Investor Relations | Ortho-Clinical Diagnostics So a lot of the mix that we're going to see also depends on prevalence and relative prevalence to other of the respiratory pathogens that we're going to see. Yeah. And this is from a prior $1.38 billion to $1.45 billion, which represented a margin of 36.5% to 37%. Would just love your sort of thoughts around does that number sound right to you? Quidel had been accused of infringing patents on Becton's strep and chlamydia products. You may now disconnect your lines. The transaction is expected to generate substantial synergies on both the top- and bottom-line. And that's one of the bigger variables. On a per instrument basis, non-COVID Sofia revenue for the trailing 12 months was the highest since the third quarter of 2021 and continues to strengthen, driven by our full respiratory menu. This conference call is being simultaneously webcast on the Investor Relations page of our website. When I look at our financial results for the quarter of this year, the third quarter, the underlying base business grew 6% year-over-year despite industry-wide headwinds and constant currency revenue growth, excluding COVID-related revenue grew 3%, driven by strength in our point of care and transfusion medicine businesses. So we're going to need that capacity. Under the terms of the agreement, which was unanimously approved by the Board of Directors of each company, Quidel will acquire Ortho for $24.68 per share of common stock, for a total consideration of approximately $6.0 billion, including $1.75 billion of cash, funded through cash on the balance sheet and incremental borrowings. Quidel's core competencies and capabilities include immunoassay development, automated manufacturing, monoclonal antibody characterization and development, and molecular assay development. [Operator Instructions] Our first question is with Andrew Cooper from Raymond James. The conference call may be accessed by dialing (844) 200-6205 from the U.S. or (929) 526-1599 if dialing internationally and using the required pass code 180-525. These documents may be obtained free of charge from the sources indicated above. The last remaining team to fully integrate is the U.S. commercial team. We are planning for manufacturing of the vitro's line of analyzers in China, given localization requirements and expect these efforts to have an impact in 2023. There are no differences in the number of billing days in '22 compared to '21. Accounting for Cross-Country Income Differences, 2022, 14th Annual Feldstein Lecture, Gita Gopinath, "Managing a Turn in the Global Financial Cycle", 2022 Summer Institute Methods Lectures: Empirical Bayes Methods, Theory and Application, 2022 Nobel Prize Celebrates Banking Research, The Bulletin on Retirement and Disability, Productivity, Innovation, and Entrepreneurship, Boosting Grant Applications from Faculty at MSIs, Conference on Research in Income and Wealth, Early Indicators of Later Work Levels, Disease and Death, Improving Health Outcomes for an Aging Population, Measuring the Clinical and Economic Outcomes Associated with Delivery Systems, Retirement and Disability Research Center, The Roybal Center for Behavior Change in Health, Training Program in Aging and Health Economics, Transportation Economics in the 21st Century. For 2023, this provides us with a blended rate of 3.16%. It is the vitality that fuels hearts, minds, and spirits and is fundamental toQuidelOrtho Ortho Clinical Diagnostics, publishes this site and is solely responsible for its content. Thanks for taking the questions and glad to be back on the call with you all. Thanks. The only addition is that we're pulling up some of our thoughts with respect to 510(k) submission. Thanks, Bryan. QuidelOrtho All forward-looking statements are based on information currently available to QuidelOrtho and speak only as of the date hereof. 2023 Ortho Clinical Diagnostics. The transaction is expected to accelerate an innovative pipeline and milestone execution through complementary capabilities and product development synergies. With that, I'd like to turn the call over to Joe to further discuss our Q3 financial results and 2022 guidance. During the quarter, we executed new interest rate hedges that lock in fixed rates for at least 70% of our debt for the duration of our term loans, while leaving sufficient opportunity for an accelerated pace of debt paydown without risking an impact on the recognition of hedge accounting. We are seeing greater access semiconductor chips and expect challenges to further ease as we move through 2023. And we did raise the range on that as to what we thought a normal respiratory season would look like, particularly with influenza. Is that right? QuidelOrtho has no obligation to update any of the forward-looking information included in this press release, whether as a result of new information, future events, changed expectations or otherwise, except as required by law. Quidel Corporation published this content on 23 December 2021 and is solely responsible for the information contained therein. We believe these 2 lines should be more than sufficient to meet pull-through demand given the number of instruments we expect to ship. And then maybe one just on the P&L a little bit. Those unable to access the webcast may join the call via phone by dialing 844-200-6205 (domestic) or 929-526-1599 (international) and entering Conference ID number 968016. And we've already said that like many others that COVID seems like it's moving into more of an endemic stage. Adjusted EBITDA for the third quarter of 2022 was $226.8 million, compared to $435.2 million in the third quarter of 2021. Published online by Cambridge University Press: