Fortify, Attack,
Forge Ahead
Doug Bryant, President & CEO
Randy Steward, CFO
Corporate Deck March17 v13A
Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of the federal securities laws that involve material risks, assumptions
and uncertainties. Many possible events or factors could affect our future financial results and performance, such that our actual results and
performance may differ materially from those that may be described or implied in the forward-looking statements. As such no forward-looking
statement can be guaranteed. Differences in actual results and performance may arise as a result of a number of factors including, without
limitation, fluctuations in our operating results resulting from seasonality, the timing of the onset, length and severity of cold and flu seasons,
government and media attention focused on influenza and the related potential impact on humans from novel influenza viruses, adverse changes
in competitive conditions in domestic and international markets, the reimbursement system currently in place and future changes to that system,
changes in economic conditions in our domestic and international markets, changes in sales levels as it relates to the absorption of our fixed
costs, lower than anticipated market penetration of our products, the quantity of our product in our distributors’ inventory or distribution channels,
changes in the buying patterns of our distributors and changes in the health care market and consolidation of our customer base; our
development and protection of intellectual property; our development of new technologies, products and markets; our reliance on a limited
number of key distributors; our reliance on sales of our influenza diagnostics tests; our ability to manage our growth strategy, including our ability
to integrate companies or technologies we have acquired or may acquire; intellectual property risks, including but not limited to, infringement
litigation; our debt service requirements; our inability to settle conversions of our convertible senior notes in cash; the effect on our operating
results from the trigger of the conditional conversion feature of our convertible senior notes; limitations and covenants in our senior credit facility;
that we may incur significant additional indebtedness; our need for additional funds to finance our operating needs; volatility and disruption in the
global capital and credit markets; acceptance of our products among physicians and other healthcare providers; competition with other providers
of diagnostic products; adverse actions or delays in product reviews by the U.S. Food and Drug Administration (the “FDA”); changes in
government policies; compliance with other government regulations, such as safe working conditions, manufacturing practices, environmental
protection, fire hazard and disposal of hazardous substances; third-party reimbursement policies; our ability to meet demand for our products;
interruptions in our supply of raw materials; product defects; business risks not covered by insurance and exposure to other litigation claims;
interruption to our computer systems; competition for and loss of management and key personnel; international risks, including but not limited to,
compliance with product registration requirements, exposure to currency exchange fluctuations and foreign currency exchange risk sharing
arrangements, longer payment cycles, lower selling prices and greater difficulty in collecting accounts receivable, reduced protection of
intellectual property rights, political and economic instability, taxes, and diversion of lower priced international products into US markets; our
significant debt service requirements; the possibility that we may incur additional indebtedness; volatility in our stock price; dilution resulting from
future sales of our equity; and provisions in our charter documents, Delaware law and the indenture governing our convertible senior notes that
might delay or impede stockholder actions with respect to business combinations or the election of directors. Forward-looking statements
typically are identified by the use of terms such as “may,” “will,” “should,” “might,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “goal,”
“project,” “strategy,” “future,” and similar words, although some forward-looking statements are expressed differently. Forward-looking statements
in this presentation include, among others, statements concerning: our outlook for this fiscal year and beyond, including, among others,
projections about our revenue, gross margins, cash flow, EBITDA, COGS, market opportunities, geographic expansion, and development,
manufacturing and commercial activities; our strategy, goals and objectives , including, among others, continuing to make substantial investments
in research and development and sales and marketing; our expectations regarding the Savanna® program, including relating to instrument and
cartridge development, costs, features, functions, performance, and commercialization opportunities; our expectations regarding regulatory
submissions, approvals and CLIA waivers; and our intention to continue to evaluate technology and outside acquisition opportunities. The risks
described in reports and registration statements that we file with the Securities and Exchange Commission (the “SEC”) from time to time should
be carefully considered. You are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s
analysis only as of the date of this presentation. We undertake no obligation to publicly release the results of any revision or update of these
forward-looking statements, except as required by law.
2
Quidel is…
Traditional and Next-generation Immunoassays
A market leader in
the development
of innovative
medical
diagnostic
platforms…
Cellular-Based Virology assays
Versatile Molecular Diagnostic platforms
…that is focused on delivering highly accurate,
connected new products with a low total cost of ownership
to the professional POC segment and emerging alternate
site segment.
