Post by icemandios on May 11, 2023 2:00:20 GMT
OraSure Reports 1Q23 Record Revenue Of $155.0 Million; Announces New Collaborations As Company Increasingly Focuses On Core Growth
Gross margins increase 200 basis points sequentially despite mix/pricing headwinds
Signs three new molecular partnerships supporting cancer diagnostics, women’s health testing, and microbiome services
Q1 GAAP EPS of $0.37; Non-GAAP EPS of $0.47
Improved cash position with $112.4 million in cash and cash equivalents; Company anticipates additional favorable impact from working capital in 2023
Management to Host Analyst/Investor Call and Webcast Today at 5:00 p.m. ET
BETHLEHEM, Pa., May 10, 2023 (GLOBE NEWSWIRE) -- 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, 2023.
“This quarter we once again delivered clear progress on our transformation journey. First, to Strengthen Our Foundation we reduced our non-production workforce in Q1 by 11% in accordance with our planned $15 million in annual savings, and we will deliver additional cost savings in the near-term as COVID-19 volumes have begun to taper. We also significantly increased gross margins despite mix/pricing headwinds and implemented new packaging changes on InteliSwab® tests which are expected to result in savings of approximately $0.50 per test. With facility consolidation, implementation of additional automation, and manufacturing process upgrades, we plan to further drive efficiencies and believe we will achieve our goal to breakeven in cash flow from operations for the core business in 2024,” said OraSure President and CEO Carrie Eglinton Manner.
She continued, “The most important point of streamlining our cost structure is building a solid foundation to Elevate Core Growth across the enterprise. We made progress on our product pipeline as we work to expand our infectious disease and sexual health portfolio of assays and to extend our leadership in molecular products. Additionally, this quarter we signed three new molecular partnerships following our recent deals with Quest Diagnostics and Grifols which make us increasingly confident in the long-term trajectory of our molecular portfolio. Overall, we believe the steps we’ve taken this quarter have further positioned the Company to drive profitable growth and deliver additional shareholder value.”
Net revenues for the first quarter of 2023 were $155.0 million, a 129% increase from the first quarter of 2022 and a new record for the Company.
Total InteliSwab® test revenue of $118.3 million increased 33% sequentially as the Company delivered record test volume supporting the Federal government’s school testing program during the quarter. Given Q2 2023 InteliSwab® volume tapering, OraSure has now begun to scale-down its COVID-19 production. The Company is also in the process of closing an overseas production operation as part of its broader strategy to consolidate manufacturing.
Core revenue (excluding COVID-19 revenues) grew sequentially in the quarter. Core growth was driven by strong HIV sales as the Company began delivering orders under the “Let’s Stop HIV Together,” program and strong international HIV test sales due to carryover from the fourth quarter. Molecular product sales also increased sequentially 7% but declined year-over-year as the Company continued to see some disruption amongst its large customers.
GAAP gross margin percentage was 42.5% in the quarter compared to 35.9% in the first quarter of 2022. GAAP gross margins increased 200 basis points on a sequential basis. Non-GAAP gross margins in the quarter were 42.8% compared to 37.7% in the first quarter of 2022 and non-GAAP gross margins increased 190 basis points on a sequential basis. On a year-over-year basis, gross margins were negatively impacted primarily by product mix and InteliSwab® test pricing but increased predominantly due to manufacturing efficiencies associated with InteliSwab® test production and decreased scrap expense.
GAAP operating income in the first quarter was $24.3 million which compares to a ($16.2) million operating loss in the first quarter of 2022 and increased $9.8 million on a sequential basis. Non-GAAP operating income was $32.7 million in the quarter compared to a ($6.6) million non-GAAP operating loss in the first quarter of 2022 and increased by $14.1 million on a sequential basis. This was driven by higher revenue and improved gross margins.
Cash and short-term investments increased to $112.4 million as of March 31, 2023. Working capital also continued to increase meaningfully in the first quarter as the Company delivered increased InteliSwab® tests. Management believes increased working capital will improve its cash balance as InteliSwab® revenues taper in the future.
Recent Business Highlights
Delivered first OraQuick® HIV Self Tests under the “Let’s Stop HIV Together” program in partnership with Emory University and the United States Center for Disease Control and Prevention.
Recent Business Highlights
Delivered first OraQuick® HIV Self Tests under the “Let’s Stop HIV Together” program in partnership with Emory University and the United States Center for Disease Control and Prevention.
Completed transition to the new packaging and labeling configuration for InteliSwab® and began shipping the new configuration in March 2023. The packaging changes are expected to drive per test cost savings of approximately $0.50 which includes the impact from lower shipping costs based upon the smaller packaging configuration that are expected to reduce total truckloads by approximately 50%.
Announced a new collaboration with Ziwig®, a French biotech company commercializing Ziwig Endotest®, a breakthrough innovation using salivary miRNA to diagnose endometriosis. This painful condition, which on average takes 8 years to diagnose, impacts quality of life and in some cases, fertility, for the 190 million women in the world who suffer from it.