But if you sort of go through the commentary of the other large IVD manufacturers and when you're talking about sort of endemic market numbers for COVID testing, you just add a few of them up and you get to a market that's probably $5 billion plus, pretty easy and endemic stage. Ortho shareholders will receive $7.14 in cash per common share and 0.1055 shares of common stock in the combined company for each Ortho common share, with Ortho shareholders expected to own approximately 38% of the combined company. Cost of sales, excluding amortization of intangibles, Weighted-average shares outstanding - basic, Weighted-average shares outstanding - diluted. We believe that our ability to pivot quickly away from sole-source supplier agreements could be a competitive advantage especially relative to smaller competitive entrants in our space. After submitting your request, you will receive an activation email to the requested email address. Thank you for your participation. And then the visibility into that normalizing, I think you said kind of throughout '23. Starting with a breakdown of revenue on Slide 9. We're counting on a respiratory season that creates disease and creates the need for people to want to know and -- whether that's at the doctor's office or on their own at retail. Well, first, welcome back, Andrew. QuidelOrtho Corporation is a major American manufacturer of diagnostic healthcare products that are sold worldwide. The Companys actual results of operations and financial position will differ, potentially significantly, from the Supplemental Combined Information reflected in this press release as a result of the methodology used to prepare the Supplemental Combined Information as well as a variety of factors, including but not limited to the effect of certain expected financial benefits of the Combinations (such as revenue and cost synergies), the anticipated costs to achieve these benefits (including the cost of integration activities), tax impacts, and changes in operating results following the date of this press release. Foreign currency translation negatively impacted sales growth by approximately 230 basis points for the third quarter of 2022. And then, Joe, maybe one for you. You must click the activation link in order to complete your subscription. COVID-related revenue totaled $171 million in the quarter. Responsible Advertising and Sales Statement, Diversity, Equity, and Inclusion Statement. QuidelOrtho Reports Preliminary Revenue Results for Fourth Quarter and First, our Labs business. During the quarter, we returned to shelves at all major retail distributors. Casey, your line is open. QuidelOrtho Formed by the Completion of Transaction Combining Quidel We're monitoring the situation closely for further outbreaks and regional lockdowns and will increasingly manage our channel to meet demand in other regions. All rights reserved. The website replay will be available for one year. Obviously, we're hedging the launch a little bit by suggesting that we're going to be moving analyzers that were slated to be shipped earlier in the U.S. in 2023, and we're moving those mainly to Europe, where we think there's plenty of demand and opportunity. Quidel Corporation QDEL recently entered into a definitive agreement to acquire Ortho Clinical Diagnostics Holdings plc OCDX. media@quidelortho.com, Declaration for California Compliance for Healthcare Providers. And so I think you'll find it to be quite interesting. Do you want to add something, Joe? This merger, although bigger, is certainly simpler and more straightforward than what we accomplished very well with the integration of the Alere assets, a two-year process that required a dependence on transition services and significant third-party involvement to operate the business. The companies highly complementary, world-class product and service offerings provide opportunities to capture significant growth globally while enhancing cross-selling opportunities across a diversified customer and channel mix. In the retail market for COVID test, we continue to work with all major retail distributors on ways to expand our availability. We expect our transfusion medicine business to grow mid-single digits, but instrument supply issues are negatively affecting labs revenue. Importantly, the Beckman BNP assay transition disproportionately impacts our China business, representing an 8 percentage point headwind to revenue growth in the quarter. In terms of returning cash to our stockholders, we repurchased 953,000 shares of our common stock for $74 million through our new share repurchase program. Product training and cross-selling are expected to begin in the first quarter. This was largely due to the consummation of the business combination that occurred on May 27, 2022 pursuant to a Business Combination Agreement entered into as of December 22, 2021, by and among Quidel Corporation (Quidel), Ortho Clinical Diagnostics Holdings plc (Ortho), QuidelOrtho, and the other parties thereto (the Combinations). It's more that we're hedging. QuidelOrtho Reports First Quarter 2023 Financial Results In addition to working papers, the NBER disseminates affiliates latest findings through a range of free periodicals the NBERReporter, the NBER Digest, the Bulletin on Retirement and Disability, the Bulletin on Health, and the Bulletin on Entrepreneurship as well as online conference reports, video lectures, and interviews. The City Code on Takeovers and Mergers does not apply to the proposed business combination. Moreover, our cumulative Sofia placements now total 83,000 instruments, up from 80,000 last quarter, which may suggest healthy new instrument placement demand over the next several quarters. The Company will provide updated 2022 financial guidance during its financial results conference call today. 