3
Quidel – Building on a History of Innovation
2009 Present
• Submitted over 30 510(k) packages to the FDA
• Over 25 FDA clearances and expanded
product claims, 4 CLIA waiver designations
• Launched Sofia 2
• Launched Solana instrumented MDx platform
• Launched Sofia and 4 FDA-cleared assays
• Launched 2 first generation molecular systems
(AmpliVue & Lyra)
• Launched Virena wireless system
• Acquired DHI ($45 million annual direct
business)
• Acquired BioHelix
(proprietary HDA amplification technology)
• Acquired Immutopics bone health business
Revenue ($, in millions)
$250
$200
$196.1
$177.3
$150
$100
1989 - 2009
1979 - 1989
4
• Launched QuickVue Influenza A/B rapid
diagnostic assay
• First company to receive CLIA waiver for Flu,
Strep and H. pylori tests
• Company founded
• Primarily a provider of Strep A and Pregnancy
rapid diagnostics
$160.5
$157.7
2011A
2012A
$191.6
$184.2
$113.3
$50
$0
2010A
2013A
2014A
2015A
2016A
Traditional Healthcare is Changing, and…
Total National Health Expenditures (1980-2012)1
Current Healthcare Trends Include:
•
Increased access points for healthcare
•
Investment in healthcare technology
•
Informed patient  consumerism
•
Expanded clinical roles for nurse
practitioners, nurses, physician assistants,
pharmacists to meet increasing demand
for healthcare
“By the end of 2014, more than half of states
were weighing expanding the clinical duties
of nurses, physician assistants, pharmacists
and others.”
- pwc, Top health industry issues of 20152
“Patient screenings and advanced, gene-based diagnostics
may soon become a standard and universally accepted part
of retail pharmacy's service platform. The shrinking pool of
overburdened family doctors is shifting more primary care
services to pharmacists, just as…rapid advances in
diagnostic technology put cheap, easy-to-use screening tools
into the hands of pharmacists.”
- Jim Frederick, Drug Store News3
5
1.
2.
3.
Avalere TrendWatch Chart Book 2014: Trends Affecting Hospitals and Health Systems
http://www.pwc.com/en_US/us/health-industries/top-health-industry-issues/assets/pwc-hri-top-healthcare-issues-2015.pdf
http://www.drugstorenews.com/article/rx-trends-2015-pharmacy-based-diagnostic-screenings via Pharmacy.com
…Quidel is Developing New Products that can Compete
in the Evolving Healthcare Environment
Diagnostic products will need to be connected
as compliance, access to testing data and
the handling of those data will increase in
importance.
Assays will need to be faster and easier to use
as testing moves into urgent care centers and
alternate sites that are closer to the patient.
6
Along with accuracy, total cost of ownership
will also become a factor in a customer’s
decision to adopt new testing platforms.
Quidel’s Management Team has a Long History of Achievement
in Diagnostics, as Well as Broad Range of Skills in the Sector
Douglas C. Bryant, President and Chief Executive Officer
Served as Executive Vice President and Chief Operating Officer, Luminex Corporation, Vice President of
Abbott Vascular for Asia/Japan, Vice President of Abbott Molecular Global Commercial Operations and
Vice President of Abbott Diagnostics Global Commercial Operations.
Randall J. Steward, Chief Financial Officer
Served as Chief Financial Officer for Navilyst Medical, Inc., Chief Operating Officer for SeQual
Technologies, Inc., Executive Vice President and CFO for Spectrum Brands. Mr. Steward holds a B.B.A.
in Accounting from Southern Methodist University. Mr. Steward is also a Certified Public Accountant and
a member of AICPA.
Michael D. Abney, Jr., Senior Vice President, Distribution
Has served as member for the HIDA Foundation Board of Directors since 2012. Served as Vice President,
Channel and Distribution for ConvaTec; previously Vice President, Supplier Management,
PSS Inc. and McKesson Medical Surgical, and Vice President of Operations at PSS. Mr. Abney received
his BA in Finance from the University of Florida in 1989.
7
Quidel’s Management Team has a Long History of Achievement
in Diagnostics, as Well as Broad Range of Skills in the Sector
Robert J. Bujarski, J.D., Senior Vice President, Business Development and General Counsel
Served as General Counsel and Vice President since 2005, previously was an associate attorney with Gibson,
Dunn & Crutcher LLP. Mr. Bujarski received his B.A. degree in 1991 from the University of Arizona and his law
degree in 2001 from the University of Arizona.
