OraSure Technologies, Inc. (NASDAQ: OSUR), a global leader in
point-of-care and home diagnostic testing and sample collection
technologies, today announced preliminary Q4 2021 results,
organizational changes, and a Board-level review of strategic
alternatives to enhance stockholder value.
InteliSwab™ Update and 4Q21 Financial
Outlook
OraSure expects to deliver total revenue in the
fiscal fourth quarter at the low end of the Company’s guidance
range of approximately $60 million, driven by lower than
anticipated InteliSwab™ sales coupled with outperformance in the
Company’s Molecular Solutions business unit.
The Company anticipates total InteliSwab™
revenue of approximately $12 million for the quarter and $20
million for the full year. During the fiscal fourth quarter OraSure
made material progress in resolving the technology transfer issues
and is now in the process of normal scale-up. Given the time
involved to resolve those issues and the impact of additional
hiring, training, and global supply chain challenges experienced by
OraSure in the fourth quarter, the Company did not achieve its
InteliSwab™ guidance for the fiscal year. The Company anticipates
continued scaling of its InteliSwab™ production from 4Q21 levels
and will provide an additional update on its 4Q21 earnings call.
The Company is also in the process of hiring staff for additional
shifts and installing additional automated equipment to further
increase production.
“The Board and executive leadership team are
taking action to ensure that we are in the best position to drive
long-term value for our stockholders,” said OraSure President and
Chief Executive Officer Stephen Tang, Ph.D. “Despite the slower
scale-up in InteliSwab™ revenue in 2021, we are encouraged by our
potential in 2022 for a significant step up in InteliSwab™ revenue
given the strong demand environment and our United States
government procurement contract. In addition, we are very pleased
with the continued strong performance in our Molecular Solutions
business unit, which has grown at over a 30% CAGR the last two
calendar years including double-digit growth in our core molecular
kits and services businesses.”
OraSure can also confirm that InteliSwab™
detects the Omicron variant when tested by an outside third-party
laboratory with live viral samples. In addition, as previously
confirmed, InteliSwab™ also detects the Delta variant and other
variants of concern so consumers and caregivers can be confident in
the results.
The estimated preliminary revenue results
presented above are based on the information available to OraSure
as of the date of this press release. OraSure has not yet completed
its quarter-end closing. Actual results for the fourth quarter and
year ended December 31, 2021 may vary from these estimated
preliminary results and will not be finalized until after the date
of this press release.
Evaluation of Strategic
Alternatives
The COVID-19 pandemic has provided OraSure an
opportunity to fundamentally transform into a higher growth, more
innovative and efficient organization with broader customer reach,
both within and outside the United States. The Company believes it
is well positioned to address current public health challenges and
capitalize on diagnostic trends in the market and enhance its
operational and competitive profile. Against this backdrop, the
OraSure Board of Directors intends to explore and evaluate a broad
range of strategic alternatives with the goal of maximizing value
for stockholders.
There can be no assurance that the exploration
of strategic alternatives will result in any agreements or
transactions, or that, if completed, any agreements or transactions
will be successful or on attractive terms. OraSure does not intend
to make any further public comment regarding the review until it
has been completed or the Company determines that disclosure is
required or appropriate. Evercore is serving as OraSure’s financial
advisor and Troutman Pepper is serving as the Company’s legal
advisor in this evaluation.
Leadership Changes
OraSure also announced that Stephen Tang Ph.D.,
President and CEO, will be the leaving the Company as of March 31,
2022. In the interim, Dr. Tang will focus primarily on assisting
the Board in its strategic review process and helping to ensure an
orderly transition of the CEO role. Under Dr. Tang’s four years as
CEO, OraSure acquired four companies and launched several COVID-19
products, including InteliSwab™. As a member of the Board, he will
have served for 11 years, including Chairman.
The Board has initiated a search for his
successor as CEO. During this transition, while the CEO search is
in process, the Board of Directors will be taking a more active
role. For this purpose, the Board has appointed Director Eamonn
Hobbs to serve as point person for the Board. Mr. Hobbs will
not be a candidate for the permanent CEO position.
Organizational Changes
The Company is also making certain
organizational changes to focus priorities, resources, expertise,
and drive improved operational performance. Under the new
vertically integrated business unit structure, operations, R&D
and manufacturing will now report to each of the respective
business unit leaders. Key to these changes, Lisa Nibauer will
become President of Diagnostics and Kathleen Weber will become
President of Molecular Solutions.
