Quidel Corporation (QDEL)

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Quidel Corporation (QDEL)

31st Annual J.P. Morgan Healthcare Conference Call

January 09, 2013, 10:30 am ET


Doug Bryant - President & CEO


Tycho Peterson - J.P. Morgan


Tycho Peterson - J.P. Morgan

Alright, good morning. We are going to go ahead and get started. I am Tycho Peterson from the life science tools diagnostics team. It’s my pleasure to introduce our next company this morning Quidel. For those interested in the breakout it’s going to be in the Yorkshire Room just down the hall.

So let me turn it over to Doug to tell you a little bit more.

Doug Bryant

Thank you, Tycho. Good morning everyone. Thanks for joining us at 7:30 in the morning. With me this morning are, Randy Steward, our Chief Financial Officer; Ruben Argueta, our Investor Relations Manager and Rob Bujarski, who is our Senior Vice President of Business Development and General Counsel.

For this morning’s presentation the deck itself will be on the website and I would encourage you to look at it to see overall what our strategy is, but for this morning what I hope to do is just focus in on a couple of key slides that will direct us so that we can update on what's happening most recently and what our milestones are going forward in 2013 that help us ultimately get to where we hope to be.

This is our Safe Harbor statement. We will be making forward-looking statements; I would especially like to thank Rob for crafting this. It’s well done Rob.

Let me fast forward to the company history. The company had been around for sometime before the current management team came onboard with a mandate to broaden our business. There were two issues with the company that we are trying to solve one of which is that our primary product flu test is the greatest contributor to our margin. The volatility of that is it makes it difficult combined with the fact that we have two of our larger volume products which are not at the gross margin that we like. So we came onboard in 2009 most of us with a mandate to broaden our base of business and to do some things that created a broader diagnostic company.

We like the flu business; we think it’s interesting but the remainder of the business needs to be equally as attractive. So we've gotten a couple of things done. Beginning in 2009, we initiated a collaborative agreement; we completed that agreement with a company called BioHelix; the company that we've been working with to develop what is now called the AmpliVue product line and I'll talk a little bit more about our first US introduction of an AmpliVue product here shortly.

And then early 2010 we announced the acquisition of Diagnostic Hybrids. This is a company that not only gave us a broader base of revenue but also R&D and manufacturing talent, something that we needed for our molecular strategy.

And then equally important, we entered into an agreement with North Western University to develop, what has been called the Wildcat, a fully integrated molecular diagnostic instrument that would be inexpensive enough to be placed in Africa to do HIV viral load testing and we've been working with them on that project. That collaborative agreement also gave us access to intellectual property around the novel extraction technology that is inherent in the Wildcat system and I would be happy to talk more about that later if you like.

Equally important again, in 2011, we were clear here in the United States for Sofia and I will talk about that in some detail. And then in April 2012, we received a waiver and have been launching this CLIA waiver and have been launching that product in the physician office segment since about June.

This is a brief financial snapshot. I think a couple of things worth noting is that 2012 now with the announcement last week of our revenues for Q4, the revenues for 2012 are known. We had a $101 million in revenues through the end of September and then in the announcement on Friday, we said that we expect revenues between [Technical Difficulty], so you can see sales in 2012 actually look somewhat similar to what we saw in 2011.

At the end of the third quarter, we had about $17 million in cash and clearly would have generated more cash in the fourth quarter. We had $19 million of debt at the time and I will just let you know that we obviously made a payment on that debt in the quarter, so that at the end of the day we are in excellent shape as we go into 2013.

This is the management team; I think a couple of things are worth noting. Since 2009 more than half of the folks here came onboard with me. We arrived again with a mandate to build a broader base diagnostic company; a company not dependent on flu margin or for flu in terms of cash generation.

I like this slide in particular because on one slide I am able to capture generally what we are working on. We have three platforms, if you will, the rapid point-of-care diagnostic platform which is our legacy set of products those are visually red and most under the brand name QuickVue. Since mid-2012 with the launch of Sofia, we now have an instrumented system that provides objectivity and connectivity and as I’ll describe in a little bit has been doing actually quite well.

Read the rest of this transcript for free on seekingalpha.com