Quidelortho Corporation · NASDAQ:QDEL
Quidelortho — Quidel — Investor Day (April 2018)
119 slides from Quidelortho's investor day presentation, Apr 3, 2018
Slide 1: Quidel 2018 Analyst Day
QUIDEL 2018 ANALYST DAY Tuesday, April 3rd, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws that involve material risks, assumptions and uncertainties. These statements are not guarantees of future performance. Many possible events or factors could affect our f
Slide 3: Today's Agenda
Today’s Agenda 1 The IVD Market and How We Compete Doug Bryant 2 Deeper Dive Strategy Discussion Bill Ferenczy 3 R&D Development Werner Kroll 4 North American Commercial Update Ed Russell 5 International Business Review Ratan Borkar 6 Integration Update Karen Gibson 7 Finance and M&A Randy Steward 8
Slide 4: The IVD Market and How We Compete
THE IVD MARKET AND HOW WE COMPETE Doug Bryant, President & CEO
Slide 5: POC Testing is Expected to Continue to Drive Growth of Overall IVD Spend
POC Testing is Expected to Continue to Drive Growth of Overall IVD Spend 2020 2016 Global IVD Market $60.5 Bn $72.3 Bn CAGR: 4.0% 2016 2020 Global in-vitro POCT Market $6.5 Bn $8.7 Bn CAGR: 6.0% Source: Meddevicetracker 2016,WHO, Deloitte, Quidel Analysis Global POCT Market excludes professional and
Slide 6: Global Test Volume Largely Driven by Traditional Markets
Global Test Volume Largely Driven by Traditional Markets, though Emerging Markets represent Key Growth Opportunities for the IVD Market IVD Diagnostics Market Outlook Percentage of Global Sales North America RoW 37% 12% Asia- Pacific Traditional IVD test markets to experience slower 19% growth rate
Slide 7: Increased Pressure for Healthcare Decentralization
Increased Pressure for Healthcare Decentralization creating Growing Sub-segments where Diagnostic Testing Occurs Decentralization of care POCT By Segment continues in response to high costs associated with 2016 2020 traditional settings Hospital Bedside $3.9 Bn CAGR: 6.2% $5.3 Bn Approximately 3
Slide 8: Where We Play…
Where We Play… Quidel Markets Non-Quidel Markets $Bn $Bn Global In Vitro Diagnostic Reagent Sales 8 Global Professional POC Test Sales * 80 Other 70 7 POC, Drugs of Abuse Professional/Hospital 60 POC - Consumer 6 Fecal occult blood Hematology Blood Screening, 50 Typing 5 HbA1c MDx Coagulation/PT, AC
Slide 9: Our Strategic Intent
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 mar
Slide 10: Quidel's Main Objectives in Support of Our Strategic Intent
Quidel's 3 Main Objectives in Support of Our Strategic Intent Cultivate organic growth Fully integrate the Triage Grow revenues to from Legacy QDEL and and BNP Businesses, FY $1B through M&A Triage and BNP Businesses and realize synergies; and new product Pay down debt introductions Near-to-Mid Term
Slide 11: Flu, Although Volatile, Continues to Drive Growth
11 % Influenza-like Illness (ILI) 0 1 2 3 4 5 6 7 8 9 2009-1 2009-8 2009-15 2009-22 2009-29 2009-36 2009-43 2009-50 2010-5 Flu Revenue Trend 2010-12 2010-19 2010-26 2010-33 2010-40 2010-47 2011-2 2011-9 2011-16 2011-23 2011-30 2011-37 2011-44 2011-51 National ILI 2012-6 Baseline, CDC 2012-13 2012-20
Slide 12: Complementary Product Lines like Triage and Beckman BNP
Complementary Product Lines like Triage and Beckman BNP will Mitigate some of Quidel’s Flu Volatility, Reducing Flu Exposure in half, while Creating Scale, providing a Stable Revenue Base, and Introducing us to a New Set of Customers. 2017 Revenue Profile 2018 Anticipated Revenue Profile 39% 20% 17%
Slide 13: Quidel – Building on a History of Innovation
Quidel – Building on a History of Innovation 2009 - Present $300.0 Revenues Over 25 FDA clearances Acquired Triage and BNP Submitted over 30 510(k) and expanded product Businesses from Alere packages to the FDA claims, 4 CLIA waiver designations $250.0 $47.0 20% Organic Growth Launched Sofia 2 platf
Slide 14: Our Focus for 2018
Our Focus for 2018 Integration of the Triage and BNP Businesses Paying down Debt • Unlocking synergies Positioning the company for added M&A in the medium to longer term • Leveraging our new sales territories and stronger sales channels in North America • Strengthening our International Presence 14
