QDEL weekly update: Total Revenues up 47%, Worldwide Product Sales up 58%, earnings met expectations. Quidel is the market leader in rapid flu tests, with results in about minutes, according to the WHO. It is my belief that QDEL will benefit as governments and health officials try to control the spread of the avian bird flu and I would rather bet on a sure thing - a proven product that has the number one market share - than an unknown cure. Most reports are calling for more "surveillance," meaning more tests [See Hawaii news below]. Some competitor's tests are not "waived," meaning there are more restrictions to their use. QDEL's test is CLIA Waived.
On Tuesday, President Bush outlined his $7.1 billion National Strategy of Pandemic Influenza. The intent of the plan is to prevent or limit an influenza pandemic from entering the United States, stopping or limiting a pandemic domestically, and preparing the country’s infrastructure in the event of a pandemic...
As stated in the National Strategy, which is available at Pandemicflu.gov, the President’s plan consists of three “pillars”:
Preparedness and Communication..
Surveillance and Detection: Domestic and international systems that provide continuous “situational awareness,” to ensure the earliest warning possible to protect the population.
Response and Containment...
...The goal of the Surveillance and Detection pillar is ensure rapid detection and surveillance of influenza outbreaks both domestically and internationally. This pillar calls for $251 million in funding.
...What does this plan mean for investors? Although drawing conclusions is purely speculative, the President’s plan in its current form could represent a potential boon for companies with a rapid and accurate influenza diagnostic test while suggesting a potential bust for companies pursuing novel antiviral therapies.
...As a result, Quidel (ticker: QDEL) would benefit the most, in my opinion, if the government seeks to stockpile influenza diagnostic tests.
biotechstockblog.com
CLIA waiver means that almost any clinic/office can run the QDEL test. I run a primary care clinic without a complex lab. CLIA waived tests are a God send for us. I believe smaller primary care/family physicians will begin to use the test....primarily because it is good medicine but also because people will 'want to know that I DON't have bird flu' and for perceived medical liability concerns.
We had a SAR patient last year in our hospital...it was amazing how many of our patients (with a variety of symptoms) wanted us to "confirm" that they did not have SARs. http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077211&tid=qdel&sid=7077211&mid=6223
Non CLIA Waived tests must be performed in moderate or high complexity certified labs, which must comply with, as you can imagine, lots of complex regulations... By the CLIA law, waived laboratories perform only tests that are determined by FDA or CDC to be so simple that there is little risk of error. . .
In other words, onsite or field testing with Quidel’s rapid flu tests would be very easy, since Quidel’s tests are CLIA Waived. CLIA Waived tests could easily be done at locations such as schools, nursing homes, airports, isolation facilities and doctor’s offices.
However, rapid flu tests that are not CLIA Waived, have to be done in moderate or complex labs. This would require the patient to appear at the lab or transportation of a patient’s sample from the patient to a moderate or complex lab for processing.
finance.messages.yahoo.com
Reuters 11/4:
But scientists say it is steadily mutating and could acquire changes that make it easy to spread from human to human, triggering a pandemic in which millions could die, devastating societies, overburdening health systems and disrupting trade.
Highlighting a growing urgency, health and veterinary officials from around the globe meet in Geneva from Monday to discuss plans to control H5N1. "The Geneva summit will be a make-or-break time for the human threat of H5N1 influenza," The Lancet medical journal said in an editorial. "There remains no reliable early warning system in place across large parts of the world. This vacuum in surveillance poses the most serious threat to human health," it added.
reuters.myway.com
Nov 5, 2005 12:04 am US/Eastern
HONOLULU (AP) Hawaii became the first state in the nation this week to monitor airports for signs of bird flu or other flu viruses, health officials said.
Passengers and visitors at Honolulu International Airport will not be required to submit to examinations but WILL BE TESTED ONLY VOLUNTARILY USING NOSE OR THROAT SPECIMENS TAKEN AT THE AIRPORT CLINIC (THIS IS NOT JUST A TEMPERATURE TEST. THE SAMPLES ARE NOSE OR THROAT SPECIMENS, WHICH ARE NEEDED TO DO A RAPID FLU TEST).
QDEL's test is "patient friendly with a painless nasal swab procedure." Earnings estimates have increased in the 30 days: from .21 to .25 for this year, and .40 to .42 next year. I suspect they will increase again if more states (or countries) take similar actions like Hawaii.
