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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 5, 2021

 

OraSure Technologies, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware		001-16537		36-4370966
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

220 East First Street
Bethlehem, Pennsylvania	18015-1360
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 610-882-1820

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.000001 par value per share		OSUR		The NASDAQ Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by a check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

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Item 2.02 – Results of Operations and Financial Condition.

On May 5, 2021, OraSure Technologies, Inc. (the “Company”) issued a press release announcing its consolidated financial results for the quarter ended March 31, 2021 and certain other matters. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in this Item and attached Exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing. The fact that the information and Exhibit are being furnished should not be deemed an admission as to the materiality of any information contained therein. The Company undertakes no duty or obligation to publicly update or revise the information contained in this Current Report or attached Exhibit.

Item 7.01 – Regulation FD Disclosure.

 

On May 5, 2021, the Company held a webcast conference call with analysts and investors, during which Stephen S. Tang, Ph.D., the Company’s President and Chief Executive Officer, and Roberto Cuca, the Company’s Chief Financial Officer, discussed the Company’s consolidated financial results for the quarter ended March 31, 2021, and described certain business developments. A copy of the prepared remarks of Dr. Tang and Mr. Cuca is attached as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.

 

In addition, the Company hereby furnishes the Investor Presentation the Company will present to analysts and investors on or after the date hereof, which is attached as Exhibit 99.3 to this Current Report, is incorporated herein by reference and will be available on the Company’s website at www.orasure.com. The information contained in the Investor Presentation is summary information that is intended to be considered in the context of the Company's Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time.

The information in these Items and attached Exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing. The fact that the information and Exhibit are being furnished should not be deemed an admission as to the materiality of any information contained therein. The Company undertakes no duty or obligation to publicly update or revise the information contained in this Current Report or attached Exhibit.

Item 9.01 – Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release, dated May 5, 2021, announcing consolidated financial results of OraSure Technologies, Inc. for the quarter ended March 31, 2021 and certain other matters.
99.2		Prepared Remarks of Stephen S. Tang, Ph.D. and Roberto Cuca for OraSure Technologies, Inc. First Quarter 2021 Analyst/ Investor Conference Call Held May 5, 2021.
99.3		OraSure Technologies, Inc. Investor Presentation dated May 2021.
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

		ORASURE TECHNOLOGIES, INC.
Date: May 5, 2021		By:		/s/ Jack E. Jerrett
				Jack E. Jerrett
				Senior Vice President, General Counsel and Chief Compliance Officer

 

 

 

Exhibit 99.1

 

 

OraSure Technologies, Inc. Announces First Quarter 2021 Financial Results and Provides COVID-19 Update

 

First Quarter 2021 Net Revenues of $59 Million Increased 85% Over 2020, Driven by $27 Million in Sales of Sample Collection Devices for COVID-19 Molecular Testing

 

EUA Application Submitted in Q1 to FDA for COVID-19 Rapid Antigen Test for Both Prescription Home Use and Professional Use in Point of Care Settings

 

Management to Host Analyst/Investor Call and Webcast Today at 5:00 p.m. ET

 

BETHLEHEM, PA, May 5, 2021 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. (NASDAQ: OSUR), a leader in point-of-care diagnostic tests, specimen collection devices, and microbiome laboratory and analytical services, today announced its financial results for the three months ended March 31, 2021.

 

“OraSure had another strong quarter, as the Company delivered double-digit year-over-year revenue growth for the third quarter in a row. Our sample collection devices for COVID-19 molecular testing continue to make a significant contribution to our revenues. Moreover, we have submitted our COVID-19 rapid antigen test to the US Food and Drug Administration for Emergency Use Authorization, and look forward to bringing a prescription home test and a professional test for point of care use to market,” said Stephen Tang, Ph.D., President and CEO of OraSure Technologies.

 

Dr. Tang continued, “As coronavirus variants continue to spread, we believe convenient, safe and accurate COVID-19 testing will continue to play a key role in identifying those who are infected and helping to safely reopen workplaces, schools, and other places where people gather. We are confident in the market potential for our COVID products, as well as the resilience of our other business segments as demonstrated by the strong first quarter performance of our commercial genomics, microbiome, and domestic HIV testing business. Given the overall strong financial performance of our business, the EUA applications pending before the FDA and our solid financial foundation, we are confident that OraSure is well positioned for continued success.”

 

Financial Highlights

 

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COVID-19 Update

 

 

Antigen:

 

 

 

Molecular/PCR:

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Antibody:

 

 

Manufacturing:

 

 

 

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Financial Results for the Three Months Ended March 31, 2021

 

Net revenues for the first quarter of 2021 of $58.6 million increased 85% from the comparable period of 2020, primarily as a result of strong sales of molecular sample collection kits for COVID-19 testing, higher genomics product sales and increased sales by the Company’s domestic HIV testing business, partially offset by declines in revenues of our international HIV products due to order timing and risk assessment products due to the impact of COVID-19 on the overall risk assessment testing market in the US.