Slide 15: A Deeper Dive Strategy Discussion
A DEEPER DIVE STRATEGY DISCUSSION Bill Ferenczy, Vice President Strategy
Slide 16: Evolution of Quidel Strategy
Evolution of Quidel Strategy 1979 1985 1999 Quidel Strep A Flu A/B Founded 1970 1980 1990 2000 2009 Cellular Molecular Digital Cardiology Eye Assays Diagnostics Immunoassays Toxicology Health Broader-based diagnostic company that delivers revenue and 1989 margin more consistently. Use existing resou
Slide 17: Charting a Course for the New Quidel
Charting a Course for the New Quidel Customers Needs Market Trends Competition Current Technology Quidel and Platforms Strategy Potential Assays Historical Success Capabilities Brand Equity 17 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 18: Customer Driven Approach
Customer Driven Approach A Traditional View Reference Labs Hospitals Clinics Home 18 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 19: Our Customer Driven Approach
Our Customer Driven Approach A More Granular Analysis is Needed Research Reference Labs Hospitals Clinics Home LabCorp Pharma IDN Large Small Micro Free- Urgent Public OTC and Quest Public Physician Retail CRO Univ. Core Hospital Hospital Hospital Standing Care Health Pharmacy Self-Testing ARUP Heal
Slide 20: Where We Play Today
Where We Play Today Research Reference Labs Hospitals Clinics Home LabCorp Pharma IDN Large Small Micro Free- Urgent Public OTC and Quest Public Physician Retail CRO Univ. Core Hospital Hospital Hospital Standing Care Health Pharmacy Self-Testing ARUP Health Office Clinic Lab Lab Lab Lab ER Center C
Slide 21: Competitive Environment
Competitive Environment Research Reference Labs Hospitals Clinics Home LabCorp Pharma IDN Large Small Micro Free- Urgent Public OTC and Quest Public Physician Retail CRO Univ. Core Hospital Hospital Hospital Standing Care Health Pharmacy Self-Testing ARUP Health Office Clinic Lab Lab Lab Lab ER Cent
Slide 22: Favorable Market Trends for POCT
Favorable Market Trends for POCT Research Reference Labs Hospitals Clinics Home LabCorp Pharma IDN Large Small Micro Free- Urgent Public OTC and Quest Public Physician Retail CRO Univ. Core Hospital Hospital Hospital Standing Care Health Pharmacy Self-Testing ARUP Health Office Clinic Lab Lab Lab La
Slide 23: Decentralization Creating More Opportunities for POCT
Decentralization Creating More Opportunities for POCT Multiple Channels for Primary Care Delivery Surge in Urgent Care – Nearly 11,000 Locations Rising demand for high-quality, non-critical care is fueling growth of urgent-care centers. Forecasts are for numbers to grow further as the population age
Slide 24: Quidel Strategy Overview
Quidel Strategy Overview Design and develop innovative Leverage these products to Exploit selected opportunities platforms, assays and informatics penetrate and grow business in in other segments by leveraging: that satisfy unmet needs in true POCT and other decentralized POCT settings market segmen
Slide 25: POCT Guided Innovation
POCT Guided Innovation A Clear Definition of POCT is Critical Widely used, but ambiguous term Many people equate POCT with: • Any testing not performed in large central labs • Any testing performed on a POCT-style platform Our definition provides clarity: • Test performed near patient • Can be run b
Slide 26: POCT Guided Innovation
POCT Guided Innovation Enables Three Sustainable Positions Design for POCT: 1. Penetrate/Grow POCT Business Hospital ER, ICU and OR • Rapid results Free standing ERs, Urgent Care • Simple (“Waivable”) Physician, STD, Retail Clinics; Pharmacies Mobile health, home testing, Etc. • Small footprint/port
Slide 27: Where We Will Win
Where We Will Win Research Reference Labs Hospitals Clinics Home LabCorp Pharma IDN Large Small Micro Free- Urgent Public OTC and Quest Public Physician Retail CRO Univ. Core Hospital Hospital Hospital Standing Care Health Pharmacy Self-Testing ARUP Health Office Clinic Lab Lab Lab Lab ER Center Cli
Slide 28: Continued Immunoassay Innovation and Menu Expansion
