The fourth quarter was an exclamation point on Quidel Corporation’s (NASDAQ: QDEL) 2020 year ending Dec. 31 as the company reported a total revenue of $1.6 billion. The San Diego-based biotech saw Q4 revenue grow 432% to $809.2 million, from $152.2 million in the fourth quarter of 2019, according to the company’s Form 8-K filing.
A sizable $678.7 million of the public company’s Q4 revenue was from its array of COVID-19 products, such as the newly launched Sofia SARS Antigen and Lyra SARS-CoV-2 tests. According to Quidel’s Form 10-K, its COVID-19 products accounted for 70% of total revenue for the year ended on Dec. 31, 2020.
“Quidel was built for this sort of response, but we still had to execute – and execute we did,” said President and CEO, Douglas Bryant during Quidel’s Q4 earnings call on Feb. 18. “And now it’s 2021, and we still have lots of work to do.”
Since 1979, Quidel Corp. has been known as a provider of rapid diagnostic testing solutions, cellular-based virology assays and molecular diagnostic systems. In 2020, Quidel was one of the first companies to receive Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA) for its rapid tests which put the company in a favorable position in the market.
Demand for Rapid Antigen Tests
Over the past few months of the pandemic, these Rapid Immunoassay and Molecular Diagnostic Solutions products have driven demand and profits for Quidel. The fourth quarter was the culmination of high-volume sales of its Sofia SARS Antigen test while continuing to supply tests for an anticipated rise in influenza and the novel-coronavirus during colder months.
“There was a testing spike tied to increased COVID prevalence that peaked in November,” Bryant said. “Orders for our Sofia SARS product were placed, and distributors reacted by stocking up. After the spike, testing in the professional segments resumed to where they were previously, concomitant to the reduction in COVID prevalence, to a level of demand that we were previously struggling to fulfill.”
Next in line, is the company’s highly anticipated rollout of an Over-The-Counter (OTC) testing option, the QuickVue AT-Home COVID-19 Test, a technology that consumers can read themselves and know within 60 seconds whether they have a coronavirus infection. While the test was initially expected to receive an EUA approval earlier this year, the FDA required the company to submit more data, which Bryant said is part of the process.
“We are in the middle of conducting additional studies and gathering data to support that OTC submission, but especially studies in the asymptomatic population — and in that population, to be transparent, we need to find more positives,” Bryant said of the studies and data being collected.
Bryant told investors he does not expect this delay will impact Q1 revenue. If anything, he explained it is a matter of timing as they have already seen a demand for the at-home testing option.
New Markets and Manufacturing
Bryant said the company’s core market has been professional settings such as healthcare while they are actively exploring new markets, they don’t plan on expanding just yet as they want to meet their current commitments. The new markets he mentioned include, travel, entertainment, dining and other uses that could include its OTC option.
“Clearly the demand exceeds what we’re manufacturing now,” Bryant said. “And so it’s not a demand issue on our end, it’s about timing and allocation, which obviously over a few quarters will sort itself out. But matching up timing and demand at all will be the key to moving all the product.”
In order to meet the projected demand for the at-home tests, Quidel plans to ramp up its manufacturing capacity. The company currently has three primary manufacturing sites and recently announced that it will open a new facility in Carlsbad, which is expected to begin operations in the second half of 2021.
At the end of 2020, Quidel reported 1,370 employees worldwide and it plans to add roughly 400 jobs at the new North County facility. The company is actively hiring engineers, technicians, manufacturing, chemists, purchasing, sourcing, site managers and support services personnel to staff the facility.
With this boost in manufacturing power, Quidel also aims to scale production of its QuickVue rapid antigen test from 50 million tests per year to 50 million tests per month.