16 min read Highlights First quarter revenue of $846.1 million decreased by 16% as reported with. It sounds like you're basically kind of saying if the U.S. gets pushed out, well, to sell more in Europe. Quidel (QDEL) Inks Buyout Deal to Solidify Its Diagnostics Arm These risks and uncertainties include, but are not limited to, those factors identified under Risk Factors in our quarterly report on Form 10-Q filed with the SEC on August 5, 2022, and subsequent reports filed with the SEC. The higher EPS in the third quarter of 2021 was driven by the greater COVID-19 volume and then in the third quarter of this year. As Doug discussed, we are concentrating both our product output and all near-term commercial activities for Savanna in Europe and select other CE Mark countries to meet demand in 2023. Presentation materials will also be posted to the Events & Presentations section of the Investor Relations page of the Companys website at the time of the call. Teams have been engaged, cooperative and professional, fully embracing the collaborative culture and teamwork needed to deliver on our commitments when we announced the integration of the companies. Our integration program management group continues to attract 15 active work streams with milestones identified through the first quarter of 2023 and continued planning for future state operational processes and efficiencies. WHERE YOU CAN FIND ADDITIONAL INFORMATION. Quidel Corporation (NASDAQ: QDEL) (Quidel) and Ortho Clinical Diagnostics Holdings plc (NASDAQ: OCDX) (Ortho) today announced that they have entered into a definitive agreement in which Quidel will acquire Ortho, one of the worlds largest in vitro diagnostics companies, for $24.68 per share of common stock using a combination of cash and newly issued shares in the combined company, representing a 25% premium over Orthos closing price on December 22, 2021 and an equity value of approximately $6.0 billion. Gross profit margin for the quarter was 56.9%, a 540 basis point decrease versus prior year largely due to the decline in COVID-related revenue as well as FX headwinds, partially offset by base business mix. We are amid our annual operating plan process and believe that there could be further upside. With that, I'd like now to turn the call back over to Doug to make a few summary comments. I'll be honest with you, Andrew. We are pleased with the operating leverage we generated, and the better-than-expected earnings results position us to raise our guidance for the full year.. Or is this more or less getting everyone on the same page to what to expect from the new QuidelOrtho. Instrument revenue declined 20% as global semiconductor chip availability continues to limit our ability to deliver instruments in our Labs business. However, due to continuing lockdowns and localization requirements, full year revenue in China is expected to be soft. QUIDELORTHO CORP Management's Discussion and Analysis of Financial Condition and Resul.. RBC Boosts Price Target on QuidelOrtho to $133 From $130, Maintains Outperform Rating, QuidelOrtho Corporation Revises Earnings Guidance for the Year 2023, Transcript : QuidelOrtho Corporation, Q1 2023 Earnings Call, May 03, 2023, QuidelOrtho's Q1 Adjusted EPS, Revenue Drop. At our McKellar site, we have capacity and manufacture up to 4 million Sofia kits per week. All companies are facing supply chain challenges, but not all are able to address them equally. Alex, your line is open. Adjusted EBITDA margin of 29% and adjusted EPS of $1.85 reflect very good operating leverage and solid earnings for the quarter. hasContentIssue false. With me today to discuss our financial results are Doug Bryant, QuidelOrtho's Chairman and CEO; and Joe Busky, Quidel Ortho's Chief Financial Officer. Furthermore, such forward-looking statements represent management's judgment and expectations as of today. Neither Quidel or Ortho undertakes an obligation to update any of the forward-looking information included in this press release, whether as a result of new information, future events, changed expectations or otherwise, except as required by law. In connection with the proposed business combination transaction among Quidel Corporation (the "Company"), Ortho Clinical Diagnostics Holdings plc ("Ortho") and Coronado Topco, Inc. ("Topco"), Topco will file a registration statement on Form S-4 with the Securities and Exchange Commission (the "Commission") that will contain a joint proxy state. QuidelOrtho Corporation is a major American manufacturer of diagnostic healthcare products that are sold worldwide.. On May 8, 2020 the U.S. Food and Drug Administration (FDA) has issued the first emergency use authorization (EUA) for a COVID-19 antigen test, a new category of tests for use in the ongoing pandemic. The combined company will also acquire Orthos existing net debt of $2.0 billion. K.J. Media Contact Our two automated high-volume lines are expected to be up and running by mid-2023, ahead of our U.S. commercial launch. Information about Orthos directors and executive officers and their ownership of Orthos ordinary shares is set forth in Orthos Annual Report on Form 10-K filed with the Commission on March 19, 2021. SAN DIEGO-- ( BUSINESS WIRE )--QuidelOrtho Corporation (NASDAQ: QDEL) ("QuidelOrtho") announced completion of the transaction combining Quidel Corporation ("Quidel") and Ortho Clinical. To continue reading it, access the original document here. Thank you, operator. QuidelOrtho will hold a conference call today at 2:00 p.m. PT / 5:00 p.m. https://www.businesswire.com/news/home/20221102006052/en/, Investor