Gross profit percentage was 65% for the three months ended March 31, 2021 compared to 51% for the three months ended March 31, 2020.  Gross profit in the current quarter benefited from an improved product mix associated with higher gross profit percentage product sales.

For the three months ended March 31, 2021, operating expenses were $27.9 million, an increase of $3.7 million from the $24.2 million reported for the three months ended March 31, 2020, largely due to increased investment in the development and sale of the Company’s COVID products. Operating expenses were also impacted by a benefit of $806,000 representing the change in the estimated fair value of acquisition-related contingent consideration compared to an expense of $1.1 million recorded the same period of 2020.

The Company generated operating income of $10.4 million in the first quarter of 2021 compared to an operating loss of $8.1 million in the first quarter of 2020.

During the first quarters of 2021 and 2020, the Company recorded income tax expense of $6.5 million and $712,000, respectively.

 

Second Quarter 2021 Guidance

 

The Company expects second quarter 2021 net revenues to range from $55 million to $60 million.

 

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Financial Data (Unaudited)

 

 

 

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Conference Call

 

The Company will host a conference call and audio webcast for analysts and investors to discuss the Company’s first quarter 2021 quarter results and certain business developments, beginning today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). On the call will be Dr. Stephen S. Tang, President and Chief Executive Officer, and Roberto Cuca, Chief Financial Officer. The call will include prepared remarks by management and a question and answer session.

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In order to listen to the conference call, please dial 844-831-3030 (Domestic) or 315-625-6887 (International) and reference Conference ID # 1349536 or go to OraSure Technologies’ web site, www.orasure.com, and click on the Investor Relations page. Please click on the webcast link and follow the prompts for registration and access 10 minutes prior to the call. A replay of the call will be archived on OraSure Technologies’ web site shortly after the call has ended and will be available for 14 days. A replay of the call can also be accessed until midnight, May 19, 2021, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID # 1349536.

 

It is recommended to dial-in at most 15 to 20 minutes prior to the call start to reduce waiting times. If a participant will be listen-only, they are encouraged to listen via the webcast on OraSure’s Investor Relations page.

 

About OraSure Technologies

OraSure Technologies empowers the global community to improve health and wellness by providing access to accurate, essential information. OraSure, together with its wholly-owned subsidiaries, DNA Genotek, Diversigen, and Novosanis, provides its customers with end-to-end solutions that encompass tools, services and diagnostics. The OraSure family of companies is a leader in the development, manufacture, and distribution of rapid diagnostic tests, sample collection and stabilization devices, and molecular services solutions designed to discover and detect critical medical conditions. OraSure’s portfolio of products is sold globally to clinical laboratories, hospitals, physician’s offices, clinics, public health and community-based organizations, research institutions, government agencies, pharma, commercial entities and direct to consumers. For more information on OraSure Technologies, please visit www.orasure.com.

 

Important Information

This press release contains certain forward-looking statements, including with respect to expected revenues, products, product development activities, regulatory submissions and authorizations and other matters. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to: ability to successfully manage and integrate acquisitions of other companies in a manner that complements or leverages our existing business, or otherwise expands or enhances our portfolio of products and our end-to-end service offerings, and the diversion of management’s attention from our ongoing business and regular business responsibilities to effect such integration; the expected economic benefits of acquisitions (and increased returns for our stockholders), including that the anticipated synergies, revenue enhancement strategies and other benefits from the acquisitions may not be fully realized or may take longer to realize than expected and our actual integration costs may exceed our estimates; impact of increased or different risks arising from the acquisition of companies located in foreign countries; ability to market and sell products, whether through our internal, direct sales force or third parties; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the U.S. Food and Drug Administration (“FDA”) or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on our business and our ability to successfully develop new products, validate the expanded use of existing collector products, receive necessary regulatory approvals and authorizations and commercialize such products for COVID-19 testing; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance

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of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales; ability to identify, complete, integrate and realize the full benefits of future acquisitions; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention (“CDC”) or other agencies; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical products and components; availability of related products produced by third parties or products required for use of our products; impact of contracting with the U.S. government; impact of negative economic conditions; ability to maintain sustained profitability; ability to utilize net operating loss carry forwards or other deferred tax assets; volatility of the Company’s stock price; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; ability to sell products internationally, including the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; and general political, business and economic conditions. These and other factors that could affect our results are discussed more fully in our SEC filings, including our registration statements, Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q, and other filings with the SEC. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are made as of the date of this press release and OraSure Technologies undertakes no duty to update these statements.  

 

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Exhibit 99.2

OraSure Technologies, Inc.