Werner Kroll, Ph.D., Senior Vice President, Research and Development
Previously served as Vice President and Global Head of Research and Innovation for Novartis Molecular
Diagnostics/Co-diagnostics. Has also held senior positions at Novartis, Bayer Diagnostics and Bayer
Pharmaceuticals, and AGFA. Dr. Kroll received his doctorate in Physiological Chemistry from the
University of Marburg.
Scot M. McLeod, Senior Vice President, Operations
Served as Vice President, Operations for the Company since 2001, with responsibility for the performance of the
San Diego manufacturing facility. Mr. McLeod previously worked at Medtronic Inc. and Hybritech in engineering
and project leadership roles. Mr. McLeod has a Bachelor of Science degree in Chemical Engineering from the
University of New Hampshire.
Ed Russell, Senior Vice President, Global Commercial Operations
Led North American Commercial team at Thermo/Life Technologies, a $1B operation. Prior to that, Mr. Russell held
responsibility for Life’s Global Services & Support business, served as President & GM of Japanese operations, and
led the Sales Operations function. Mr. Russell is a graduate of the U.S. Coast Guard Academy and also holds an
MBA from the Wharton School of Business, University of Pennsylvania.
8
Our Innovative New Products are Designed
to Meet the Various Needs of the Customer in Any POC Setting
Immunoassay
FDA-Cleared, CLIA - Waived
Sofia Immunoassay platform is the next generation,
objectively-read system in support of our legacy lateral
flow business, designed to deliver more value and a
higher gross margin.
Sofia captures market share with the first wave of
assays (for Respiratory Disease) in physician offices,
hospitals and alternate sites.
9
FDA-Cleared
Sofia 2, at a fraction of the cost of the original Sofia,
can further penetrate the lower volume and highervolume segments of the POC testing market.
Sofia 2’s integrated wireless options
will expand connectivity and possibly increase overall
diagnostic testing.
Our Innovative New Products are Designed
to Meet the Various Needs of the Customer in Any POC Setting
Molecular
10
FDA - Cleared,
Mod - Complex
FDA - Cleared,
Mod - Complex
FDA - Cleared,
Highly - Complex
AmpliVue, a noninstrumented, hand-held
disposable molecular device
requires no thermocycler or
upfront costs. Moderately
complex claim provides an
easy-to-use entry point into
molecular testing for smaller
hospitals and lower-volume
users wishing to convert from
legacy testing methods.
Solana, our first instrumented
molecular system, extends
AmpliVue’s proprietary HDA
technology to offer a low-cost,
medium volume molecular
solution that can multiplex,
running up to 12 samples at a
time in approx. 30 minutes.
Lyra, our Real-time molecular
PCR assays, are designed to
run on a hospital lab’s existing
thermocycler, and provides a
real-time testing solution to
higher throughput labs using a
hospital’s established systems
– with no upfront costs.
Solana is designed for
samples that do not require
extraction or quantitation in
mod-complex.
Lyra molecular assays can be
paired with other Lyra assays
to create customized multiplex
Respiratory Disease panels.
In Development
Savanna is our low-cost, fully
integrated “sample-to-answer”
molecular diagnostic system.
Target cartridge cost is less
than $5 and target instrument
cost is $10,000, designed for
low-volume and potentially
CLIA-waived settings.
Savanna can run either
traditional PCR using Phase
Gate extraction or HDA
assays for samples that do not
require extraction.
Our Regulatory Talent and Expertise
Since 2011, Quidel has submitted over 30 510(k) packages resulting in over 25 FDA
clearances and expanded product claims, 4 CLIA - waiver designations and
numerous product introductions, contributing $60M in annual revenues*
Quidel Recent Product Introductions: FDA-cleared Products since 2011
Sofia®
Instrumented
Immunoassay
Sofia 2®
Instrumented
Immunoassay
CLIA Waived
Sofia
Analyzer
510(k)
cleared
Sofia 2
Analyzer
Mod Complex
C. difficile
Mod Complex
Solana
Instrument
Highly Complex
Influenza A + B
CLIA Waived
Influenza
A+B
510(k)
cleared
RSV
Mod Complex
Group A Strep
Mod Complex
Influenza A + B
Highly Complex
RSV + hMPV
CLIA Waived
Group A
Strep
Mod Complex
Group B Strep
Mod Complex
Group A Strep
Highly Complex
Adenovirus
CLIA Waived
RSV
Mod Complex
Pertussis
Mod Complex
Strep Complete
(A + C/G)
Highly Complex
Parainfluenza
123
Mod Complex
hCG
Mod Complex
Trichomonas
Mod Complex
Trichomonas
Highly Complex
Strep A + C/G
Legionella
Mod Complex
HSV 1 + 2
Mod Complex
HSV 1+2/VZV
Highly Complex
C. difficile
Highly Complex
HSV 1+ 2/VZV
(CE Mark only)
AmpliVue® HDA
Isothermal
Molecular
Solana® HDA
Isothermal
Molecular
S. Pneumo
(CE Mark only)
11
* FY 2016 revenues for Sofia and Molecular products. Not all FDA submissions and clearances since 2011 are shown.