Ms. Nibauer joined OraSure as Executive Vice
President, Business Unit Leader, Diagnostics, in May 2020. She
previously spent eight years at Becton Dickinson, Inc. (“BD”), most
recently as Vice President & General Manager, Global Medication
Delivery Solutions, where she had complete operational an strategic
responsibility for $1.6 billion in annual revenue globally and was
also accountable for the largest business within BD. Prior to
joining BD, she held general management, sales and marketing
positions at several large healthcare companies.
Ms. Weber has served as the Executive Vice
President, Business Unit Leader for Molecular Solutions, since
January 2019 and previously held various senior executive
leadership roles at OraSure since joining the Company in 2012. She
is responsible for establishing the strong foundation of both our
HIV self-testing and emerging disease programs. Prior to joining
OraSure, Ms. Weber held several executive leadership positions at
Pfizer, Johnson and Johnson and Schering–Plough leading and
accountable for multi-billion dollar business units.
“The focus of the Board of Directors continues
to be on ensuring OraSure can execute at a high level. We believe
the organizational changes and other actions we are undertaking
will best position the Company as it scales up with InteliSwab™ and
delivers on its significant potential in key, high growth areas of
healthcare. We appreciate Steve Tang’s years of service to OraSure
and look forward to his continued leadership as we evaluate
available strategic alternatives to maximize stockholder value,”
said OraSure Chairman of the Board, Michael Celano.
About OraSure
TechnologiesOraSure Technologies empowers the global
community to improve health and wellness by providing access to
accurate, essential information. OraSure, together with its
wholly-owned subsidiaries, DNA Genotek, Diversigen, and Novosanis,
provides its customers with end-to-end solutions that
encompass tools, services, and diagnostics. The OraSure family
of companies is a leader in the development, manufacture, and
distribution of rapid diagnostic tests, sample collection and
stabilization devices, and molecular services solutions designed to
discover and detect critical medical conditions. OraSure’s
portfolio of products is sold globally to clinical laboratories,
hospitals, physician’s offices, clinics, public health and
community-based organizations, research institutions, government
agencies, pharma, commercial entities and direct to consumers. For
more information on OraSure Technologies, please visit
www.orasure.com.
Multiple government agencies, including the DOD
and HHS are working to address COVID-19 testing needs. Development
of the InteliSwab™ COVID-19 Rapid Test has been funded in whole or
in part with federal funds from the Department of Health and Human
Services; Office of the Assistant Secretary for Preparedness and
Response; Biomedical Advanced Research and Development Authority,
Division of Research, Innovation and Ventures under contract number
75A50120C00061, utilizing Health Care Enhancement Act (HCEA)
funding. The DoD's Defense Assisted Acquisition (DA2) Cell led the
manufacturing expansion effort for the InteliSwab™ COVID-19 rapid
test in coordination with the Department of the Air Force’s
Acquisition COVID-19 Task Force (DAF ACT). This effort was funded
through the American Rescue Plan Act (ARPA) to enable and support
domestic industrial base expansion for critical medical
resources.
OraSure has received Emergency Use
Authorizations (EUA) from the U.S. Food and Drug Administration
(FDA) for its InteliSwab™ COVID-19 rapid tests. The FDA has
authorized the InteliSwab™ COVID-19 Rapid Test for Over-the-Counter
(OTC) use without a prescription. FDA has also authorized the
InteliSwab™ COVID-19 Rapid Test Pro for professional use in point
of care (POC) CLIA-waived settings, and InteliSwab™ COVID-19 Rapid
Test Rx for Prescription Home Use. These remarkably simple COVID-19
lateral flow tests use samples self-collected from the lower
nostrils. InteliSwab™’s unique design incorporates a built-in swab
fully integrated into the test stick. After users swab their lower
nostrils, the test stick is swirled in a pre-measured buffer
solution, and the result appears right on the test stick within 30
minutes, with no instruments, batteries, smartphone or laboratory
analysis needed to see the result. With less than one minute of
“hands-on time,” it is as simple as Swab, Swirl, and See.
This product has not been FDA cleared or
approved; but authorized by the FDA under an EUA; This product has
been authorized only for the detection of proteins from SARS-CoV-2,
not for any other viruses or pathogens; and, This product is only
authorized for the duration of the declaration that circumstances
exist justifying the authorization of emergency use of in vitro
diagnostics for detection and/or diagnosis of COVID-19 under
Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21
U.S.C. § 360bbb- 3(b)(1), unless the declaration is terminated or
authorization is revoked sooner.