First Quarter 2021

Analyst-Investor Conference Call

May 5, 2021

 

Prepared Remarks of Dr. Stephen S. Tang and Roberto Cuca

 

Please see “Important Information” at the conclusion of the following prepared remarks

 

 

 

Operator Remarks

 

Good afternoon everyone and welcome to the OraSure Technologies first quarter 2021 financial results conference call and simultaneous webcast. As a reminder, today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press “star” then the number 1 on your telephone keypad.  If you would like to withdraw your question, press the # key. To allow time for as many questions as possible, questioners are asked to limit themselves to only a single question with no more than one follow-up question related to the same topic. Once the follow-up is completed, a questioner can rejoin the queue for further questions.

 

I would now like to turn the call over to Jeanne Mell, Vice President of Corporate Communications for OraSure. Jeanne?

 

Jeanne Mell, VP Corporate Communications

 

Thank you, Operator. With us today are Dr. Stephen Tang, President and Chief Executive Officer, and Mr. Roberto Cuca, Chief Financial Officer. Dr. Tang and Mr. Cuca will begin with opening statements, which will be followed by the question and answer session.

 

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Before I turn the call over to Dr. Tang, you should know that this call may contain certain forward-looking statements, including statements with respect to revenues, expenses, profitability, earnings or loss per share and other financial performance, product development, performance, shipments and markets, business plans, regulatory filings and approvals, expectations and strategies. Actual results could be significantly different. Factors that could affect results are discussed more fully in the Company’s SEC filings, including its registration statements, its Annual Report on Form 10-K for the year ended December 31, 2020, its quarterly reports on Form 10-Q, and its other SEC filings. Although forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements are based solely on information available to management as of today. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call.

 

With that, I will turn the call over to Dr. Stephen Tang.

 

Introduction – Stephen Tang, President and Chief Executive Officer

 

Thank you, Jeanne, and thank you everyone for joining us today. I hope you and your families are safe and well.

 

I am pleased to report another record quarter for OraSure. Our 85% growth in first quarter net revenues represents the third quarter in a row of year-over-year double-digit revenue growth. Our sample collection devices for COVID-19 molecular testing continue to make a significant contribution to our revenues, and our genomics, microbiome, and domestic HIV diagnostic businesses showed strong performance as well.

 

We achieved a significant milestone in March when we submitted our COVID-19 rapid antigen test to the US Food and Drug Administration (FDA) for Emergency Use Authorization (EUA), and look forward to bringing both a prescription home test and a professional test for point of care use to market. We are confident in the market potential for our COVID-19 products, as well as the resilience of our non-COVID businesses.

 

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Total net revenues of $58.6 million for the first quarter were driven by strong revenue performance of $43.2 million from the Molecular Solutions Business Unit. We recorded $27.4 million in revenue from our sample collection kits for COVID-19 molecular testing and expect our molecular sample collection kits to continue to meaningfully contribute to our business as testing remains a key strategy to combat the pandemic.

 

Top of mind for investors is the outlook for COVID-19 testing given the downward trend in testing numbers. Before providing further detail on our activities, I’d like to offer our perspective on the global COVID-19 testing landscape.

 

Here in the U.S., vaccines are readily available and the number of cases in the U.S. has dropped meaningfully since the start of the year. However, as variants continue to spread, testing will continue to play a crucial part in mitigating the spread of the virus and helping to safely reopen workplaces, schools, and other places where people gather. A recent McKinsey report notes that rapid, accurate testing will play a key role as the transition back to pre-pandemic routines continues.

 

The emergence of new, more contagious variants of the coronavirus underscores the importance of testing to detect infection even as vaccination campaigns continue. Scientists are particularly concerned about the rising prevalence of variants, which they say could prolong the pandemic. When you factor in vaccine hesitancy, it becomes apparent that achieving herd immunity may take longer than hoped for – or even be elusive. Experts estimate that 70-85% of the population must be vaccinated to stop the spread of COVID-19. Yet, a quarter of Americans say they probably or definitely will not get vaccinated. In some states supply is now higher than demand.

 

Outside the U.S., however, the vaccine rollout is slower. Bloomberg projects it will take years to achieve significant global herd immunity, while McKinsey notes that herd immunity may look different across the world, with some areas achieving it, others moving in and out of it, and some failing to achieve it due to vaccine hesitancy.

 

 

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Market research reports forecast a robust testing market with estimates of total global volumes for molecular and antigen tests in the range of two to four billion tests in 2021.

Consequently, we believe the need for convenient, safe and accurate testing will continue alongside vaccination rollouts, and our tests and molecular sample collection kits will be critical to this effort.

OraSure is dedicated to simplifying COVID-19 testing. Our tests and collection kits are all centered on the convenient, pain-free self-collection of samples, making it easier for people to know if they have COVID-19. This simplicity and ease of use can help increase access to testing, alleviate the burden on the healthcare system, minimize exposure risks, and conserve personal protective equipment (PPE).

Our molecular sample collection kits made by our DNA Genotek subsidiary continue to drive performance showing continued sequential quarterly growth.  Demand has been driven by both high-volume repeat orders from existing customers and from new customers engaged in back-to-work and back-to-school testing programs around the world.