Contact: Additional risks and factors are identified under "Risk Factors" in the Company's Annual Report on Form 10-K filed on February 19, 2021 and subsequent reports filed with the Commission, and will be identified under "Risk Factors" in the joint proxy statement/prospectus when it is filed with the Commission. In closing, our first full quarter as a combined company does give us added confidence in our strategic priorities and our ability to continue delivering strong financial results over the long term. Further, the combined company will be poised to meet patient testing needs at all points of the care continuum reference labs, hospitals, physicians offices, urgent care centers and at-home / retail locations. QuidelOrtho Or is there something else going on there? As you can imagine, many of the most important R&D projects are to advance our Savanna, Sofia in vitro portfolios. So Patrick, remember that most -- really all of that 600 unit backlog that we discussed is on the lab side of the business. And at the midpoint, this assumes about a 40% sequential growth for flu and ABC combo from Q3 to Q4. Which is still quite good which means historically, remember, Andrew, we used to report on our robust respiratory season, flu margins in the mid- to high-70s in terms of gross margin. Our second low-volume line is expected to be brought online during the fourth quarter. We had a cost and a running out -- and I think the public is also predisposed now more than ever to want to be tested to find out what do they have actually. ), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741 Elsevier. Okay. SAN DIEGO, January 06, 2023 -- ( BUSINESS WIRE )-- QuidelOrtho Corporation (Nasdaq: QDEL) (the "Company" or "QuidelOrtho"), a global provider of innovative in vitro diagnostics technologies. To join the live webcast, participants may click the following link directly:https://event.on24.com/wcc/r/3578343/A9A0A0558343FD8A113A45315FB34143, or access the event via the Investor Relations section of Quidels website (http://ir.quidel.com). QuidelOrtho Corporation (QDEL) CEO Douglas Bryant on Q2 2022 - Earnings We are, therefore, not including any additional government revenue in our 2022 guidance. A replay of the conference call will be available shortly after the event on the Investor Relations page of the Companys website, under the Events & Presentations section. The point-of-care market is showing signs of strength, which we expect to translate into strong non-COVID recurring revenue pull-through on our large base of Sofia instrument placements. For more information, please visit www.quidelortho.com. Ortho Clinical Diagnostics North America, which is our largest geography by revenue, delivered strong growth, excluding COVID-related revenue, driven by point-of-care and transfusion medicine. Thanks. These results reinforce our view that the Sofia system has been the beneficiary of tailwinds associated with increased respiratory testing, especially among the 83,000 cumulative instrument placements. We're working through those supply chain and manufacturing issues. The combination with Ortho will help solidify Quidel as a leader in the diagnostics industry, bringing together innovative, complementary products, solutions, and services that enhance the health and well-being of patients across the globe, said Douglas Bryant, President and Chief Executive Officer of Quidel, who will serve as Chairman and Chief Executive Officer of the combined company. We'll probably talk more about that as we move into 2023 on how much of that 600 unit backlog, we think we can actually wind down in 2023. So the margins on instrument sales are typically less than the margins you see on reagents and consumables. Transfusion medicine revenue grew 1% with mid-single-digit growth in donor screening driven by plasma demand, partially offset by softness in immunohematology. Thanks for squeezing me in. [9], In February 2004, Inverness Medical Innovations sued Quidel for patent infringement. So again, the underlying base business was up 12% year-over-year. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: failure to complete the proposed transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary regulatory and shareholder approvals, the sanction of the High Court of Justice of England and Wales and satisfaction of other closing conditions to consummate the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction; the challenges and costs of closing, integrating, restructuring and achieving anticipated synergies; the ability to retain key employees; and other economic, business, competitive, and/or regulatory factors affecting the businesses of the Company and Ortho generally. The combined organization will unite world-class technologies and platforms to benefit customers with expanded access to clinical chemistry, immunoassay, molecular diagnostics, immunohematology, donor screening, and point-of-care diagnostics offerings. Molecular Diagnostics revenue declined 72% in the quarter and declined 1%, excluding COVID-related revenue business. Quidel's current products fall generally into these categories: (1) lateral flow, where it focuses on infectious disease and reproductive health; (2) direct fluorescent antibodies (DFA), with expertise in infectious disease and virology; (3) micro-titer production, with a focus on bone and complement pathway markets; (4) fluorescent immunoassay products (Sofia); and (5) molecular diagnostic products. On the other side, what we're suggesting is the demand for the slides for the vitro systems have steadily increased. It answers the question "how much of the cross-country income variance can be attributed to differences in (physical