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Biotech / Medical : QDEL - Quidel more quick diagnosis -- Ignore unavailable to you. Want to Upgrade?

To: R. Jaynes who wrote (1354)	1/24/1998 10:36:00 AM
From: Robert Busse	Respond to of 1693

Thanks!! BOB

To: R. Jaynes who wrote (1354)	1/24/1998 3:07:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 1693

CC Notes: 1) Q/Q (year ago) sales increased 6%, but US sales increased 12%. a) US sales increased primarily because of stellar growth in consumer sales of strep and, to a lesser degree, pregnancy tests. Consumer sales (done though a marketer called Ansell) increased 71%. b) Foreign sales decreased for two reasons. First, they lost distributors in Japan and Korea (one of their Korean distributors went under, and they are being careful to find a new distributor with adequate capitalization.) Second, even though European sales increased about 15% in local currencies, the strength of the US dollar actually resulted in a loss of apparent sales. 2) Gross Margins were severely impacted by the increased patent royalties owed. However, the fact that they had almost the same earnings as last year is a testament to the fact that they have managed to impliment some good increases in manufacturing efficiencies. 3) R&D expenses outside of externally funded products (influenza and genital herpes by Glaxo) actually decreased because they are spending the money to increase manufacturing efficiencies. 4) They expect that the newly approved HCG test (a pregnancy test which is more sensative than current Quidel tests) will increase market share from teens to twenties. This is a $50M market, so you do the math (hint somewhere between $2.5M and $7.5M in additional sales.) 5) They expect to go from 30% market share to 50% market share for the H. Pylori tests - although they gave no reason, so take it with a grain of salt. 6) The infuenza test is expected to start sales at the same time as the Glaxo product, and that is expected to be 18 months from now. 7) No dates were given on the genital herpes tests although it was discussed. (The veterinerian tests and other products in the pipeline were not discussed.) 8) No aquisitions in the near or medium term are expected, but the CEO refused to discuss details which leads me to believe that they are in discussions. 9) One analyst whined about the price not going up, and the CEO responded that he thought they were doing pretty well, and he (the CEO) certainly had no intention of selling his shares (The analysts could have asked lots of useful questions, such as 'What is your target Gross Margin, and when do you expect to reach it?', or 'What about some of your other new projects such as the vet products?', but instead this guy spent his time complaining. Analysts!!) Clark PS I'll call next week to see if I can't get some of my questions answered. But from the conference call I would expect sales to increase 25% over the next year, and I would expect GM to continue to improve (to 56%?) and operating expenses to continue a minimal climb. If all of this happens I would expect to see earnings of $0.14 per share in the quarter one year out.