As a reminder, our OMNIgene^®•ORAL and ORAcollect^®•RNA collection devices have received EUAs from the FDA allowing for the unsupervised use of these devices at home or in healthcare settings when used as part of an approved or validated at-home test kit. They are also included in eight EUAs received by DNA Genotek’s customers.

ORAcollect^®•RNA saliva collection devices have been used in more than two million COVID-19 tests developed by DNA Genotek customer Quadrant Biosciences in partnership with SUNY Upstate Medical University, up from the one million administered tests SUNY announced in February of 2021. This test has been used extensively by State University of New York campuses since the start of the fall 2020 semester.

 

Turning to our COVID-19 rapid antigen test, we were delighted to announce in March that we had submitted an EUA application to the FDA for our COVID-19 rapid antigen test for both Prescription Home Use and Professional Use at point of care (POC) settings.  The concurrent

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submission for both products represented an acceleration of the Prescription Home Test use product and reflects our continued focus on the home testing market.  

 

This easy and intuitive ‘swab, swirl and see’ test detects active COVID-19 infection with no instrumentation, batteries or smartphone needed to read the results. Users simply swab their lower nostrils, swirl the swab in buffer solution and see the result right on the test stick a short time later. It’s that simple.

 

With just a few steps to follow, we believe our test would be one of the simplest COVID-19 tests on the market. We expect that its simplicity will give users peace of mind that they performed the test correctly and can be confident in the result.

 

Our rapid antigen tests are well suited for use by individuals at home, as well as health care providers, employers, pharmacies and universities. Because they do not rely on batteries, electricity, cell service or WiFi, our tests could be administered wherever testing is needed, such as in underserved communities where vaccinations are low and COVID incidence is high.

 

We have begun manufacturing our antigen test as we await Emergency Use Authorization.

 

We also plan to pursue an over-the-counter indication for our rapid antigen test. Given our experience selling our HIV test over the counter for close to 10 years, we are well suited to capitalize on this opportunity once authorized by the FDA.  

 

Turning to our oral fluid antibody test, we have collected the data requested by the FDA and plan to submit separate EUA applications for the ELISA microplate assay and the OraSure Oral Antibody Collection Device. This lab-based antibody test can aid in identifying individuals with an adaptive immune response to SARS-CoV-2, indicating prior infection.

 

Our test has the potential to be the first oral fluid antibody test to receive FDA Emergency Use Authorization. To date, all of the FDA authorized antibody tests require a venous blood draw or finger stick. Antibody tests can play a role in community surveillance efforts and seroprevalence

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studies. We continue to sell this pioneering product for research use only and it has been validated by numerous laboratories.

 

With this qualitative test, individuals would self-collect an oral fluid sample using the OraSure Oral Antibody Collection Device, under the observation of a healthcare professional. The sample would be placed into a buffer vial for storage and transport, and later dispensed onto the OraSure Sars-CoV-2 ELISA microplate for testing in a laboratory.

 

Each of OraSure’s accurate, easy-to-administer testing and collection methods, in conjunction with vaccination efforts, can play a key role in identifying COVID-19 cases, isolating the infected, controlling outbreaks and helping the world get back to “normal.”

 

We are confident in the sustained market potential for our COVID-19 solutions. As the recent surges around the world have shown, COVID-19 is still having a significant impact worldwide.

 

We are prepared to address this global opportunity. Our molecular collection sample kits are already authorized in Europe and in Canada. We are actively working on the requirements for international regulatory approvals for our rapid antigen test and plan to leverage our existing infrastructure of teams and distributors.  

 

If we capture just a small percentage of the global COVID-19 testing market, it will have a meaningful impact on the company.  

 

With that, I'll turn it over to Roberto for a report on our financials and an update on our COVID-19 manufacturing capacity expansion. Roberto?

 

Financial Results – Roberto Cuca

 

Thank you, Steve.

 

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Our first quarter net revenues increased 85% to $58.6 million from the $31.6 million reported in the first quarter of 2020, primarily as a result of strong sales of molecular sample collection kits for COVID-19 testing, higher genomics product sales, and increased sales of our over the counter OraQuick® In-Home HIV test. This was partially offset by lower sales of our HIV and HCV professional products and risk assessment products. Net product and services revenues were $56.6 million, an 83% increase from the first quarter of 2020.

 

Total product and service revenues for the Company’s molecular business unit were $44.0 million during the first quarter of 2021, an increase of 219% from the first quarter of 2020. This increase included $27.4 million in sales of oral fluid sample collection devices for COVID-19 molecular testing.

 

Domestic sales of the Company’s OraQuick^® HIV tests increased 26% compared to the first quarter of the prior year largely due to higher sales of the over-the-counter OraQuick® In-Home HIV test.  International HIV and HCV revenues declined 42% over the prior year, due to several large distributor orders which occurred in the first quarter of 2020 and variations in timing as compared to 2021 ordering.  Overall, the underlying international growth in HIV and HCV testing is still strong vs. prior year outside of the single-quarter timing impact of these distributor orders.    