and human) capital, and how much to differences in the efficiency with which capital . No, that's good. For the remainder of the year, our primary commercial focus is to finalize the integration of the U.S. commercial organization, close 2022 strong and be ready to enter our major markets as QuidelOrtho in January of 2023 as scheduled. And generally, what's their plan to triage fevers and coughs between testing for flu, testing for COVID or the combo? But when you look at the combo opportunity, we find ourselves in a situation of what fourth quarter or so where customers ordered a lot of the combo product, but the prevalence of flu is low. "useRatesEcommerce": true You can identify these statements and other forward-looking statements in this press release by words such as may, will, would, expect, anticipate, believe, estimate, plan, intend, continue, or similar words, expressions or the negative of such terms or other comparable terminology. 70% of all medical decisions are made because of information gained from diagnostic tests. Yeah, that's right. Ortho supports over one million of these tests every day, impacting over 800,000 patients. Yeah, I would just add, Alex, that this flu season did start a little earlier than expected. We've identified every role, and by the end of this year, the new organizational structure will be communicated. But would it be a better idea to ship those boxes and that reagent to Europe where I can continually run the product throughout the respiratory season, make sure I captured the first quarter opportunity and then also be ready to go globally in the fourth quarter of 2023. This strong third quarter reflects a remarkable cohesion, agility and performance of the overall team, added by the strength of our comprehensive product portfolio and an expanded global footprint. Development Accounting is a first-pass attempt at organizing the answer around two proximate determinants: factors of production and efficiency. In summary, the strong third quarter results enabled us to raise our full year guidance. Thank you, guys for taking the questions. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in the appendix to the investor presentation and press release issued this afternoon, both of which are available on the Investor Relations page of the Quidel website. You can identify these statements and other forward-looking statements in this document by words such as "may", "will", "would", "expect", "anticipate", "believe", "estimate", "plan", "intend", "continue", or similar words, expressions or the negative of such terms or other comparable terminology. Copyright 2023 Surperformance. And the reason we're doing that, obviously, is we're in ongoing dialogue regarding potential EUA for Savanna, obviously, for the U.S. And we're in ongoing discussions and dialogue to see what further we need to provide in order to get that done if indeed we're successful. We now have approximately 600 open labs instrument orders relatively flat sequentially. Ortho's customized solutions enhance clinical outcomes, improve efficiency, overcome lab staffing challenges and reduce costs. Adjusted net income, adjusted EBITDA and adjusted diluted EPS eliminate impacts of certain non-cash, unusual or other items that the Company does not consider indicative of its ongoing operating performance, and the Company generally uses these non-GAAP financial measures to facilitate managements financial and operational decision-making, including evaluation of the Companys historical operating results and comparison to competitors operating results. Adjusted EBITDA margin contracted 1,300 basis points year-over-year to 28.9%, better than our expectations due to the strong revenue. For the remainder of my comments, I will focus on the strategic priorities that I outlined on our last earnings call, which are: one, integration and corporate culture; two, product innovation; three, global commercial excellence; four, operational excellence; and five, capital deployment. Additional risks and factors are identified under Risk Factors in QuidelOrthos Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the Commission) on August 5, 2022 and subsequent reports filed with the Commission. Many teams across the organization have demonstrated exceptional focus, agility and shared purpose as we've introduced new structures, processes and systems to optimize our operations. Tables above include Ortho revenues as if the acquisition had occurred on January 4, 2021. The joint proxy statement/prospectus will be mailed to the Company's shareholders and Ortho's shareholders when available. Quidel management will host a conference call to discuss the transaction today beginning at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time). While the accretion of our share repurchase program was particularly attractive in the third quarter, relative to debt pay down, looking ahead, we intend to prudently balance our share repurchase program and our debt paydown. What's the launch assay? Maybe first, Doug, if you could just give us a little bit of an update on the Savanna time lines with a little bit more detail in terms of any changes to which assays are leading other than, obviously, under the EUA and when you expect to actually submit those if you're implying a mid-'23 launch? Thanks to the extraordinary dedication and cross-organizational collaboration of our people, we're achieving critical integration milestones actively pursuing exciting new cross-selling opportunities and hitting our synergy targets. But we did calculate that if we were able to wind down that 600-unit backlog, it would be an incremental two points of growth for the full year numbers.