Lyra® RealTime PCR
Molecular
Fortify,
Attack,
Forge Ahead
12
Our Strategic Intent
Build a broader-based diagnostic company that delivers revenue and margin
more consistently. Use existing resources to fortify price and volume in our core
businesses, while using our capabilities to attack the limitations of our
competitors, and to forge ahead to create new markets.
13
Different Testing Locations Have Different Workflow Requirements and
Needs, which Inform the PDR for Each Platform, Regardless Of
Technology
Locations
Physician Offices
Retail Clinics
EDs (non-lab)
Urgent Care Sites
Physician Office Labs
Hospital Labs
Reference Labs
14
*In development.
Workflow
Needs
Products
Patient - Driven
5-10 minutes
Performance
Ease of Use
Connectivity
Sofia
Sofia 2
Virena
< 1 Hour
Performance
Ease of Use
Cost
Solana
Quantitation
Multiplex
Sample to - Result
Savanna*
Sample - Driven
Our Platform Strategy is Based on 3 Concepts:
Fortify our Core Business,
Gain Market Share
Attack Competitors’
Limitations
• Sofia, Sofia 2 Influenza,
RSV and GAS
• Lyra, AmpliVue
Forge Ahead to Create
New Products and
Markets
• Solana, Savanna platforms
• Sofia Vitamin D, Lyme
• Virena data
management system
• Next-gen Immunoassays
• Sofia 2 and POC
molecular in alternate sites
15
Sofia® and
Sofia 2®
Sofia Fortifies Our Legacy QuickVue® Business and
Allows Us to Expand into Adjacent Markets that are Larger
17
Since its Debut in 2011, Sofia has been Instrumental
in Capturing a Larger Share of the Flu Market
Influenza Revenue ($,TTM)
$100,000,000
$90,000,000
$80,000,000
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
Q2
2012
18
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
From a Customer Perspective, Sofia is a Compelling Solution,
and a Dramatic Improvement over Visually Read Tests
• FDA-cleared and CLIA-waived instrument and assays
• Objectively read result, with many fail-safe and data management features
• Improved accuracy and performance relative to traditional rapid point of
care devices
• Cellular wireless data management capability
• Easy to use
Sofia Increases Testing
Opportunity to $1B
Sofia Placements by Year
2012
Influenza
Strep A
RSV
hCG
Legionella
Vitamin D
S. Pneumo
Lyme
Other
Assays
Current Sofia products
represent a $300M
market opportunity
2013
2014
Next wave of assays
in development
represents another
possible $700M
2015
2016
0
19
Market data are based on internal company estimates for 2014. Flu market size varies with volatility and seasonality.
Sofia placements are based on qualitative company disclosures from 2013-2017.