 

Gross profit percentage was 65% for the three months ended March 31, 2021 compared to 51% in the same period of 2020 due to an improved product mix of higher gross profit percentage product sales.

 

Net income for the first quarter of 2021 was $3.8 million, or $0.05 per share on a fully-diluted basis, compared to a net loss of $7.3 million, or $0.12 per share on a fully-diluted basis, for the first quarter of 2020. First quarter 2021 results included a benefit of $806,000 for the change in the estimated fair value of our acquisition-related contingent consideration compared to a charge recorded in the first quarter of 2020 of $1.1 million.  2021 results also reflect the additional product development and sales and marketing costs incurred for our COVID-19 tests as well as increased tax expense associated with the improved results of the Company.

 

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Cash and investments totaled $240.5 million at March 31, 2021.

 

As we disclosed in our press release, we expect revenues of $55.0 million to $60.0 million in the second quarter of 2021.  We are not providing full year guidance at this time, but will revisit that option as we get greater clarity on the regulatory status of our COVID-19 antigen and antibody tests.

 

I’ll now turn to our manufacturing capacity expansion efforts for our COVID-19 products, starting with our rapid antigen test. As of the end of the first quarter, all the equipment needed to achieve the previously communicated planned capacity of 55 million units annually is on-site and either installed or in the process of being installed.  More specifically, lines capable of manufacturing 44 million units a year are in place with the remainder to be finished by the end of May.  Plans are on-track to achieve 70 million units annually of installed capacity in the third quarter and 120 million units by the second quarter of 2022 as previously disclosed.  These are annualized numbers of installed capacity and include our existing tests for HIV, HCV and Ebola, and will require some ramp up time for validation and new employee training.

 

For our oral fluid antibody test, we currently have installed capacity of 10 million units per year, including existing products, as we have previously communicated. We remain on track to expand this capacity to 20 million units a year by the end of 2021.

 

Capacity expansion for our molecular sample collection kits exceeds our original projections. We are expanding installed capacity of our molecular sample collection devices to a rate of approximately 80 million units annually in the second quarter of 2021, ahead of the 75 million annual units previously communicated, and further to 105 million units annually by the end of 2021. Of this capacity we expect that 7-8 million units annually will go to non-COVID-19 applications.

 

With that, I will turn the call back over to Steve.

 

Steve Tang

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Thank you, Roberto. I’d now like to provide some brief updates on our non-COVID-19 businesses, which have shown not only resiliency, but in some cases, indications of a return to pre-pandemic levels. In fact, our molecular non-COVID-19 business rebounded beyond first quarter 2020’s pre-COVID levels, signaling that COVID-19 headwinds in the molecular market may be subsiding.

 

Non-COVID molecular product revenue in the first quarter grew 32% over the prior year. Our total genomics business was up 32% for the quarter, with signals of recovery driven by momentum in the Disease Risk Management, Ancestry and Companion Animal markets. Our academic market for genomics is also showing signs of resilience with 9% growth over prior year quarter.

 

Our microbiome collection kits business rebounded in the first quarter with a 32% growth over the same quarter a year ago, driven by demand from our commercial customers. We expect our commercial microbiome business will continue to recover as investment continues in the microbiome industry, driving growth potential for both Diversigen services and DNA Genotek kits.

 

Turning to our Diagnostics Business Unit, overall domestic diagnostics revenue was on par with first quarter 2020, despite COVID-19 headwinds. Sales of our over the counter HIV In-Home test grew by triple digits over the prior year as public health HIV testing programs in the U.S. continue to use our over-the-counter product. For example, the Centers for Disease Control and Prevention (CDC) is distributing our OraQuick In-Home HIV Tests via a partnership with Insignia, Building Healthy Online Communities and Emory University. CDC’s Let’s Stop HIV Together campaign is leading the marketing efforts and sending consumers to a unique website link to order tests. This large-scale and targeted distribution of self-test kits to populations disproportionately impacted by HIV/AIDS will assist CDC in future efforts related to in-home testing strategies and contribute to the Ending the HIV Epidemic (EHE) initiative.

 

International diagnostics revenue was down from the year prior largely due to unusually large orders from initial program stocking in first quarter 2020 and variable timing associated with re-stocking. The underlying growth in Q1, outside of these stocking orders, is still strong and we expect international diagnostics revenue in the first half of 2021 to show strong growth vs. 2020.  

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Finally, before we move to the Q&A session, I’d like to share with you a few summarizing thoughts.

 

Our business is strong and we expect our momentum to continue in a balanced manner. As you’ve seen, our non-COVID revenue is beginning to return to pre-pandemic levels and our COVID-19 related revenue remains robust. We believe the collective contributions from our rapid antigen test and oral fluid antibody test will be substantial subject to receipt of EUAs for these products, and we’re confident we’ll continue to make significant commercial strides with our molecular sample collection kits. Lastly, we will leverage our strong balance sheet, with more than $3 per share in cash, to maximize the COVID-19 tailwinds, fund R&D in our non-COVID businesses, and fuel our business development activities.  For these reasons, we think we are in an excellent position to capitalize on multiple fronts and drive further growth in the coming quarters.  