Continued Immunoassay Innovation and Menu Expansion 2018 >2023 Sofia/QuickVue Grow/Leverage Near Term Assays Sofia2 Instrument Base “Enhanced” Assays Other Potential Sofia Next Generation Lyme Vitamin D and/or Triage Assays IA System Flu WB (Europe) RSV Strep 98 Cardiac, toxicology, A+B Eye Health C
Slide 29: Savanna Will Drive MDx POCT Penetration and Growth
Savanna Will Drive MDx POCT Penetration and Growth 2018 2020 >2023 Other Potential Savanna Assays Savanna GI Panel(s) Finalize Cartridge and Instrument Development C Difficile Sample 30 – 45 Clinical to Results Minute TAT MRSA, VanA, Carba-R Studies for Launch Multiplex Up to 12 Targets Europe Late
Slide 30: Placements Power Virena
Placements Power Virena Cloud 1 Cloud 2 Public Health Health System 7000 Connected Analyzers Daily Data Upload Cloud-Based Data Management (Now >1 million results/month in peak season) Simple, secure De-identified data Data securely stored De-identified data may and HIPAA compliant automatically tra
Slide 31: Virena Powers Placements and Test Utilization
Virena Powers Placements and Test Utilization Virena Ecosystem Creates Value for Multiple Stakeholders LAB POL POL Health System ED POL Urgent Care Public Health Clinicians Health Systems/Providers Quidel • Real-time disease • Prevalence data • Management of remote • Monitor real-time usage surveill
Slide 32: A Much Larger Addressable Market for the New Quidel
A Much Larger Addressable Market for the New Quidel $3.3B $3,500 $3.3B New $3,000 Markets $2,500 Infectious Diseases ~ $1B $2,000 $1,500 Timeframe 2013 - 2018 >2019 Cardiology $1,000 & QuickVue QuickVue Toxicology Sofia Sofia 2 Platforms $500 Solana Savanna Triage $0 32 Copyright © 2018 Quidel Corpo
Slide 33: Summary
Summary POCT-guided design and development of innovative platforms, assays and informatics Penetrate and grow Quidel business in targeted market segments • True POCT settings • Other decentralized and low volume sites Exploit selected opportunities in other market segments A focused approach that be
Slide 34: Product Development Update
PRODUCT DEVELOPMENT UPDATE Werner Kroll, Senior Vice President R&D
Slide 35: Product Lines – From Sample to Cloud
Innovative Product Developments Combined with Systematic Evolutionary Improvements of Successful Product Lines – From Sample to Cloud 1984 1998 2011 2017 2022 QuickVue Triage Sofia Sofia 2 NGI • Original product • High sensitivity • Instrument read • Multiplexed • Improved sensitivity concept assay
Slide 36: Savanna Molecular Platform
Savanna Molecular Platform*: Targeting CLIA Waived Sample-In Result-Out Simplicity Mini panels are the sweet spot for Savanna assays in the continuum from one parameter assays to arrays to NGS based broad panels System Builds on Proven Robust Technologies • 4 color PCR multiplexing • Magnetic bead b
Slide 37: 2017 Focus of Savanna Project
2017 Focus of Savanna Project on Development of Solutions for Developed Markets Mini panels are the sweet spot for Savanna assays in the continuum from one parameter assays to Array or NGS based broad panels Provide differentiating therapeutically actionable clinical results Develop critical mass of
Slide 38: Strep 98
Strep 98*: Next Generation Sofia2 Lateral Flow Strep A Assay with Performance Not Requiring Culture Backup Addressing the entire clinical Process Line Quidel already providing complete strep Reducing time to “confirmed” results from A solution from RADT to confirmatory days or hours to minutes Solan
Slide 39: Sofia 2 Whole Blood Lyme Assay
Sofia 2 Whole Blood Lyme Assay Racing toward Simplicity in an Overly Complicated World Simplify user workflow and improve patient experience While choosing a system that is simple we ensured by the introduction of Current Workflow bidirectional flow concept that we provide still more or the same inf
Slide 40: RVP4: Respiratory Virus Panel on Sofia
RVP4: Respiratory Virus Panel on Sofia 2 New lateral flow multiplex technology allows cost conscious simultaneous detection of panel of most prevalent respiratory viruses Differential diagnosis assay for patients presenting Prevalence during Flu season is comparable with ILI symptoms for Flu, RSV an
