Date: Feb 18, 2017 Author: Scott Kraus Source: Morning Call (
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OraSure Technologies recorded a second consecutive year in the black in 2016, reporting record revenues and earnings fueled by growth in international sales of its HIV and hepatitis C diagnostic tests and by swelling interest in DNA testing.
The Bethlehem diagnostic testing and specimen collection company reported profits of $19.7 million in 2016, more than twice its 2015 profits of $8.2 million. That translated to earnings of $0.35 per share, beating analysts' estimates, and up from $0.14 per share last year.
OraSure reported net revenue of $128.2 million in 2016, up from $119.8 million in 2015.
"A major contributor to growth during both the quarter and full-year period was our international business," said President and CEO Douglas A. Michels. "Expanding international sales of our HIV self-test and HCV product is a critical component of OraSure's global growth strategy."
The company's DNA Genotek division also played a significant role in the profitable 2016. Revenues from the molecular collection devices it produces to collect human DNA were up 8 percent for the year to $32.3 million. Michels said he sees molecular collection as a key part of the company's strategy.
"There a number of factors driving that growth," Michels said. "One is the increased interest in genomics on a research and a personal level. People want to understand what their genetic makeup looks like and what it implies. I think we've got very innovative technology that delivers high quality and large quantity of human DNA from saliva samples and that enables clinical research as well as commercial applications in the genomics space."
In its global infectious disease business, OraSure announced a major deal in November, an $18 million contract to supply its OraQuick rapid hepatitis C and HIV tests to a unidentified nation undertaking a countrywide disease eradication campaign.
OraSure shipped its first batch of those tests in the fourth quarter of 2016, bringing in $1.9 million in revenue. Michels said the company expects to sign similar international eradication campaign contracts in the future.
"Our products have been used around the world and they have been used because they are easy to use and are easily deployed into developing countries," he said. "They are highly accurate, they are noninvasive and can be used with oral specimens as well as blood specimens."
While domestic sales of its HIV and hepatitis tests were relatively flat, international sales were up significantly in 2016. Net international HIV revenues were $5.2 million for the year ended in 2016, up 118 percent from 2015. International hepatitis C testing sales for the year hit $6.6 million, up 71 percent from 2015.
The company is also making progress on a rapid test for the Zika virus, Michels said.
The company incurred some costs related to a fourth quarter corporate restructuring program, but did not disclose how many jobs were eliminated. For the year, OraSure cut operating expenses to $67.8 million, down from the $72.2 million in 2015.
It's now sitting on a growing pile of cash, reporting $120.9 million in cash and short-term investments at the close of 2016, up $19.6 million from the close of 2015.
OraSure expects consolidated net revenues to range from $31 million to $31.5 million in the first quarter of 2017, and and is projecting consolidated net income of $0.17 to $0.18 per share. OraSure stock closed Wednesday at $8.85 per share, before earnings were announced.
