News Column

OraSure beats estimates, turns fourth quarter profit

February 5, 2014

By Scott Kraus, The Morning Call (Allentown, Pa.)

Feb. 05 -- Bethlehem -based medical device and testing company OraSure Technologies reported record fourth quarter and annual 2013 revenues Wednesday on increased sales of its OraQuick In-Home HIV and OraQuick rapid HCV tests and genetic testing products produced by its DNA Genotek division. Reporting $28.8 million in net fourth quarter revenues, OraSure beat analysts' projections and its own prediction of $27.5 to $28.0 million for the quarter. Fourth quarter profits of $6.2 million , translating to $0.11 per share also beat expectations of $0.07 to $0.08 per share. That compares to a loss of $5.9 million for the fourth quarter of 2012. While OraSure again failed to turn an annual profit, 2013 was a better year for the company. Consolidated net loss for the full-year 2013 was $11.2 million , or $0.20 per share compared to a net loss of $15.1 million , or $0.29 per share, for 2012. Improved cash flow increased cash reserves to $93.2 million . "We were right at the break-even point," said President and CEO Douglas A. Michels . The company's OraQuick HIV test produced net revenue of $9.1 million for the year. Its OraQuick rapid HCV test produced revenues of $5.1 million , a 32 percent increase over 2012. DNA Genotek revenues of $20.4 million were up 43 percent over 2012. OraSure continues to spend heavily promoting the HIV test -- $18.8 million in 2013 alone -- and recently re-targeted its advertising. "We're expecting sales of the OraQuick In-Home HIV Test to improve with the reframed and refocused promotional campaign," Michels said. "We need to see more sales growth to justify our current level of spending." It was a busy year for the Bethlehem -based medical device maker. The company ended a drug testing analysis partnership with Roche, replacing it with a new deal with Thermo Fisher Scientific that expanded its previous menu of five drug-testing products to 12. Termination of the Roche deal added $8.3 million to OraSure's bottom line in the fourth quarter in the form of a one-time payment. Results were also buoyed by a positive adjustment of $2.7 million in the way the company books sales of its HIV test. The company was also caught up in and Food and Drug Administration action involving DNA Genotek, its molecular collection and analysis subsidiary. The FDA requested additional documentation regarding design and development of its genetic testing devices, in particular the ORAcollect OC-100. Also, one of DNA Genotek's customers, 23andMe.com , was ordered to stop offering U.S. consumers genetic tests designed to predict predisposition to certain diseases such as cancer. That should cut into DNA Genotek revenues somewhat in 2014 depending on how 23andMe resolves its issues with the FDA , Michels said, but not significantly. "The rest of the DNA Genotek business will continue to grow," Michels said, with gains in academic research and new collection products in the pipeline. The company's stock closed at $5.55 on Wednesday, before the results were announced. That's in the middle of its 52-week price range. The stock hit a low of $3.75 a share in June, and peaked at $7.25 a share in November. OraSure expects consolidated net revenues of between $23 million and $23.5 million in the first quarter of 2014, and is projecting a consolidated net loss of approximately $0.13 -- $0.14 per share. ___ (c)2014 The Morning Call (Allentown, Pa.) Visit The Morning Call (Allentown, Pa.) at www.mcall.com Distributed by MCT Information Services


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Source: Morning Call (Allentown, PA)


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