5,000
10,000
15,000
20,000
Sofia 2 is the Next Generation of Our Best-selling Sofia Platform,
at a Fraction of the Cost
3
2
1
20
Superior
user-experience
•
Color touch screen
•
QWERTY keyboard
Portability
•
Lighter than Sofia (target 2.5 lbs)
•
Integrated handle
•
8 hour rechargeable battery with 3 years of life
Virena capability,
Integrated Wireless,
Ethernet and USB Ports
4
Sofia
Compatibility
•
CLIA Waived
•
Migrate Sofia menu
•
FLU, RSV, Strep A initially
followed by assays that diversify:
Vitamin D and Lyme
5
•
Virena integrated, no added router
•
Cellular and wifi
Other Benefits
•
Bi-directional LIS Capability
•
Integrated barcode scanner
Sofia 2 Takes Sofia Immunoassay Testing to the Next Level
Sofia
Sofia 2
•
•
•
•
•
•
• Uses Sofia cartridge
Uses Sofia cartridge
Approx. $1500 instrument COGS
Supports external barcode reader
External Virena router
Opt-in Virena participation
Covers the mid-volume segment of the
market
• Approx. $400 instrument COGS
• Integrated barcode reader
• Integrated Virena router
• Opt-out Virena participation
• Also supports higher- and lower-volume
utilization
• Improved optics
• Improved GUI
• Kinetic Read allows faster reporting
• Improved sensitivity and precision
21
Quidel Molecular:
Solana® and
Savanna®
Quidel’s Molecular Products are Evolving from Introductory Offerings
into More Sophisticated Instrumented Molecular Systems –
All Based On Quidel’s Proprietary Technology
First Generation
Non-instrumented MDx products
Next Generation
Instrumented MDx systems
FDA - Cleared,
Mod - Complex
FDA - Cleared,
Mod - Complex
AmpliVue
Solana
Isothermal HDA technology
in a hand-held disposable format
Isothermal HDA instrumented System
with lower cost assay
HDA &
Assay
Menu
FDA – Cleared,
Highly – Complex
Under Development
Lyra
RT PCR technology for
established PCR instruments
Savanna
Assay Menu
Integrated MDx system capable of
Phase-Gate extraction or HDA amplification
Phase - Gate
Extraction
Technology
23
Solana is Quidel’s First Instrumented Molecular System, Aimed at Solving
Healthcare Issues Like Turn-around Time and Total Cost of Ownership
24
Example: Solana Performs Better than Culture for GAS
Performance Results of Solana GAS Assay
for Group A β-hemolytic Streptococcus
Overall Performance (All Sites)
Solana GAS
25
Composite Culture
Positive
Negative
Total
Positive
220
24*
244
Negative
4**
833
837
Total
224
857
1081
One (1) specimen
(0.09%) was invalid
(in both the initial and
repeat test no internal
control was detected)
and has been removed
from the Expected
Values table.
After Discordant
Analysis
95% CI
Sensitivity:
220/221 99.5%
Specificity:
833/841 99.0%
Sensitivity
220/224
98.2%
95.5%
to 99.3%
Specificity
832/857
97.1%
95.7%
to 98.0%
*Of the twenty-four (24) discordant specimens, sixteen (16) of these specimens were positive for GAS when tested with an
additional FDA-cleared molecular device, eight (8) were negative.
**Of the four (4) discordant specimen, three (3) were negative when tested with an additional FDA-cleared molecular device.
Traditional Testing Methods for GAS Require Trade Offs
Traditional Methods Sacrifice
High
• Assay performance and TAT
• Ease of use and accuracy
Culture
• Slow TAT (24 to 48+ hours)
• High specificity and sensitivity
Sensitivity
Culture
Rapid EIA
Rapid EIA
Low
• Cumbersome workflow
• Fast and easy (≤ 5 minutes)
• Poor to moderate sensitivity
• Negatives require culture back up
26
Slow, High Complexity
TAT and Complexity
Source: Gurol et al., The Sensitivity and the specificity of rapid antigen test in streptococcal upper respiratory tract infections, 2010, Tanz et al.,
Performance of a Rapid Antigen-detection test and throat culture in community pediatric office: Implications for management of pharyngitis, 2009,
Medscape, 2014, Pfoh et al., Burden and Economic Cost of Group A Streptococcal Pharyngitis, 2008, Source: HealthFacts®, Cerner Corporation,
Kansas City, MO (Jan 1, 2000 - Mar 31, 2014)
Fast, Easy
Negative Rapid Results for GAS Pose Treatment Challenges
Patient GAS Sample
Positive Result
Prescribe Antibiotic
Rapid Antigen
Providers are forced to make patient
management decisions empirically
in the absence of confirmed results.
Negative Result
Negative Result
?
Culture
(24 to 48 hours)
Positive Result
Discontinue
Antibiotic
(if immediately prescribed
after initial negative result)
27
Shulman ST, Bisno AL, Clegg HW, Gerber MA, Kaplan EL, Lee G, Martin JM, Van Beneden C. Clinical practice guideline for the diagnosis
and management of group A streptococcal pharyngitis: 2012 update by the Infectious Diseases Society of America. Clin Infect Dis. 2012.
13(10): 1279–1282.
