OraSure Technologies sign generic

Shares of OraSure Technologies Inc., a maker of medical diagnostic equipment, rose Wednesday after the company reported record revenue Tuesday, and forecast additional gains in sales and positive cash flow from operations.

OraSure closed up 32% to $4.22 on the NASDAQ market, where it trades under the ticker symbol OSUR. Trading volume was 7.3 million shares, five times the daily average.

Bethlehem-based OraSure said Tuesday that second-quarter revenue was $80.2 million, up 39% from the year-ago quarter, and ahead of the $70.9 million consensus estimate of analysts compiled by Zacks Investment Research. Earnings per share, on an adjusted basis that excludes items considered unusual or one-time, were breakeven.

The report was welcome news from a company that has been through multiple leadership changes this year and pursued a fruitless search for strategic alternatives. OraSure's InteliSwab COVID-19 test was the big driver of sales, providing $43.1 million of the quarterly revenue.

The investment community is forward-looking, and while the first earnings report under the leadership of Chief Executive Officer Carrie Eglinton Manner was positive, the forecast for the rest of the year may be more important.

OraSure projects third-quarter revenue of $90 million to $95 million, which would be a 67% to 76% increase over the same quarter in 2021. It also forecast improvements in gross margins, and positive cash flow from operations starting in the fourth quarter. Cash flow from operations reflects the cash generated by a company's core business. It excludes capital expenses and investment revenue or expense.

Eglinton Manner, OraSure's third in 2022, said there is a lot of work to be done, but added, "Our challenges are addressable."

The company will continue to focus on cutting expenses, she said, and move toward more automation in production. OraSure is working on a "super factory" concept but provided few details Tuesday on what that will mean. "Continuous production" instead of making products in batches is one part of the move.

OraSure's tumultuous 2022 started in January, with an adjusted revenue forecast, the announcement of the departure of then-CEO Stephen Tang and the beginning of a search for "strategic alternatives" that did not pan out. In May, OraSure said the search was over and it would focus on better execution.

Eglinton Manner took over June 4 from interim CEO Dr. Nancy Galliano.

"It's a real pleasure, my first earnings call, to share today very strong second-quarter results," she said Tuesday.

Eglinton Manner has held executive roles at Quest Diagnostics and General Electric. Another Quest Diagnostics veteran, Kenneth McGrath, will be the company's new chief financial officer. Quest Diagnostics is more than 50 times as large as OraSure, based on their market capitalizations.

The company announced other personnel moves Tuesday. Board Chairman Michael Celano and members Ronny Lancaster and Eamonn Hobbs will leave Nov. 8. Mara Espinall will lead the board, which will be reduced to seven members from 10.

Despite Wednesday's move, OraSure shares are still way down. The 52-week high is $13.57, with a low of $2.62.

OraSure was founded in 1988 as SolarCare Technologies and took its current name after a merger. Its portfolio includes the OraQuick test for HIV, in addition to InteliSwab and other products.

 

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