 

With that, operator, please open the call up for questions.

 

[Q&A SESSION]

 

 

Final Conclusion – Steve Tang

 

Thank you for participating in today’s call and for your continued interest in OraSure. Have a good afternoon and evening. Stay safe and be well.

 

Important Information

 

This document contains certain forward-looking statements, including with respect to expected revenues and earnings/loss per share. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to: ability to successfully manage and integrate acquisitions of other companies in a manner that complements or leverages our existing business, or otherwise expands or enhances our

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portfolio of products and our end-to-end service offerings, and the diversion of management’s attention from our ongoing business and regular business responsibilities to effect such integration; the expected economic benefits of acquisitions (and increased returns for our stockholders), including that the anticipated synergies, revenue enhancement strategies and other benefits from the acquisitions may not be fully realized or may take longer to realize than expected and our actual integration costs may exceed our estimates; impact of increased or different risks arising from the acquisition of companies located in foreign countries; ability to market and sell products, whether through our internal, direct sales force or third parties; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the U.S. Food and Drug Administration (“FDA”) or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on our business and our ability to successfully develop new products, validate the expanded use of existing collection products and commercialize such products for COVID-19 testing; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales; ability to identify, complete, integrate and realize the full benefits of future acquisitions; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by

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the Centers for Disease Control and Prevention (“CDC”) or other agencies; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical products and components; availability of related products produced by third parties or products required for use of our products; impact of contracting with the U.S. government; impact of negative economic conditions; ability to maintain sustained profitability; ability to utilize net operating loss carry forwards or other deferred tax assets; volatility of the Company’s stock price; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; ability to sell products internationally, including the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; and general political, business and economic conditions. These and other factors that could affect our results are discussed more fully in our Securities and Exchange Commission (“SEC”) filings, including our registration statements, Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q, and other filings with the SEC. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements.  The forward-looking statements are made as of the date of this call and we undertake no duty to update these statements.

 

 

 

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OraSure Technologies Investor presentation MAy 2021 Exhibit 99.3

Forward-Looking Statements Disclaimer This presentation contains certain forward-looking statements, including with respect to expected revenues and earnings/loss per share. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to: ability to successfully manage and integrate acquisitions of other companies in a manner that complements or leverages our existing business, or otherwise expands or enhances our portfolio of products and our end-to-end service offerings, and the diversion of management’s attention from our ongoing business and regular business responsibilities to effect such integration; the expected economic benefits of acquisitions (and increased returns for our stockholders), including that the anticipated synergies, revenue enhancement strategies and other benefits from the acquisitions may not be fully realized or may take longer to realize than expected and our actual integration costs may exceed our estimates; impact of increased or different risks arising from the acquisition of companies located in foreign countries; ability to market and sell products, whether through our internal, direct sales force or third parties; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the U.S. Food and Drug Administration (“FDA”) or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on our business and our ability to successfully develop new products, validate the expanded use of existing collector products and commercialize such products for COVID-19 testing; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales; ability to identify, complete, integrate and realize the full benefits of future acquisitions; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention (“CDC”) or other agencies; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical products and components; availability of related products produced by third parties or products required for use of our products; impact of contracting with the U.S. government; impact of negative economic conditions; ability to maintain sustained profitability; ability to utilize net operating loss carry forwards or other deferred tax assets; volatility of the Company’s stock price; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; ability to sell products internationally, including the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; and general political, business and economic conditions. These and other factors that could affect the Company’s results are discussed more fully in the Company’s Securities and Exchange Commission (“SEC”) filings, including our registration statements, Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q, and other filings with the SEC. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. The forward-looking statements are made as of the date of this presentation and OraSure Technologies undertakes no duty to update these statements.

Company Snapshot 1Cash and cash equivalents, short-term investments, and long-term investments as of March 31, 2020 2 Infectious Disease and Risk Assessment Testing Sampling tools, services and diagnostics to understand what’s in us, on us, and around us. 570 employees $240 million in cash1 on balance sheet; no debt Offices in U.S., Canada and Belgium Products registered in 89 countries $172 million in net revenue in 2020 Active business development program 2020 Revenue by segment Services 6% Diagnostics2 38%

Investment Rationale Multiple Near-term COVID-19 Opportunities and Long-term Growth Drivers Well positioned to simplify global COVID-19 testing: Two self-collection devices for molecular testing received EUAs + CE-IVD marks and are in wide use EUA application submitted for COVID-19 rapid antigen test for Prescription home use and Professional use in point-of-care settings with plans to pursue OTC indication Data collected for lab-based oral fluid antibody test studies for EUA resubmission Investment in manufacturing capacity and improved production efficiency continues Continued expansion in global markets with OraQuick HIV Self-Test and OraQuick HCV test Market leading microbiome products and services offer tremendous growth potential $240 million in cash1 on balance sheet and no debt supports ongoing business development activities that have generated four acquisitions and one divesture since January ‘19 1 Cash and cash equivalents, short-term investments, and long-term investments as of March 31, 2020