Prescribe
Antibiotic
Solana Group A Strep Assay Results in an Actionable Timeframe,
with No Culture Confirmation Required
Today’s diagnostic landscape consist of tests that are rapid, but less
sensitive than culture; or culture methods that are sensitive, but slow.
Solana delivers results you can trust in an actionable timeframe.
Challenge
Solana Solution
• Treat empirically in the absence of
confirmatory results, yes or no?
• Accurate, timely results
• Bring faster, definitive results close
to the patient
• Stat or batch 1-12 patient samples
• No Culture Back up required
• Ease of use and affordability
“It just happens to be molecular.”
28
The Savanna System*
TAT: 45 - 60 minutes
CLIA Waivable (assay dependent)
Low total cost of ownership
Rugged and reliable
Minimal calibration and maintenance
29
*In development.
True sample to results,
random access work flow
Versatile
•
Can run both PCR and HDA
chemistries
•
Quantitative and qualitative assays
•
Individual tests or panels of
3 - 4 targets
Multiple Sample Types
Room temperature reagent storage
The Savanna Cartridge: Fully Integrated
Front
Contains All Assay
Components
30
Back
Simple “Twodimensional” Design
Simplifies
Manufacture And
Reduces Cost
Reagent Stabilized
as Lyophilized
Tablets
Assay Buffers and
Liquids Contained in
Foil Blisters On Back
of Cartridge
Savanna Capabilities
Low Capital Cost
31
Low Disposable
Cost
Simple Sample to
Results Operation
TAT 45 - 60 Minutes
Runs Both PCR and Isothermal (HDA) Assays
Multiplex Panels
•
Allows selection of best option by assay
•
•
Virtually all Quidel MDx assays can be adapted
to Savanna
3 – 4 targets plus a
control with existing
technology
Potential For
Finger Stick
Plasma Sample
•
Quantitative PCR capability expands menu range
•
Exploring options to
expand via
cartridge/chemistry
enhancements
Savanna Menu
Unique Assays
“Bread and Butter” Assays
•
Drive Placements
•
Enable platform consolidation
•
Leverage Savanna capabilities
•
Volume to support placement
Right Panels/Right Price
Other
Bread and Butter
•
Top 3-4 clinical targets
•
Quantitative
•
Commonly run MDx tests
•
TAT <60 minutes
•
High Burden
•
EIA assays to be converted
•
Expand with second cartridge
Examples: Transplant,
HIV, HCV, and TB
•
Co-exist with full panel systems
Examples: STD, Vaginosis, Pharyngitis, and HSV/VZV
32
Examples: C difficile, MRSA, and
Group B Strep
Solana and Savanna: Meant to Work Together
Solana
Savanna
• Some sample handling steps
• True sample to results workflow
• Isothermal assays
• Isothermal and PCR assays
• 12 samples per 35 minute run
• 2 random access bays (45-60 min)
• Best for batch testing
• Best for on-demand testing
• Higher volumes at very low cost
• Rapid low cost mini-panels
• Efficiently scales to handle peak
volumes of seasonal assays
• Quantitative assays
33
• CLIA Waiver (assay dependent)
Virena®: An
Opportunity to
Expand POC
Testing
Virena Connectivity Enables Access to the Quidel Ecosystem
and Access to Testing Data in Near Real-time
Quidel Sofia/Virena Ecosystem
SOFIA
SOFIA 2
SOLANA
TEST
INPUT
VIRENA
QUIDEL
CLOUD
Create disease maps that are
Data
visualization
tools will be
tailored to each
constituent
audience
35
•
Detailed
•
Dynamic
•
As real time as possible
Consumers
Doctors
Labs
Public Health
•
Disease/Flu map
•
Better information
•
•
•
Ability to plan
•
Granular “flu” map
•
Ability to plan
Lab Management
more efficient
Timely, accurate,
granular data
Virena Connectivity Adds Another Dimension of Functionality
to Quidel’s Diagnostic Platforms
Virena Adds a New Dimension to Rapid
Testing, Keeping You Informed
Virena Delivers Value to
Laboratories of All Sizes
• Remote instrument management across
multiple sites and multiple instruments
• Remote instrument management
• Infectious disease mapping
• Near real-time communication with public
health
• Secure access to a dynamic suite of
reports from any web-enabled device
• QC records
• Calibration history
• Patient test results
36
Virena Connectivity Adds Another Dimension of Functionality
to Quidel’s Diagnostic Platforms
Real-time Infectious Disease Mapping
Virena is Simple, Secure and Compliant
• Respond rapidly to emerging infectious
disease trending in your area
• Data is de-identified and shared with federal,
state and local health organizations in near
real-time
• Aid in diagnostic accuracy
• Efficiently manage staffing needs
• All data is shared with authorized users
at myvirena.com
• Transmits data on a secure cellular, 4G LTE
network, connection to existing networks is
not required
37
In Summary, Virena Adds Value Through Connected Visibility
Creates the Ability to Remotely Manage Instrument Usage, Support Operator Training Initiatives,
and Monitor QC Compliance
38
Enables Monitoring a Community of
Connected Users
Offers a New Level Of Control,
Oversight and Outcome Management
Provides a Year-round Service to Patients
and Providers by Communicating
Disease Progression
Supports a Unique Partnership Between
Private and Public Health
Inside the
Flu vs.