Slide 41: Virena Data Management and Surveillance Tool
Virena Data Management and Surveillance Tool Real-Time Data Management Simple, Secure and Compliant • Remotely Manage Instrument Usage, Support Operator • Data is de-identified and shared with federal, state and local Training Initiatives, and Monitor QC Compliance health organizations in near real-
Slide 42: Break
BREAK
Slide 43: North American Commercial Update
NORTH AMERICAN COMMERCIAL UPDATE Ed Russell, SVP North America Commercial Operations
Slide 44: US Commercial Update Overview of Acquired Alere Assets
US Commercial Update 1 Overview of Acquired Alere Assets 2 Points of Commercial Leverage and Lift 3 Integration Execution 4 Trends of Influenza Accounts 44 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 45: Acquired Assets in US
Acquired Assets in US 2015 to 2017 Revenue CAGR 0.4% • Hospital growth flat Triage MeterPro 2015 – 2017 CAGR = 0.4% • POL growth at ~4% $70,000,000 2,100 • 6,450 Triage instruments across ~2,100 $50,000,000 accounts Revenue (USD) # of Accounts 1,400 $30,000,000 • 60% of accounts purchasing one assay
Slide 46: Commercial Leverage and Lift
Commercial Leverage and Lift Common Call Points Drive Sales Rep Efficiency • Acute : Core Hospital Labs, EDs, IDNs • POL : Urgent Care, Family Practices, Free Standing EDs, Community Health Centers • Government : VA System, DOD, Public Health Minimal Incremental Sales Headcount Legacy Quidel built-o
Slide 47: Integration Execution
Integration Execution Intense Sales Training Program • Two comprehensive in-person training sessions • All Reps Certified on Product, Positioning, (Oct 2017 & Feb 2018); augmented by required Competition and Disease States e-learning program (Brainshark) 2018 Sales Compensation Plan Driving Triage •
Slide 48: Influenza
Influenza Distinct Ordering Account - QuickVue & Sofia Influenza +21% 11,174 9,204 6,167 3,466 SOFIA QV 5,738 5,007 +16% 19,610 16,925 Q416 Q417 8,727 6,286 SOFIA QuickVue 10,639 10,883 2016 2017 48 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 49: International Business Review
INTERNATIONAL BUSINESS REVIEW Ratan Borkar, SVP International Commercial Operations
Slide 50: Discussion Overview
Discussion Overview Overview of international business Profile of the Triage business acquired Go-to-market (GTM) strategy for the acquired business Progress made since Day 1 5 50 Copyright © 2018 Quidel Corporation. All rights reserved. 0
Slide 51: International Market Dynamics
International Market Dynamics Physician office testing in some countries Call point is mainly hospitals Flu testing is the standard of care in a few markets; limited Strep A market 51 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 52: International Market Dynamics
International Market Dynamics Intense competition from low cost manufacturers (FDA not barrier to entry) Reimbursement varies 52 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 53: Prior to 2012 We Had a Handful of Distributors
Prior to 2012 We Had a Handful of Distributors OSLO VANCOUVER LYON TOKYO SAN DIEGO Direct Shipments Biomerieux 53 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 54: Commercial Strategy
Commercial Strategy Focus on Key Markets 4 Register Products 3 Establish Channels 2 Build the Team 1 54 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 55: The Triage Acquisition Was Transformational for International Business
The Triage acquisition was transformational for the international business Quidel Int’l Sales Triage + BC-BNP Int’l Sales Combined Entity Int’l Sales (Pro forma) $33 M* $120 M $153 M Quidel 22% BC-BNP $33 M Quidel 35% Triage $33 M $42 M Triage 50% BC-BNP 65% $77 M 28% $77 M $42 M Key Observations •
Slide 56: 2018 International Commercial Structure
2018 International Commercial Structure EMEA CHINA ASIA PACIFIC LATAM 56 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 57: Concurrently We Are Building Back Office Functions
Concurrently We Are Building Back Office Functions ERP systems are being built to support Order to Cash 3PL proposals are being received for shipping and logistics for Europe, China and India Shared Services for Europe being built in Ireland Building China Operations 57 Copyright © 2018 Quidel Corpo
