OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in
point-of-care and home diagnostic tests, specimen collection
devices, and microbiome laboratory and analytical services, today
announced its financial results for the three months ended March
31, 2022.
“We made significant progress in the quarter
scaling InteliSwab® production and improving the efficiency of our
manufacturing process as we look to drive profitable growth,” said
OraSure Interim President and CEO Nancy J. Gagliano, M.D., MBA.
“Excluding COVID-19 products, both our Diagnostics and Molecular
Solutions businesses grew at a double-digit rate
year-over-year.”
She continued, “We once again saw exceptionally
strong demand for our molecular kits business, with our
non-COVID-19 core collection kit business growing 36% versus the
same quarter a year ago. We also continue to launch innovative
offerings such as our first-of-its-kind U.S. Food and Drug
Administration (FDA) de novo authorized microbiome gut collection
kit and our new metatranscriptome services offering, with new
offerings to be launched this quarter. In addition, we continue to
expand our market coverage with our base of active purchasing
Molecular Solutions customers growing 6% in the quarter,
positioning us for continued long-term growth.”
Financial Highlights
- Net revenues for the first quarter
of 2022 were $67.7 million, a 16% increase from the first
quarter of 2021 and a new record for the Company. Excluding
COVID-19 product revenues, revenues for the quarter increased 21%
year-over-year.
- Total revenues from the Company’s
Diagnostic business unit were $38.3 million during the first
quarter of 2022 and grew 163% relative to the same period last
year. Revenue growth was driven primarily by InteliSwab®. Excluding
InteliSwab® sales, total Diagnostic business unit revenue grew 11%
year-over-year.
- Total product and service revenues
for the Company’s Molecular Solutions business unit were $29.4
million during the first quarter of 2022, a decline of 33%
from the first quarter of 2021. The decline was driven entirely by
lower sales of the Company’s COVID-19 molecular collection kits
given the expected transition to point of care solutions, as well
as customers working through high inventory levels. Excluding these
COVID-19 revenues, the molecular solutions business grew 28%
year-over-year.
- Gross margin in the first quarter
was 36% and was negatively impacted by one-time InteliSwab®
manufacturing costs including high scrap rates during the quarter
and under-absorption as the Company worked to scale InteliSwab®
production. Additionally, average selling prices for InteliSwab®
declined on a sequential basis as the mix of the first quarter
revenue was primarily related to the Company’s government
procurement contract compared to fourth quarter 2021 revenue which
consisted of predominantly commercial sales. Furthermore, product
mix drove declining margins with more revenue coming from the
Company’s Diagnostic business unit, as well as lower revenues from
higher margin COVD-19 collection kits. In addition, gross margin
was negatively impacted by the expiration of subsidies for the
international sale of our HIV Self-Test under the charitable
support agreement with the Gates Foundation ,which expired in June
2021. The Company currently has a number of programs in place which
are intended to improve gross margins including efficiency programs
associated with production, changes in logistical processes,
product packaging redesign, and supply chain consolidation.
- Operating loss in the first quarter
was ($16.0) million compared to operating income of $10.4 million
in the first quarter of last year. OraSure’s operating loss in the
quarter was driven by an increase in investments to support the
InteliSwab® scale-up, one-time production inefficiencies, continued
development, and approximately $4.9 million in one-time expenses
tied to the company’s strategic alternative process and CEO
transition.
- Cash flow used in operations in the
quarter was ($35.8) million which was impacted by working capital
changes due to increases in accounts receivable and inventory
levels associated with the InteliSwab® scale up. Cash and
investments totaled $112.2 million at March 31,
2022. As of March 31, 2022, the Company also had approximately
$16.9 million in funds committed to the capacity expansion build
out associated with the Department of Defense contract which will
be reimbursed in future periods.
Recent Business Highlights
InteliSwab® COVID-19
Testing
- InteliSwab® revenue in the quarter grew to $22.1 million
representing over 50% sequential growth relative to the fourth
quarter.