Non-Flu
Businesses
39
7
5
150
4
100
0
National ILI
Baseline, CDC
2
50
1
Source: Company Disclosures, and CDC Influenza Surveillance Data; http://gis.cdc.gov/grasp/fluview/fluportaldashboard.html
0
While ILI Varies with Each Season, Quidel’s Revenues Have Grown at 12% Through Growth in Influenza
Test Sales and the Introduction of Non-flu Products that Capture Market Share
Annual Revenue (x $1M)
40
3
2009-1
2009-7
2009-13
2009-19
2009-25
2009-31
2009-37
2009-43
2009-49
2010-3
2010-9
2010-15
2010-21
2010-27
2010-33
2010-39
2010-45
2010-51
2011-5
2011-11
2011-17
2011-23
2011-29
2011-35
2011-41
2011-47
2012-1
2012-7
2012-13
2012-19
2012-25
2012-31
2012-37
2012-43
2012-49
2013-3
2013-9
2013-15
2013-21
2013-27
2013-33
2013-39
2013-45
2013-51
2014-5
2014-11
2014-17
2014-23
2014-29
2014-35
2014-41
2014-47
2014-53
2015-6
2015-12
2015-18
2015-24
2015-30
2015-36
2015-42
2015-48
2016-2
2016-8
2016-14
2016-20
% Influenza-like Illness (ILI)
How Volatile are We, Actually?
8
200
6
Seasonality Can Affect New Product* Revenue,
However Non-Flu New Products Continue to Grow
Sofia & Molecular Products, (TTM Revenue x $1,000)
$70,000
$60,416
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Flu Vs. Non-Flu Sofia & Molecular Product Revenue (TTM x $1,000)
$50,000
S&M Products from Flu $38,479
$40,000
$30,000
S&M Products Ex-Flu $21,937
$20,000
$10,000
$0
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
41
*New Products Include Sofia and Molecular Product Lines.
Quidel’s Multiple Near-Term Catalysts will Grow the Non-flu Business…
Category
Product
Sofia/Sofia 2 Strep A
Sofia/Sofia 2 RSV
Sofia and Sofia 2
Immunoassays
Sofia Lyme
Sofia Vitamin D
Alternate/Adjacent Markets
Bio Assays
Graves’ Disease/Hashimoto’s
Strep A
C. difficile
Solana
Molecular
Trichomonas
GBS
HSV 1+2/VZV
Research- Bone Health
New Bone Health and Renal Markers
Cell Culture
Custom Cells
M&A or Collaboration
Other Non-flu products
42
Reflects products in development and other anticipated catalysts.
