Several companies have reported quarterly results over the past couple of days, and those offering testing for COVID-19 have seen impressive numbers.
Standing out was San Diego-based Quidel Corp., whose numbers caught the attention of William Blair’s Brian Weinstein. Indeed, its $174.7 million in revenue far exceeded his organization’s estimate of $160 million, driven by influenza. “On the earnings front, EBITDA were around $70 million (40% margin) and EPS were $1.22, which simply crushed our paltry estimates of $59.6 million and $0.99, respectively.”
Also reporting positive results were Franklin Lakes, N.J.-based Becton, Dickinson & Co. (BD) and Bio-Rad Laboratories, of Hercules, Calif., the former of which beat Street expectations in terms of revenue.
For Quidel, COVID-19 played a big role in its quarterly success. Weinstein has written that Quidel is in a position to participate across the testing continuum. Of note, the company has a point-of-care immunoassay antigen that can run on its Sofia that should launch very soon.
“The national media has been clamoring for this and experts have been talking confidently about a rapid flu test-like solution coming that will change the game and give flexibility in testing asymptomatic and symptomatic in decentralized locations,” Weinstein wrote. “That is this!”
Further, commentary from the company's May 6 earnings call, coupled with management follow-up boosted his confidence that the testing dynamic could change if the antigen test launch goes as anticipated.
“If successful in obtaining EUA [emergency use authorization] for this test, Quidel would play a major part in this and, along with Becton Dickinson who is the other rapid antigen player, begin to democratize testing and provide a rapid, scalable solution that complements the centralized testing solutions that have emerged from the likes of Abbott, Hologic, Luminex, Qiagen, and others.”
CFO Randy Steward noted during the call that rapid immunoassay grew 54% vs. the prior year, while molecular diagnostic solutions jumped 45%. At the same time, specialized diagnostic solutions grew 19%.
Alex Nowak with Craig-Hallum Capital asked about the market opportunity on the COVID Sofia test and how things will look in a post-COVID world. “It's an interesting question, and I don't have an answer for you,” replied CEO Doug Bryant. The answer could depend on how well a vaccine does.
William Blair’s Andrew Brackmann also asked about the Sofia antigen and serology assays for COVID-19, specifically about any hurdles to bringing to market. Bryant responded that the company is moving ahead of what it previously predicted, adding that he could not be more specific other than it is in the manufacturing phase.
“We do have an intent to – as a first step to ship about 40,000 tests into the market imminently, in order to do studies that will be useful in demonstrating the performance of this product,” Bryant continued. Subsequently, the company will move on to target the traditional professional segment, followed by pharmacies and schools.
“And then there's another category, dentists, ophthalmologists, optometrists and finally the travel industry. So, in terms of timing, I think more about timing in terms of ramping up manufacturing.”
BD also shines
For its part, BD revealed better top-line and EPS results in the second quarter vs. revised Street estimates, even while pulling its guidance for the year. “BDX outlined the preliminary COVID-19 impact from April ($240M hit partially offset by $70M MMS benefit), which is moderate relative to most Med Tech peers,” said Cowen’s Josh Jennings. Pharmaceutical systems and diabetes care beat the consensus, even as medication management solutions and medication delivery solutions fell.
Still, the company reported quarterly revenues of $4.253 billion, representing an increase of 1.4% as reported over the prior-year period, or 2.4% on a currency-neutral basis.
During the call Kristen Stewart with Barclays asked whether the company was seeing some hopeful signs in terms of surgeries across the U.S. or whether it was regionalized.
“It is very regionalized. And we certainly – we're doing a lot of primary research surveys of our customers directly to have that real- time data,” CEO Tom Polen explained. “And what our data shows is, again, a very regionalized kind of health care recovery.”
Also posting positive results was Bio-Rad, which recently launched its SARS-CoV-2 Serology test. “[W]e are also now scaling manufacturing in both the U.S. and in Europe to meet expected demand,” CEO Andy Last said during a call on results.
As with other companies, Bio-Rad said it was withdrawing its previously reported guidance as a result of COVID-19. CFO Ilan Daskal noted that net sales for the first quarter were $571.6 million, representing a 3.2% increase on a reported basis vs. $554 million during the same quarter last year.
Brandon Couillard, of Jefferies, asked about the serology test, noting that the company had talked about measuring antibodies eight days post-infection. Others have referred to a 21-day window and have concentrated on IgE vs. Bio-Rad’s total antibody approach.
“Our product is designed to detect IgM, IgG and IgA. And IgM is the first antibody type that appears post-symptom onset as early as six, seven days post-infection. So, by virtue of having a kit that's designed to detect all of these serotypes it enables earlier detection,” explained Dara Grantham Wright, executive vice president and president of the clinical diagnostics group.