- Production volumes of InteliSwab®
scaled dramatically during the first quarter. In early April, the
company demonstrated the ability to produce tests at volume
equivalent to the Company’s installed capacity representing over a
four-fold increase from production levels in early January. During
the quarter, the company resolved major production issues and is
now in full production phase.
- The Company has been highly focused
on improving production efficiencies as well. Finished goods scrap
rates for InteliSwab declined to less than 1% by late March from
over 30% in early January.
- OraSure announced that the
InteliSwab® COVID-19 rapid tests detect the Omicron variant
with similar limits of detection to the original SARS-CoV-2 strain
and other previous variants of concern, including Delta, Alpha,
Beta and Gamma.
Diagnostics Business Results (excluding
InteliSwab®)
- Excluding InteliSwab® revenue, the
Diagnostics legacy revenue was $16.2M and grew 11% compared to the
prior year quarter.
- International Diagnostics revenue
was $5.6M in Q1, a20% increase compared to the prior year period.
Excluding the impact of the Bill and Melinda Gates Foundation
subsidy expiry in June 2021, the business grew 34%
year-over-year.
- U.S. Diagnostics revenue, excluding
InteliSwab®, was $10.5M and grew 7% year-over-year despite lapping
the Q1 2021 Center for Disease Control’s, “Let’s Stop HIV
Together,” home testing program which was not repeated this
quarter.
- The Company launched the OraQuick®
HIV Self-Test, an oral swab in-home test for HIV-1 and HIV-2, into
Europe. The test will be available in six European countries:
United Kingdom, Germany, France, Italy, Spain and Portugal.
Molecular Solutions
- Genomics collection kit revenue of
$15.1 million for the first quarter of 2022 grew 40%
year-over-year.
- Sales of OraSure’s sample
collection devices for molecular/PCR COVID-19 testing decreased 68%
year-over-year to $8.9 million in the first quarter of 2022
compared to $28.0 million in the prior year period. The decline in
revenue is attributable to lower testing volumes with core
customers as the market transitions to point-of-care solutions such
as rapid antigen tests and customers work through current inventory
levels of collection kits.
- Total microbiome revenue, including
kits and services, was $3.7 million in the quarter and declined 12%
relative to the first quarter of last year. During the quarter,
services revenue was negatively impacted by the delayed timing of
customer clinical trials. Microbiome collection kits grew 14% in Q1
compared to the prior year.
- Received U.S. Food and Drug
Administration (FDA) de novo authorization for the OMNIgene®·GUT Dx
(OMD-200) microbiome collection device and commercially launched
the product. OMNIgene®·GUT Dx is the first FDA approved collection
kit specifically targeted to the collection of stool-based
microbiome samples.
- Launched a new service to provide
metatranscriptomic sequencing and analysis of gut microbiome
samples through the Company’s Diversigen subsidiary. As part of the
launch, the company created a comprehensive, curated database with
more than 190,000 genomes, representing 31,000 species of microbes,
to allow profiling of microbial gene expression, including
functional modules and pathways. Metatranscriptomic sequencing
provides powerful insights not possible with other sequencing
technologies.
Strategic Alternatives Review and CEO
Search
On January 5, 2022, the Company announced it is
exploring strategic alternatives. The review is ongoing, and no
decisions have been made.
Consistent with the first quarter, OraSure will
not be providing guidance for the second quarter given the ongoing
strategic alternative process.
Additionally, the company has hired an external
search firm and is in the process of looking for a permanent chief
executive officer. Dr. Nancy J. Gagliano has been appointed as
interim President and CEO by the Board of Directors and is not a
candidate for the full-time position.
