OraSure Technologies(OSUR) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net revenues for Q1 2020 were $31.6 million, a 5% increase from $30.1 million in Q1 2019. Excluding the cryosurgical product line sold in 2019 and including Diversigen's contribution, revenues grew 8% [17][22] - The net loss for Q1 2020 was $7.3 million or $0.12 per share, compared to a net loss of $3.3 million or $0.05 per share in Q1 2019 [29] - Cash balances at the end of Q1 2020 totaled $176 million, providing a strong liquidity position to navigate uncertainties [21][30] Business Line Data and Key Metrics Changes - International HIV sales increased 74% to $6.9 million, driven by strong demand for HIV Self-Tests [18][23] - Domestic HIV sales decreased 2% to $4.2 million due to COVID-19 impacts on public health testing [23] - Domestic HCV sales decreased 18% to $1.5 million, while international HCV sales decreased 25% to $1.1 million [24] - Molecular revenues increased 16% to $13.8 million, with genomic product revenues growing 14% to $9.1 million [25][46] Market Data and Key Metrics Changes - The COVID-19 pandemic has caused delays in HIV and HCV testing programs, impacting domestic sales [13][24] - Increased sales of In-Home HIV tests were noted as public health strategies adapted to COVID-19 [14][38] - The molecular solutions segment saw a 25% revenue increase, attributed to a shift from blood to saliva collection due to COVID-19 [46][50] Company Strategy and Development Direction - The company is focusing on developing COVID-19 testing products, including a pan-SARS coronavirus rapid antigen in-home self-test and an oral fluid microplate test for antibodies [9][41][44] - The strategy includes leveraging existing capabilities in infectious disease diagnostics to address COVID-19 testing needs [8][64] - The company is exploring collaborations to expand production capacity and meet high demand for COVID-19 products [45][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged mixed impacts from COVID-19, with some revenue pressures but also new opportunities arising from increased demand for testing [11][31] - The company remains optimistic about the growth of its HIV Self-Testing business and the potential for new COVID-19 products to drive future revenues [64][65] - The management has withdrawn financial guidance for 2020 due to uncertainties related to the pandemic [31] Other Important Information - The company has implemented enhanced hygiene and social distancing protocols to ensure employee safety during the pandemic [12] - A significant organizational change was announced, with a new leader for the infectious disease business unit set to join [59][60] - The company is integrating its microbiome laboratory businesses and relocating to a new facility to enhance operational efficiency [57][58] Q&A Session Summary Question: Sensitivity and specificity of the rapid test - Management indicated a history of achieving high sensitivity and specificity in their product portfolio, with ongoing development for the new rapid test [68][69] Question: Pricing strategy for the home test - Management noted that pricing strategies are still under consideration and will be informed by their experience in the HIV market [72][73] Question: Manufacturing capacity for tests - Management discussed the need for significant capacity increases to meet potential demand for COVID-19 tests, with current production capabilities in the tens of millions of tests per year [74][75] Question: COVID-19 situation in sub-Saharan Africa - Management highlighted the importance of continuing HIV testing in Africa amidst COVID-19 and the potential for synergies in sales channels for both HIV and COVID-19 tests [78][81] Question: Future positioning of the company - Management expressed a vision of evolving into a broader infectious disease company, leveraging learnings from COVID-19 to address future public health needs [82][85] Question: Overall outlook considering COVID-19 impacts - Management sees more strength in tailwinds than headwinds, with optimism about the growth of the COVID-19 related business despite some negative impacts [88][89]