…and Quidel’s Multiple Growth Engines Position the Company
for Growth Over the Next 5 Years
2017
Sofia Immunoassays
2019
2021
Sofia Vitamin D, Lyme
Sofia 2 Immunoassays
Graves’ Disease, Bone and Renal Health Markers
Solana MDx
Savanna MDx
43
Financials
and Capital
Structure
We are on a Path to Our Longer Term
Financial Objectives
45
1
2
3
4
5
Achieve low- to midteens in annual
revenue growth
through new
product
introductions
Invest in the
development and
commercialization of
new products driving
gross margins to
exceed 65%
Leverage
operational
efficiency driving
EBITDA margins in
excess of 30%
Maximize cash flow
from the core
business
Pursue outside
opportunities
to complement
organic growth and
drive nonrespiratory revenue
Quidel Financial Overview
$250.0
Revenue
(in $ million, percent gross margin in white)
$196.1
$200.0
$177.3
$184.2
$191.6
120%
100%
80%
$150.0
60%
61%
62%
(adjusted, in $ million)
$45.0
$40.0
$38.9
$40.9
$33.0
$35.0
$157.7
$100.0
Adjusted EBITDA(1)
63%
60%
62%
$27.9
$30.0
$27.4
$25.0
$20.0
40%
$15.0
$50.0
20%
$10.0
$5.0
$0.0
0%
2012A
2013A
2014A
2015A
$-
2016
2012A
2013A
2014A
2015A
2016A
12 months ended December 31
Balance Sheet as of December 31, 2016
(in millions)
Cash and Cash Equivalents
$169.5
Total Assets
$388.3
Long-term Debt and Lease Obligation
$148.3
Stockholder’s Equity
$200.6
46
Adjusted EBITDA excludes interest, depreciation, amortization, stock
compensation, business acquisition costs, asset impairment and restructuring charges.
We continue to monitor our expenses diligently and manage the business
prudently as we remain dedicated to growing the top line.
Annual Investment: R&D
Annual Investment: S&M
(in $ million, percentage of sales in white)
(in $ million, percentage of sales in white)
$45.0
$60.0
40%
40%
35%
$40.0
$38.7
$37.9
35%
$50.0
$47.9
$35.5
$34.2
$35.0
$47.8
$46 - $48
30%
$43.1
$33 - $35
30%
$40.0
$30.0
$35.7
$27.7
25%
$25.0
19%
21%
18%
20%
$32.3
23%
24%
25%
25%
20%
$30.0
20%
18%
20%
21%
$20.0
15%
15%
$15.0
$20.0
10%
10%
$10.0
$10.0
$0.0
0%
2012A
47
5%
5%
$5.0
2013A
2014A
2015A
2016A
2017E
$0.0
0%
2012A
2013A
2014A
2015A
2016A
2017E
We’ve Leveraged our Capital Structure to Pursue Outside Opportunities
that Complement Flu Growth and Drive Non-respiratory Revenue
Recent Capital Structure History
Target/Action
Time Period
Rationale
Diagnostic Hybrids, Inc. (DHI)
2010
Paid approx. $130 million for $45 million annual cell
culture business, direct to customers, approx. 75% of
revenues are non-flu
Share issuance
2011
Raised $60 million by issuing 4.6 million shares at
$13.15/share
BioHelix, Inc.
2013
Paid net consideration of $18.5 million at closing for
proprietary isothermal molecular HDA technology in
infectious disease
AnDiaTec GmbH
2013
Paid approx. $7.3 million for vast library of CE-Marked
MDx products in adjacent markets
Convertible Notes Offering
Dec 2014
Raised $172.5 million, 3.25% coupon, due 2020
Share Repurchases
2015 – 2016 (YTD)
Opportunistic repurchases of approx. 2.5 million shares
Bond Repurchase
2016 (YTD)
Approx. $4.5 million in one-time opportunistic purchase
Immutopics, Inc.
March 2016
Paid approx. $5.5 million for $2M+ Bone Health business
at 70%+ gross margin with manufacturing synergies
48
M&A Strategy
Use cash on hand to pursue inorganic
opportunities to diversify and augment the nonrespiratory part of the business
What we’re looking for…
• Targets range from tuck-ins up to equal size
• New technology that accelerates the advancement of in-house MDx abilities
• Products that reduce the seasonality, volatility of flu season
• Firms that can increase our international market exposure
• Accretive within 12-24 months
49
Growth Objectives and Near-term Milestones
Fortify
•
50
Grow Sofia installed base
with Sofia, Sofia 2 and
gain market share.
Attack
•
Convert Strep A culture
testing with Solana and
AmpliVue GAS.
•
Expand Solana placement
opportunities during the flu
season with Solana Influenza
A+B
•
Launch additional Solana menu
to broaden Solana’s value
proposition.
Forge Ahead
•
Expand non-respiratory
opportunities through the
development of Sofia Vitamin D,
Lyme.
•
Increase the number of
Virena accounts that are
transmitting data.
•
Continue to pursue inorganic
opportunities to diversify and
augment the non-respiratory part
of the business.
•
Continue the development of the
Savanna instrument and cartridge.
Q&A
Investors Contact
Ruben Argueta
Quidel Corporation
O: 858.646.8023
E: [email protected]