Important Information
This press release contains certain
forward-looking statements, including with respect to our
expectations regarding the exploration of strategic alternatives,
expected revenues and production estimates, products, product
development activities, regulatory submissions and authorizations
and other matters. Forward-looking statements are not guarantees of
future performance or results. Known and unknown factors that could
cause actual performance or results to be materially different from
those expressed or implied in these statements include, but are not
limited to: risk that the exploration of strategic alternatives may
not result in any definitive transaction or enhance stockholder
value and may create a distraction or uncertainty that may
adversely affect our operating results, business or investor
perceptions; the diversion of management’s attention from our
ongoing business and regular business responsibilities; whether
actual financial results for the fourth quarter and year ending
December 31, 2021 will differ materially from the preliminary
results reported above; ability to resolve our ongoing
manufacturing challenges and satisfy customer demand; ability to
market and sell products, whether through our internal, direct
sales force or third parties; impact of significant customer
concentration in the genomics business; failure of distributors or
other customers to meet purchase forecasts, historic purchase
levels or minimum purchase requirements for our products; ability
to manufacture products in accordance with applicable
specifications, performance standards and quality requirements;
ability to obtain, and timing and cost of obtaining, necessary
regulatory approvals for new products or new indications or
applications for existing products; ability to comply with
applicable regulatory requirements; ability to effectively resolve
warning letters, audit observations and other findings or comments
from the U.S. Food and Drug Administration (“FDA”) or other
regulators; the impact of the novel coronavirus (“COVID-19”)
pandemic on our business and our ability to successfully develop
new products, validate the expanded use of existing collector
products, receive necessary regulatory approvals and authorizations
and commercialize such products for COVID-19 testing; changes in
relationships, including disputes or disagreements, with strategic
partners or other parties and reliance on strategic partners for
the performance of critical activities under collaborative
arrangements; ability to meet increased demand for the Company’s
products; impact of replacing distributors; inventory levels at
distributors and other customers; ability of the Company to achieve
its financial and strategic objectives and continue to increase its
revenues, including the ability to expand international sales;
impact of competitors, competing products and technology changes;
reduction or deferral of public funding available to customers;
competition from new or better technology or lower cost products;
ability to develop, commercialize and market new products; market
acceptance of oral fluid or urine testing, collection or other
products; market acceptance and uptake of microbiome informatics,
microbial genetics technology and related analytics services;
changes in market acceptance of products based on product
performance or other factors, including changes in testing
guidelines, algorithms or other recommendations by the Centers for
Disease Control and Prevention (“CDC”) or other agencies; ability
to fund research and development and other products and operations;
ability to obtain and maintain new or existing product distribution
channels; reliance on sole supply sources for critical products and
components; availability of related products produced by third
parties or products required for use of our products; impact of
contracting with the U.S. government; impact of negative economic
conditions; ability to maintain sustained profitability; ability to
utilize net operating loss carry forwards or other deferred tax
assets; volatility of the Company’s stock price; uncertainty
relating to patent protection and potential patent infringement
claims; uncertainty and costs of litigation relating to patents and
other intellectual property; availability of licenses to patents or
other technology; ability to enter into international manufacturing
agreements; obstacles to international marketing and manufacturing
of products; ability to sell products internationally, including
the impact of changes in international funding sources and testing
algorithms; adverse movements in foreign currency exchange rates;
loss or impairment of sources of capital; ability to attract and
retain qualified personnel; exposure to product liability and other
types of litigation; changes in international, federal or state
laws and regulations; customer consolidations and inventory
practices; equipment failures and ability to obtain needed raw
materials and components; the impact of terrorist attacks and civil
unrest; and general political, business and economic conditions.
These and other factors that could affect our results are discussed
more fully in our SEC filings, including our registration
statements, Annual Report on Form 10-K for the year ended December
31, 2020, Quarterly Reports on Form 10-Q, and other filings with
the SEC. Although forward-looking statements help to provide
information about future prospects, readers should keep in mind
that forward-looking statements may not be reliable. Readers are
cautioned not to place undue reliance on the forward-looking
statements. The forward-looking statements are made as of the date
of this press release and OraSure Technologies undertakes no duty
to update these statements.
Investor Contact: |
Media Contact: |
Scott Gleason |
Michael Freitag or Adam Pollack |
Interim CFO & SVP Investor Relations & Corp.
Communications |
Joele Frank |
484-425-0588 |
212-355-4449 |
sgleason@orasure.com |
media@orasure.com |
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