SAN DIEGO - QuidelOrtho Corporation (NASDAQ:QDEL), a diagnostics company, has received clearance from the U.S. Food and Drug Administration (FDA) for its VITROS syphilis assay. The assay, which is designed to detect antibodies to the bacteria that causes syphilis, Treponema pallidum, will be part of the company's VITROS 3600, 5600, and XT 7600 automated systems.
This approval comes as the U.S. faces a significant increase in syphilis cases, with over 176,000 new cases reported annually, marking a 36% rise since 2021. The VITROS syphilis assay is aimed at aiding the diagnosis of the infection in conjunction with other laboratory tests and clinical findings, though it is not intended for use in blood and tissue donor screening.
Bryan Hanson, Senior Vice President, President North American Commercial Operations at QuidelOrtho, highlighted the assay's efficiency and cost-effectiveness, stating that it aligns with the Centers for Disease Control and Prevention's (CDC) reverse testing algorithm for syphilis screening and allows for earlier disease detection.
Lily Li, Senior Director, Medical Scientific & Clinical Affairs at QuidelOrtho, emphasized the importance of timely and accurate diagnosis in effectively treating and controlling the disease, especially in light of the CDC's recommendation for using both nontreponemal and treponemal serologic tests to diagnose syphilis.
The expansion of QuidelOrtho's infectious disease test portfolio in the U.S. is part of the company's ongoing efforts to support healthcare providers with advanced diagnostic tools. This FDA clearance is expected to enhance the company's position in the market for infectious disease testing solutions.
The information for this article is based on a press release statement from QuidelOrtho Corporation.
In other recent news, Quidel (NASDAQ:QDEL) Corp reported substantial revenue of $637 million in the second quarter, surpassing the consensus estimate of $614 million. The company's adjusted EBITDA and margin also exceeded expectations, landing at $89.9 million and 14% respectively, compared to the forecasted $76 million and 12.4%. Despite these positive results, Quidel's management has decided not to reinstate the full-year 2024 guidance, which may be addressed in the upcoming third-quarter call.
Quidel is currently implementing cost-saving measures anticipated to save approximately $100 million, with about $50 million impacting the latter half of 2024 and the remaining $50 million in the first half of 2025. These savings are projected to be split mostly between selling, general, and administrative expenses (SG&A) and gross profit.
Citi recently adjusted its financial outlook on Quidel, reducing its price target from $48 to $44, while maintaining a Neutral rating on the stock. This revision takes into account Quidel's Q2 performance and the uncertainties in the near-term outlook. However, the company remains optimistic about its long-term financial health, targeting an adjusted EBITDA margin in the mid to high 20% range within the next 2-3 years.
Quidel is preparing for the launch of the Savanna instrument and expansion of diagnostic panels, which are expected to contribute to revenue growth. The company's long-term financial health is a focus, with expectations for the adjusted EBITDA margin to return to high-20s percentage points in the next two to three years. This outlook is based on mid-single-digit percentage growth in top-line revenue, which management believes is attainable once additional menu items for the Savanna diagnostic system receive approval and hit the market, targeted for 2025.
InvestingPro Insights
As QuidelOrtho Corporation (NASDAQ:QDEL) secures FDA clearance for its new syphilis assay, the company's financial health and market position become increasingly relevant to investors and stakeholders. According to InvestingPro data, QuidelOrtho has a market capitalization of approximately $2.94 billion. Despite the recent FDA approval, which could signal future growth, the company has been experiencing challenges, reflected in a negative P/E ratio of -1.57 and an adjusted P/E ratio for the last twelve months as of Q2 2024 standing at -10.22. This suggests that investors are cautious about the company's profitability.
Additionally, the company's revenue has seen a decline of 10.34% over the last twelve months as of Q2 2024. This could be a point of concern for investors looking at the company's performance and potential for recovery. However, the InvestingPro Fair Value estimate is at $59.47, which is higher than the previous close price of $43.79, indicating a potential undervaluation of QuidelOrtho's stock.
InvestingPro Tips highlight that QuidelOrtho operates with a significant debt burden and has not been profitable over the last twelve months. Yet, analysts predict the company will be profitable this year, which could be a positive sign for future financial health. It's worth noting that QuidelOrtho does not pay a dividend, which may influence investment decisions for those seeking regular income from their investments. For those interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/QDEL.
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