Improving Global Access to Accurate Healthcare Information Experts in sample collection, preservation and diagnostics Over 20 years of proprietary knowledge in oral fluid testing enables self collection and rapid in-home results Broad, well-established channels of distribution across global public health, academic and research institutions, laboratories, employers, hospitals, physician offices, pharmacies and direct-to-consumer Leadership in infectious disease, genomics and emerging microbiome fields Innovative technologies to collect and analyze molecular samples

Capitalizing on Next-generation Health and Wellness Technologies Innovative sampling tools, services and diagnostics help people understand what’s in us, on us, and around us Unlocking access to accurate essential information that advances global health and well-being Driving access to multiple layers of information and data to understand health, wellness and disease states Differentiated products with competitive profiles in large attractive markets - many in their early days

OraSure Solutions Study design Customization Single-order fulfillment Wet lab & sequencing Analysis Consulting Infectious disease Substance abuse testing Sampling Sample collection & stabilization devices to drive discovery and access Services Data analytics and AI, multiomic view to health & wellness Diagnostics Selection of high value/ actionable testing for healthcare professionals and consumers

Innovation and Expertise in Infectious Disease Diagnostics Our technologies are the ideal platform for the emerging trends in diagnostic testing Directly suited for the current COVID-19 testing dynamic Leveraging our proven experience with HIV Self-Test and Rapid Ebola Antigen Test to develop a Coronavirus Antigen Rapid Self-test Our unique platform for HIV and HCV provides accurate and easy-to-administer testing methods Bringing our innovation and expertise in infectious disease diagnostics and sample collection to the fight against COVID-19 and the global eradication of HIV

Three Distinct COVID-19 Opportunities Sample Collection Devices for COVID-19 Molecular Testing COVID-19 Rapid Antigen home test COVID-19 Oral Fluid Antibody ELISA Convenient, pain-free self-collection Increased access to testing Less burden on healthcare systems Minimized exposure risks to healthcare workers Conserve much-needed PPE

All-in-one, easy, reliable and non-invasive self-collection of high quality DNA and RNA Ambient temperature stability Compatible with high throughput processing ORAcollect®·RNA and OMNIgene®·ORAL have received EUAs, interim authorization from Health Canada, and are CE-IVD marked Eight customers to date* have received EUAs incorporating our sample collection products OMNIgene·ORAL named one of TIME magazine’s best inventions of 2020 All-in-one Solutions for Self-collection of Samples for Molecular COVID-19 Testing OM-505** OR-100** OGD-500 VALIDATING WITH PARTNERS VALIDATING WITH PARTNERS *As of 5/4/21 **OR-100/OM-505 are the formats for the US market. Outside of the US, we use the ORE-100/OME-505 formats.

EUA submitted in Q1 2021 for Prescription home test and Professional POC test Simple, easy-to-use test to detect active COVID-19 infection anytime, anywhere with direct results available a short time later on the test stick No instrumentation or laboratory analysis needed to interpret results Based on proven OraQuick® platform (HIV, HCV, Ebola) with over 80 million tests sold Expanding manufacturing capacity to meet anticipated demand, ahead of EUA COVID-19 Rapid Antigen Home Test Simple “swab, swirl, see” process using samples collected from lower nostrils Ideal for In-home testing to prevent the spread of COVID-19 Swab is fully integrated into the test stick eliminating dependence on scarce NP swabs Enables testing scale Image shows OraQuick lateral flow platform

OraSure’s COVID-19 Rapid Antigen Home Test: Three Products Covering Various Use-Cases 2 Professional Test Rx Self-test Over-the-counter Test Rx Self-Swab Healthcare practitioner reads result Rx Self-Swab Consumer reads result OTC Self-Swab Consumer reads result Consumer Home Use via Pharmacy Rx Education Consumer Home Testing Employers for Home or Off-site Testing Travel / Entertainment Physician offices, Employer/University Health Centers, Pharmacy clinics Nursing Homes Drive-Thru Sites

No oral fluid COVID-19 antibody tests have received Emergency Use Authorization to date* Easy and non-invasive self-collection ELISA Microplate lab-based oral fluid test Short turn-around time and high-throughput Ideal for surveillance data BARDA contract to develop Data requested by FDA collected; plan to resubmit as two separate EUAs, per FDA request Product currently sold as Research Use Only (RUO) and in use by customers Sars-Cov-2 Oral Fluid Antibody Test Collect Sample with OraSure Device Insert the device into the buffer Sample sent to lab where ELISA test is run *As of 5/3/21 ..

