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OraSure (OSUR) 6 Nov 24 2024 Q3 Earnings call transcript
AInvestThursday, Nov 7, 2024 7:45 am ET
2min read
OSUR --

OraSure Technologies, a leading diagnostics and sample management solutions provider, recently held its third-quarter 2024 earnings call, offering insights into its strategic transformation and financial performance. The company's management team, including CEO Carrie Eglinton Manner and CFO Kenneth McGrath, provided updates on the company's progress in strengthening its foundation, elevating core growth, and accelerating profitable growth.

Strengthening the Foundation

OraSure reported a strong third quarter, with revenue at the top end of its guidance range and the receipt of initial international orders for its OraQuick HCV Self-test following WHO prequalification status. The company also announced its plan to exit the risk assessment testing business, which has become unprofitable due to external factors, by the end of 2024. This move is part of the company's strategic focus on markets that align with its strengths in diagnostics and sample management solutions, offering better opportunities for growth and profitability.

Elevating Core Growth

In terms of core business performance, OraSure's diagnostic products and sample management solutions have shown consistent growth. The company's international business had a particularly strong quarter, with solid momentum in the HIV, HCV, and syphilis tests, highlighting the need for a Syndemic Approach to rapid testing due to the significant overlap in patients at risk for these infections. OraSure is also seeing strong demand for its Diagnostics Direct Syphilis Health Check, which was launched at the end of Q1.

Accelerating Profitable Growth

Looking ahead, OraSure is focusing on innovation and strategic partnerships to drive growth. The company is planning a 2025 launch into the proteomics space, which represents a significant opportunity for expansion into blood collection with innovative protein stabilization technology. This move is expected to address high-growth applications such as liquid biopsy, Alzheimer's disease, and diabetes, among others. OraSure's proprietary innovation targets specific gaps in competitive offerings, with benefits including ambient temperature shipping and room temperature storage over a longer duration of time, as well as compatibility with traditional and next-gen proteomic technologies.

Financial Performance and Outlook

In the financial realm, OraSure reported a total revenue of $39.9 million in Q3, with core revenue of $37.8 million, representing a slight decline on a year-over-year basis. However, the company expects a return to core growth in the fourth quarter, with guidance of $35 million to $37 million in core revenue. OraSure also expects gross margins to remain consistent with Q3 levels, despite the exit of the risk assessment testing business and the international mix of revenue. The company's strong balance sheet, with $279 million in cash and cash equivalents, is enabling it to invest in its innovation roadmap and pursue strategic opportunities.

Conclusion

OraSure Technologies' third-quarter earnings call provided a comprehensive update on the company's strategic transformation and financial performance. With a focus on strengthening its foundation, elevating core growth, and accelerating profitable growth, OraSure is well-positioned to capitalize on the opportunities in the diagnostics and sample management solutions market. The company's innovative approach, strategic partnerships, and operational efficiency are key drivers of its optimism for the future. As OraSure continues to navigate the challenges and opportunities in its industry, investors and stakeholders will be watching closely for updates on its strategic initiatives and financial performance.

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