Updated notes with Q3 results:
QDEL is a turn-around story that will be successful with or without the bird flu. Indeed, sales of pregnancy tests were up 21% It's successfully working its way through serious headaches, such as inconsistent earnings history, beaten up shareholders, patent infringement lawsuit, distributor problems, and last year, a canned CEO.
QDEL is a company targeting women and now has a female CEO with an impressive resume with many companies, including GE, where you don't get to run a division if you're a slouch. It markets its products through a network of distributors and sales people in the U.S., Japan, Europe, and Latin America. In 2003 QDEL had problems in Japan, the world's second largest flu market, but now claims success. Indeed, the latest PR highlighted a renewed focus on Japan, Germany and Italy where "acceptance of rapid tests provide significant sales and earnings growth opportunity. A reflection of this effort is our receipt of $13.1 million worth of orders for flu tests from the Company's partner in Japan." That's nearly 17% of last years total revenue, folks.
They are the leader in rapid tests for the flu virus, infectious diseases, and reproductive health. If the avian flu comes under control and the fear subsides, well, that is terrific news and I still own a successful, growing company that does many other things. Besides the fecal blood tests for early detection of colon cancer, they recently announced agreements with osteoporosis research institutions for the development of new markers which may benefit osteoporosis and post-menopausal patients. They also offer tests for pregnancy (market leader with 49% market share), metabolic bone markers, H. pylori and urinalysis.
Earlier this month QDEL was awarded the 2005 Growth Strategy Leadership Award for their proven growth, technological innovation and leadership. Noted was the increased market share and Quidel's ability to outsell its competitors of two different tests (by 3 to 1 and 2 to 1) its ability to accommodate multiple tests on a single device. According to a 2005 brand awareness study, their QuickVue brands were ranked number one in accuracy, reliability, consistency and ease of use.
A year ago QDEL earned .01; this year estimates are for .25 and next year .42. That's quite impressive growth, and increased estimates are very bullish as they bring valuations down. Yahoo shows only 1 analyst following QDEL; this may change, bringing in more attention and buyers of the stock.
Health officials say if the Avian flu does arrive in the U.S. people should use the same preventable measures as the regular flu, which includes testing to see if you have it. From Quidel's website, flutest.com, they state, "In order to effectively treat flu, it needs to be detected quickly." Any spread of the avian flu will lead to more concern (fear), more visits to the doctor, and more testing, IMO, benefiting QDEL because of their leadership product. A July 2005 report from the WHO gives Quidel's two tests an "easy" score in terms of General Use and Ease of Interpretation (the best possible score). Significantly, Quidel's Technician Attendance Time was only 2 minutes; many other manufacturers had times of 10-25 minutes. One other company scored as well as Quidel, but Quidel has the dominant market share.
Highlights of the recent quarter:
-Strong top line numbers: Revenues rose 47%, International product sales increased 130%, gross margin improved to 53% from 46% and operating expenses declined.
-Net earnings were $0.7 million, or $0.02 per diluted share (met expectations), as compared with a net loss of $0.12 per share.
-Acquisition of a high growth opportunity in acquiring an iFOBT blood test; More than 50 million of these tests are sold annually in the U.S.
-Market share has increased for all three product lines in 2005 with double-digit share growth in the Company's influenza tests.
-They have no debt and earnings will grow as they learn to execute better and put the past behind them.
Bullish comments from the CEO: "The Quidel team is exceeding the performance metrics we established as strategic imperatives approximately one year ago," said Caren Mason, Quidel's president and chief executive officer. "The management team has maintained a keen focus on these imperatives, and our progress has been excellent. We believe that our recent success shows we have the right strategies, products and people to build even greater value going forward." In the conference call she stated that they could meet the physician and government 'anticipated' test kit requirements if a Pandemic response was initiated.
Cramer's 'Mad Money' Recap: Quidel Passes the Test
11/4/2005 7:02 PM EST:
In order to stop the flu, you need to be able to diagnose it quickly, which is why Jim Cramer told viewers of hit "Mad Money" TV show on Friday that he likes diagnostic-test maker Quidel (QDEL), as a play on avian flu.
There's not enough flu vaccine, said Cramer, so a speedy and effective diagnostic tool is paramount in the fight against the flu, said Cramer.
Quidel is profitable and stands a good chance to make a lot of money from its test, said Cramer. Nevertheless, the most important thing Quidel has going for it is the "buzz" that will be sustained "as we keep talking about the flu," he said. |