Further expansion will allow 120 million total tests per year Expansion of Installed Manufacturing Capacity to Meet Anticipated Demand for COVID-19 Opportunities Current capacity for 44 million OraQuick tests per year including HIV, HCV and Ebola tests+ Installation of new lines will expand total capacity for all tests to 55 million tests per year in Q2 Further expansion will allow 70 million total tests per year Today Q2 2021 Q3 2021 OraQuick Coronavirus Rapid Antigen Home Test +Approximately half of this capacity is devoted to HIV, HCV, and Ebola testing *Approximately 7 to 8 million units expected to be used for non-COVID applications ++ Approximately 3 million for existing products Current capacity for 35 million units per year including non-COVID kits* Installation of new lines will increase total capacity for all kits to 80 million units per year Today Q2 2021 COVID-19 Molecular Sample Collection Further expansion will allow 105 million total kits per year including non-COVID kits Q3 2021 Sars-Cov-2 Oral Antibody Collection Device Current capacity for 10 million units per year including existing products++ Installation of new lines will expand total capacity to 20 million tests per year including existing products Today Q4 2021 Today Today Q2 2021 Q4 2021 Q4 2021 Q2 2022

Trailblazer in HIV Self-Testing First and only rapid HIV OTC test approved by FDA First and only WHO-prequalified rapid oral HIV self-test Source: WHO/UNITAID/UNAIDS Opportunities in Africa with UNITAID STAR program expansion, Europe, Eastern Europe, Central Asia and Latin America OraSure is International HIV Self-Test market share leader with oral fluid self-collection and in-home result

Well-Positioned to Play an Important Role in the Eradication of HIV in the U.S. ENDING THE HIV EPIDEMIC: THE PLAN FOR AMERICA FY 2021 federal budget includes $386 million for EHE implementation, up from $267 million in FY 2020. Reaching the difficult to reach is key to achieving plan goals Rapid testing is an important tool OraSure has the only FDA-approved OTC self-test for HIV in the U.S. UrSure acquisition adds PrEP adherence testing to portfolio COVID-19 IMPACT CDC is encouraging funded sites to use in-home self-testing for HIV in order to continue testing while complying with COVID-19 safety restrictions. Public health departments are increasing purchases of our FDA approved in-home HIV test

Hepatitis C Source: WHO & CDC * VWB and FSWB only OraSure makes the first and only FDA-approved, CLIA-waived rapid HCV test* 81% of the estimated 71 million people with chronic Hepatitis C do not know their status Antiviral medications can now cure 95%+ of those infected but access to diagnosis and treatment is low Opioid crisis is fueling the Hepatitis C epidemic $39.5 million for the Division of Viral Hepatitis at CDC, an increase of $500,000 over FY 2020 $13 million for Infectious Diseases and the Opioid Epidemic at CDC, an increase of $3 million over FY 2020 OraSure’s HCV POC test will play an important role in reaching the hard-to-reach people who are driving a majority of the infections Anticipate an eventual return to more normal levels of revenue after COVID-19 begins to resolve

Opportunities in Substance Abuse Testing New federal guidelines permit oral fluid drug testing SAMHSA estimates oral fluid testing will grow to 25% of total testing by 2025 OraSure pioneered oral fluid testing for substance abuse Socially distanced, easier, less costly and more efficient sample collection Product shown is under development to meet SAMHSA guidelines. Currently for Forensic Use Only.

DNA Genotek: The Magic Behind Human Genomics DNA Genotek “has done for DNA collection what Google did for Web searches: made it ridiculously simple and efficient.” – TIME Magazine Illustration depicts Oragene self-collection kit

Microbiome Impact on Healthcare

Services: Unmatched Offering From Sample to Answer Blue-chip customer base and technical innovation in microbiome analysis and DNA Genotek’s microbiome sampling kits Integrated lab operations in Minnesota Consolidated CoreBiome and Diversigen services under Diversigen brand Diversigen represents experts with 100+ years of microbiome experience and 300+ scientific publications with ~100,000 citations Combined operation offers science-driven, customized solutions for metagenomics sequencing, bioinformatics, and statistical analysis for the study of the microbiome

Multiomics: New Health Paradigm End-to-end quality in sampling, services, and bioinformatics

Business Development 1 Cash and cash equivalents, short-term investments, and long-term investments as of March 31, 2020 Using robust balance sheet to create revenue and shareholder value Considering diagnostic possibilities as well as molecular $240 million in cash on balance sheet1 with no debt Four completed acquisitions 2019-2020 Continue to seek acquisitions that are accretive to our innovation-based growth strategy

Summary Business momentum is strong Significant COVID-19 opportunity is robust part of our business for now and the foreseeable future Molecular collection devices driving significant revenue COVID-19 Antigen and Antibody tests on the road to commercialization Non-COVID business is showing resiliency OraSure is poised for continued and sustained growth Our work with COVID-19 will help accelerate our growth significantly We expect to emerge from the pandemic a stronger and larger company