Financial Data (Unaudited)
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Results of
Operations |
|
|
|
|
Net revenues |
|
$ |
67,707 |
|
|
$ |
58,582 |
|
Cost of products and services
sold |
|
|
43,435 |
|
|
|
20,256 |
|
Gross profit |
|
|
24,272 |
|
|
|
38,326 |
|
Operating expenses: |
|
|
|
|
Research and development |
|
|
8,413 |
|
|
|
8,992 |
|
Sales and marketing |
|
|
12,717 |
|
|
|
9,530 |
|
General and administrative |
|
|
19,156 |
|
|
|
10,188 |
|
Change in fair value of acquisition-related contingent
consideration |
|
|
(36 |
) |
|
|
(806 |
) |
Total operating expenses |
|
|
40,250 |
|
|
|
27,904 |
|
Operating income (loss) |
|
|
(15,978 |
) |
|
|
10,422 |
|
Other expense |
|
|
(53 |
) |
|
|
(119 |
) |
Income (loss) before income
taxes |
|
|
(16,031 |
) |
|
|
10,303 |
|
Income tax expense |
|
|
3,936 |
|
|
|
6,529 |
|
Net income (loss) |
|
$ |
(19,967 |
) |
|
$ |
3,774 |
|
Earnings (loss) per share: |
|
|
|
|
Basic |
|
$ |
(0.28 |
) |
|
$ |
0.05 |
|
Diluted |
|
$ |
(0.28 |
) |
|
$ |
0.05 |
|
Weighted average shares: |
|
|
|
|
Basic |
|
|
72,194 |
|
|
|
71,878 |
|
Diluted |
|
|
72,194 |
|
|
|
72,766 |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
%Change |
|
DIAGNOSTICS |
|
|
|
|
|
|
Infectious Disease Testing Revenues |
|
|
|
|
|
|
Domestic HIV |
$ |
3,765 |
|
$ |
5,293 |
|
(29 |
) |
% |
International HIV |
|
4,401 |
|
|
3,486 |
|
26 |
|
|
Net HIV revenues |
|
8,166 |
|
|
8,779 |
|
(7 |
) |
|
Domestic HCV |
|
2,036 |
|
|
1,182 |
|
72 |
|
|
International HCV |
|
1,221 |
|
|
1,184 |
|
3 |
|
|
Net HCV revenues |
|
3,257 |
|
|
2,366 |
|
38 |
|
|
Net OraQuick® revenues |
|
11,423 |
|
|
11,145 |
|
2 |
|
|
COVID-19 |
|
22,136 |
|
|
- |
|
NM |
|
Other infectious disease revenues |
|
277 |
|
|
226 |
|
23 |
|
|
Total Infectious Disease |
|
33,836 |
|
|
11,371 |
|
198 |
|
|
Risk
Assessment |
|
2,560 |
|
|
1,962 |
|
30 |
|
|
Other non-product
revenues |
|
1,914 |
|
|
1,213 |
|
58 |
|
|
TOTAL DIAGNOSTIC NET
REVENUE |
|
38,310 |
|
|
14,546 |
|
163 |
|
|
|
|
|
|
|
|
|
MOLECULAR
SOLUTIONS |
|
|
|
|
|
|
Genomics |
$ |
15,093 |
|
$ |
10,818 |
|
40 |
|
|
Microbiome |
|
1,990 |
|
|
1,751 |
|
14 |
|
|
COVID-19 |
|
8,896 |
|
|
27,972 |
|
(68 |
) |
|
Laboratory services |
|
1,733 |
|
|
2,497 |
|
(31 |
) |
|
Other product and services revenues |
|
1,128 |
|
|
208 |
|
442 |
|
|
Net product and service revenues |
|
28,840 |
|
|
43,246 |
|
(33 |
) |
|
Other non-product and
service revenues |
|
557 |
|
|
790 |
|
(29 |
) |
|
TOTAL MOLECULAR
SOLUTIONS NET REVENUE |
|
29,397 |
|
|
44,036 |
|
(33 |
) |
|
|
|
|
|
|
|
|
TOTAL NET
REVENUES |
$ |
67,707 |
|
$ |
58,582 |
|
16 |
|
% |
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
March 31, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
70,721 |
|
$ |
116,762 |
Short-term investments |
|
|
41,503 |
|
|
36,279 |
Accounts receivable, net |
|
|
59,671 |
|
|
45,323 |
Inventories |
|
|
61,536 |
|
|
53,138 |
Other current assets |
|
|
34,933 |
|
|
36,929 |
Property, plant and equipment,
net |
|
|
97,572 |
|
|
88,164 |
Intangible assets, net |
|
|
13,692 |
|
|
14,343 |
Goodwill |
|
|
40,389 |
|
|
40,279 |
Long-term investments |
|
|
- |
|
|
17,009 |
Other noncurrent assets |
|
|
15,515 |
|
|
12,764 |
Total assets |
|
$ |
435,532 |
|
$ |
460,990 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accounts payable |
|
$ |
27,057 |
|
$ |
28,024 |
Deferred revenue |
|
|
2,906 |
|
|
2,936 |
Other current liabilities |
|
|
25,624 |
|
|
37,104 |
Other non-current
liabilities |
|
|
15,059 |
|
|
12,393 |
Stockholders’ equity |
|
|
364,886 |
|
|
380,533 |
Total liabilities and stockholders’ equity |
|
$ |
435,532 |
|
$ |
460,990 |
|
|
|
|
|
Additional Financial Data
(Unaudited) |
|
Three months ended |
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
Capital expenditures |
|
$ |
22,074 |
|
$ |
11,061 |
Depreciation and
amortization |
|
$ |
3,682 |
|
$ |
2,489 |
Stock-based compensation |
|
$ |
3,524 |
|
$ |
1,464 |
Cash used in operating
