Quidel, Pulling Off a Turnaround, Predicts Record Profit on Demand for Flu Tests
Quidel’s woes from earlier this year look like ancient history now, thanks to surging worldwide demand for its quick diagnostic flu tests. The San Diego-based company said today that it expects to eclipse its quarterly sales and profit records as health officials stock up in anticipation of a worsening global flu pandemic.
Quidel (NASDAQ: QDEL) says it has been manufacturing diagnostic flu tests seven days a week since April. The company didn’t disclose any hard numbers from its financial forecasts for the quarter ending Sept. 30, although its best quarter ever came in the first quarter of 2008, when it reported $40.9 million in sales, and operating income of $13.6 million.
The company has benefitted from the public health scare of the year, which really kicked off in June. That’s when Margaret Chan, the chief of the World Health Organization, declared a new strain of “swine flu” virus was causing the world’s first official flu pandemic in 41 years. Even though the flu season hasn’t officially started yet, other public health agencies have also urged officials to be prepared. Quidel specifically attributed its demand to increasing flu incidence rates from the U.S. Centers for Disease Control and Prevention, and a report last week from the American College Health Association said that more than half of the 189 colleges and universities it tracks have reported cases of students with flu. Washington State University, in Pullman, WA, has reported 2,500 flu cases before classes even start.
“Quidel has experienced an unprecedented volume of orders by hospital and physician office labs for the QuickVue tests in the third quarter of 2009, coinciding with the start of school. Previously we had anticipated that third quarter flu sales would be solely a factor of physicians initially stocking shelves in preparation for the traditional October through May flu season, but we are already receiving reorders for influenza products, which is activity that we usually see in the fourth and first quarters of the year,” said Douglas Bryant, president and chief executive officer of Quidel, in a statement today. “Despite having delivered a record level of flu tests to customers, we continue to manufacture at high levels given notable increases in non-seasonal demand.”
This surge represents quite a turnaround for Quidel, which had some rough moments earlier in the year. Back in March, Quidel lost 20 percent of its stock value one day when it warned investors that an unusually light flu season had hurt sales of its diagnostic tests for flu and Strep A. Quidel laid off 10 percent of its workforce a couple weeks later.