Signed a partnership deal with Novozymes, a global biotechnology company and world-leader in biosolutions, to provide a full service offering in support of their BiomeFx™ product. BiomeFx™ is a personalized health microbiome test, which leverages insights from the gut and vaginal microbiome to empower participants to lead healthier lives. Microbiome samples will be collected using sample collection kits from OraSure’s DNA Genotek subsidiary and microbiome sequencing and analytic services will be provided by Diversigen. The service launched in April 2023.
Signed a commercial collaboration with nRichDX, to validate and co-promote the Company’s products for their liquid biopsy applications using first-void urine samples collected by Colli-Pee® urine collection device. The companies are evaluating applications for use such as sexually-transmitted infections, human papillomavirus (HPV), and early-stage cancer detection.
Received acceptance for a publication in a peer-reviewed journal for a Colli-Pee® study conducted in partnership with Manchester University and Aquarius Population Health, a UK-based organization. The study compared three HPV sample collection methods including 1) routine clinician-collected cervical sample, 2) self-collected first-void (FV) urine using the OraSure/Novosanis Colli-Pee® device; and 3) self-collected vaginal swab in 10,000 women who were eligible for the NHS Cervical Screening Programme.
Notably, the study concluded that self-sampling for routine primary human papillomavirus (HPV) cervical cancer screening with Colli-Pee® device could provide a less costly alternative to clinician-collected sampling (32% reduction) and other self-sampling approaches (4.4% reduction). This could support expanding the reach of affordable, Colli-Pee®-mediated cervical cancer screening to underserved women at scale in the UK, and possibly elsewhere.
Financial Guidance
The Company is guiding toward 2Q23 revenue of $62 to $67 million. Given lower April ordering activity from the U.S. government in respect to the school testing program, OraSure is guiding to InteliSwab® revenue of $25 to $30 million in the second quarter representing current government program orders. The Company is actively working with its public health partners on a path to ensure warm-base manufacturing and infectious disease outbreak readiness utilizing existing funds appropriated under its InteliSwab® contracts. Additionally, the Company anticipates experiencing some temporary margin headwinds in Q2 2023 predominantly due to InteliSwab® pricing mix. Furthermore, in support of its goal to achieve cash flow from operations breakeven by 2024, the Company plans to deliver additional cost savings beyond the $15 million announced in Q1 2023.
Financial Guidance
The Company is guiding toward 2Q23 revenue of $62 to $67 million. Given lower April ordering activity from the U.S. government in respect to the school testing program, OraSure is guiding to InteliSwab® revenue of $25 to $30 million in the second quarter representing current government program orders. The Company is actively working with its public health partners on a path to ensure warm-base manufacturing and infectious disease outbreak readiness utilizing existing funds appropriated under its InteliSwab® contracts. Additionally, the Company anticipates experiencing some temporary margin headwinds in Q2 2023 predominantly due to InteliSwab® pricing mix. Furthermore, in support of its goal to achieve cash flow from operations breakeven by 2024, the Company plans to deliver additional cost savings beyond the $15 million announced in Q1 2023.
Conference Call
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s first quarter 2023 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 Carrie Eglinton Manner, President and Chief Executive Officer, Ken McGrath, Chief Financial Officer, and Scott Gleason, SVP Investor Relations and Corporate Communications. The call will include prepared remarks by management and a question and answer session.
In order to listen to the conference call, please register to obtain a dial in and pin at the following link:
register.vevent.com/register/BI1408073fde3e47ab889cfdc791e65ccf
To listen to the webcast, 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. It is recommended to dial-in 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 U.S. Food and Drug Administration (“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. The InteliSwab ® test’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 Department of Health and Human Services; Administration for Strategic Preparedness and Response; Biomedical Advanced Research and Development Authority, under contract number 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 Technologies
OraSure Technologies empowers the global community to improve health and wellness by providing access to accurate, essential information through effortless tests, collection kits and services. 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, pharmaceutical companies, commercial entities and direct to consumers. For more information on OraSure Technologies, please visit www.orasure.com .
The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s first quarter 2023 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 Carrie Eglinton Manner, President and Chief Executive Officer, Ken McGrath, Chief Financial Officer, and Scott Gleason, SVP Investor Relations and Corporate Communications. The call will include prepared remarks by management and a question and answer session.
In order to listen to the conference call, please register to obtain a dial in and pin at the following link:
register.vevent.com/register/BI1408073fde3e47ab889cfdc791e65ccf
To listen to the webcast, 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. It is recommended to dial-in 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 U.S. Food and Drug Administration (“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. The InteliSwab ® test’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 Department of Health and Human Services; Administration for Strategic Preparedness and Response; Biomedical Advanced Research and Development Authority, under contract number 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 Technologies
OraSure Technologies empowers the global community to improve health and wellness by providing access to accurate, essential information through effortless tests, collection kits and services. 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, pharmaceutical companies, commercial entities and direct to consumers. For more information on OraSure Technologies, please visit www.orasure.com .