Slide 58: 2018 Top Priorities
2018 Top 3 Priorities Defend Transition the business from Abbott to Quidel Fortify Hire the team and build supporting infrastructure Attack Position the combined business for sustainable growth 58 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 59: Geographical Footprint of the New Quidel
Geographical footprint of the new Quidel BC-BNP, Quidel, 19% 12% Quidel, 49% BC-BNP, 37% Canada EMEA Triage, $57 M 44% $7 M 2% 12% Triage, 39% BC-BNP, Quidel, 6% 37% BC-BNP, China 20% $39 M 8% US Triage, $326 M 57% Triage, 70% 19% Quidel, 61% BC-BNP, 12% BC-BNP, 1% Asia $24 M LATAM Quidel, 5% Quidel
Slide 60: Triage & BNP Integration Update
TRIAGE & BNP INTEGRATION UPDATE Karen Gibson, Vice President IS & Integration
Slide 61: Everyone Loves This Deal…
Everyone LOVES This Deal…. “We have been waiting for management to put its cash balance to use on an asset that diversified the business and it seems it found an asset which does just that, and does it at a valuation and accretion that seems almost hard to believe.” “..we are fans of the bold move”
Slide 62: How Do You Realize Deal Success?
How Do You Realize Deal Success? The Revenue The Potential Capture The Synergies 62 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 63: Integration Team Structure
Integration Team Structure Executive Steering Committee Integration Management Capture the Revenue Capture the Synergies Capture the Potential Corporate Administration Corporate Operations Global Order to Cash Human Manufacturing Quality US & OUS Regulatory/ Finance Operations Mgmt Commercial Compli
Slide 64: Integration Progress
Integration Progress First 90 Days Transitioned 472 US employees from Abbott Assumed all US customer contracts; Sales and Marketing Began taking orders and collecting cash from US customers and 24 direct export markets (53% of Revenue) - leveraging Abbott distribution capabilities under Transition S
Slide 65: Integration Progress
Integration Progress First 90 Days Completed Sale/Leaseback Segregated San Diego Summers Ridge of Summers Ridge Facility-$149M Science Park Campus–Co-located Quidel employees into Buildings C and D 65 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 66: Integration Progress
Integration Progress First 180 Days Restructured North American Developed Global ERP Sales to incorporate Triage and BNP transition plan Hired an additional 19 Initiated EMEA ERP team; employees in Austria, China, Contracted with DHL 3PL Germany, and Ireland for EMEA Selected Business Office in Galw
Slide 67: Integration Synergies
INTEGRATION SYNERGIES Capturing the Synergies
Slide 68: Synergy Categories
Synergy Categories Supply Chain Harmonization Leverage suppliers across the combined enterprise Yield Improvement Improve manufacturing yields via minimizing process variation, defects, and rework Productivity • Eliminate redundant roles within the combined organization • Improve or automate process
Slide 69: Synergy Plan
Synergy Plan Annualized Run Rate Plan Annualized Run Rate Synergy Plan ($, in millions) 12/18 $10.8M 12/19 $15.5M 12/20 $20.0M 69 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 70: Yield Improvement
Yield Improvement Systematic, data-driven initiative to focus on key bottlenecks and true process improvement opportunities… 12 projects identified – 6 currently in process… $7M annualized opportunity when fully realized… 70 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 71: Manufacturing is one of our Core Competencies
Line 5 Automation Manufacturing is one of our Core Competencies … PLAY 71 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 72: Building the Global Business
BUILDING THE GLOBAL BUSINESS Capturing the Potential
Slide 73: Building the Global Business
Building the Global Business Go to Market Strategy Converting IT Staffing Triage business Systems to Quidel control requires balancing several factors Global Product Distribution Registrations 73 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 74: Quidel/Abbott Transition Service Agreements
