Quidel disclosed this week that it has 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.
The test will run on the fully automated and integrated PCR-based testing system that Quidel has been developing in collaboration with researchers from Northwestern University and the NU Global Health Foundation. Quidel said this week that the system, formerly called Project Wildcat, is now called Savanna MDx.
Quidel disclosed the new grant this week as part of its fourth-quarter and full-year 2012 earnings statement and conference call. The company, which had traditionally focused on immunoassay products for the better part of its existence, in recent years has been building out its molecular diagnostics pipeline.
Savanna is the third and longest-term molecular diagnostics program at the company. During the conference call, CEO Doug Bryant noted that Savanna is a "durable, low-cost, fully integrated instrument that we will make available for use in limited resource settings for the purpose of providing to the Northwestern Global Health Foundation affordable access to HIV viral load and [tuberculosis] testing."
Bryant then went on to note that Quidel will now "be receiving some help from the Bill and Melinda Gates Foundation for the HIV portion of this endeavor;" and that the program "remains very much on track."
As of press time, details of the grant had not yet been published on the Gates Foundation website. However, during Quidel's conference call, CFO Randy Steward disclosed that the grant could be worth up to $8.3 million, and is dependent on achieving certain milestones through 2015. In Q4 2012, Bryant said, Quidel realized approximately $400,000 of grant revenue, which the company included in its total revenues.
For the three months ended Dec. 31, Quidel reported $53.9 million in revenues, a 40 percent increase over the $38.4 million reported in the year-ago period. While this revenue increase was primarily driven by the company's immunoassay products for flu testing, the company's fledgling molecular program also contributed to the revenue increase, the company said.
The other two components of Quidel's molecular program are a portfolio of PCR-based assays for use on established US Food and Drug Administration-approved thermal cyclers from other companies; and AmpliVue, a handheld disposable molecular platform that combines helicase-dependent amplification technology licensed from BioHelix with traditional lateral flow detection.
Both of these initiatives are "an important part" of Quidel's previously stated goal of achieving $250 million in annual revenues by 2015.
"To date, we are FDA cleared to market two PCR assays — Quidel Molecular Influenza A+B and Quidel Molecular hMPV," Bryant said. More specifically, these products were CE marked in the fall and received FDA clearance in December for use on Life Technologies' ABI 7500 family of qPCR systems (PCR Insider, 1/5/2012). Life Tech markets the products in Europe under an agreement between the companies.
Quidel has also submitted other molecular assays to the FDA, "seven of which we hope to introduce in 2013," Bryant said. "At this point our menu is focused on assays for respiratory pathogens and stool-based antigens — market segments where we believe we have both technical and commercial expertise," he added.
Bryant also noted that in December the FDA cleared for marketing Quidel's first AmpliVue assays for Clostridium difficile with a moderate complexity CLIA designation; and that the company has three additional AmpliVue assays in development, as well as a "next-generation cartridge platform that we hope to roll out at the end of October."
Regarding the initial uptake of AmpliVue C. Diff, Bryant said that the company has taken orders for the product and has shipped it to "a number of early adopters." In addition, Quidel has "many side-by-side evaluations underway" comparing the test with other similar commercial assays, and is "encouraged by the initial reception so far," Bryant said.
In other Q4 financial results, the company recorded a profit of $8.7 million, or $.26 per share, compared to a profit of $958,000, or $.03 per share, in Q4 2011. The firm's R&D costs increased 7 percent to $7.3 million from $6.8 million, while SG&A expenses increased 6 percent to $13.2 million from $12.4 million.
Included in research and development expenses was a $1.7 million expense reimbursement from Life Technologies related to the companies' molecular assay development agreement. The increased expenses were also driven by additional investment in R&D projects, including molecular assays, Project Wildcat, and clinical trial costs, the company said.
Quidel's full-year 2012 revenues were down 2 percent to $155.7 million from $158.6 million in 2011; while its profit for the full year declined to $5 million, or $.15 per share, from a profit of $7.6 million, or $.23 per share, in 2011.