activities |
|
$ |
35,821 |
|
$ |
4,393 |
|
|
|
|
|
Conference Call
The Company will host a conference call and
audio webcast for analysts and investors to discuss the Company’s
first quarter 2022 results and certain business developments,
beginning today at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time). On the call will be Dr. Nancy J.
Gagliano, President and Chief Executive Officer, Lisa
Nibauer, President Diagnostics, Kathleen Weber, President Molecular
Solutions, and Scott Gleason, Interim Chief Financial Officer. The
call will include prepared remarks by management and a question and
answer session.
In order to listen to the conference call,
please dial (877) 344-8082 (Domestic) or (213) 992-4618
(International) and reference Conference ID #4956626 with pin
number 3180 or go to OraSure Technologies’ web
site, www.orasure.com, and click on the Investor Relations
page. Please click on the webcast link and follow the prompts for
registration and access 10 minutes prior to the call. A replay of
the call will be archived on OraSure Technologies’ web site shortly
after the call has ended and will be available for 14 days. A
replay of the call can also be accessed until midnight, May
24, 2022, by dialing 800-645-7964 and entering playback ID:
4132#.It is recommended to dial-in at most 15 to 20 minutes prior
to the call start to reduce waiting times. If a participant will be
listen-only, they are encouraged to listen via the webcast on
OraSure’s Investor Relations page.
About InteliSwab®OraSure has received Emergency
Use Authorizations (EUA) from the 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. The FDA has also authorized the
InteliSwab® COVID-19 Rapid Test Pro for professional use in
point of care (POC) CLIA-waived settings, and the
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 it has
been authorized by the FDA under an EUA. The emergency use of this
product has been authorized only for the detection of proteins from
SARS-CoV-2, not for any other viruses or pathogens. 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.
Multiple government agencies, including the U.S. Department of
Defense (DoD) and Department of Health and Human Services (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 HHS; the Office of the Assistant
Secretary for Preparedness and Response; Biomedical Advanced
Research and Development Authority, Division of Research,
Innovation and Ventures under contract numbers 75A50120C00061 and
75A50121C00078, 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). The manufacturing effort
was funded through the American Rescue Plan Act (ARPA) to enable
and support domestic industrial base expansion for critical medical
resources.
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.
Important InformationThis press release
contains certain forward-looking statements, including with respect
to products, product development activities, regulatory submissions
and authorizations, revenue growth, increasing margins 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 Company's 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 operating results, business
or investor perceptions; the diversion of management’s attention
from the Company's ongoing business and regular business
responsibilities due to the Company's exploration of strategic
alternatives; ability to resolve the Company's 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 the Company's business, supply chain,
labor force, and 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, civil
unrest, hostilities and war ; 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, 2021, 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 |
Amy Koch |
Interim CFO SVP Investor
Relations & Corp. Communications |
Sr. Mgr. Corporate
Communications |
484-425-0588 |
484-523-1815 |
sgleason@orasure.com |
media@orasure.com |
|
|
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