarter with $17.8 million in cash and cash equivalents.

In early Wednesday trade on the Nasdaq shares of Quidel were up 2 percent at $16.58.

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