Quidel/Abbott Transition Service Agreements (TSA) Operating TSA Financial Reporting & Sales & Marketing Order To Cash Warehousing & Logistics Settlement • Sales • Customer • Warehousing • Reporting of Types of • Marketing Service • Transportation sales,A/R, inventory, Services • Order • • Management
Slide 75: Day 30 – US Operating Model
Day 30 – US Operating Model Day 30 • Implemented for US Alere Quidel accepts and 3rd party export order and passes manages customers ( in 25 it to Alere inventory countries) • Quidel manages customer relationship • Quidel owns financial transaction with customer Customer orders • Utilizes Alere’s fr
Slide 76: Building the Quidel Global Footprint
Building the Quidel Global Footprint Revenue estimates are FY2016 76 76 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 77: EMEA Shared Service Center
EMEA Shared Service Center EMEA Shared Service Center will be in Galway, Ireland DHL 3PL Distribution Center will be in Nijmegen, NL Finance, Customer Service, Technical Support, HR, IT Legal – ~30 in 2018 Merchant’s Square 77 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 78: EMEA Shared Service Center
EMEA Shared Service Center EU Distribution Center EU Shared Service Center Services from EMEA (Galway) 49 Countries ~2770 Customers ~58 Distributors ~$50M in Revenue 78 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 79: China Regional Office
China Regional Office Business office in Shanghai, China Finance, Customer Service, HR, IT, Technical Support, Legal, Regulatory, Sales and Marketing Supporting full China team of 42 employees 79 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 80: Global Order-to-Cash System
Global Order-to-Cash System Global Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Order to Legacy US US Quidel - EMEA SSC China US Triage Cash Quidel to Alere Global ERP to Global to Global Global ERP Strategy Interface Cloud ERP Cloud ERP Cloud Cloud Leverages Infor software At completion, we will have in
Slide 81: Complete Global Business Infrastructure
Complete Global Business Infrastructure EU Shared Service Center OH Customer China Regional Svc/Mfg Office CA HQ shared Svc Center Mfg (2) Serviced from the USA China Serviced from EMEA 81 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 82: Financial Update
FINANCIAL UPDATE Randy Steward, Chief Financial Officer
Slide 83: 2017 Pro-forma Results
2017 Pro-forma Results 83 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 84: Growth Drivers of the Business
Growth Drivers of the Business Quidel’s Revenue Structure (FY17) Cardiac Rapid Specialized Molecular Immunoassay Immunoassay Diagnostic Solutions Diagnostic Solutions • Triage • Sofia • Virology + Thyroid • Lyra • Triage Tox. • QuickVue • Specialty • AmpliVue • Beckman BNP • Eye Health • Other • Sol
Slide 85: Geographical Footprint of the New Quidel
Geographical Footprint of the New Quidel BC-BNP, Quidel, 19% 12% Quidel, 49% BC-BNP, 37% Canada EMEA Triage, $57 M 44% $7 M 2% 12% Triage, 39% BC-BNP, Quidel, 6% 37% BC-BNP, China 20% $39 M 8% US Triage, $326 M 57% Triage, 70% 19% Quidel, 61% BC-BNP, 12% BC-BNP, 1% Asia $24 M LATAM Quidel, 5% Quidel
Slide 86: Revenue Graphs: Growth Drivers
Revenue Graphs: Growth Drivers Revenues ( x $000) $250,000 The legacy Quidel business has grown by 11% since 2010 $200,000 11% CAGR $150,000 $100,000 (excludes Cardiac Immunoassay) $50,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 Revenues ( x $000) Growth by Revenue Category Rapid Immunoassay 13%
Slide 87: We Continue to Monitor our Expenses Diligently
We Continue to Monitor our Expenses Diligently and Manage the Business Prudently as We Remain Dedicated to Growing the Top and Bottom Line. Annual Investment: R&D Annual Investment: S&M (in $ million, percentage of sales in white) (in $ million, percentage of sales in white) $50-$52 $120.0 90% 35% $
Slide 88: To Date, We Have Significantly Reduced our Debt Structure
To Date, We Have Significantly Reduced our Debt Structure Transaction Date Current Debt March 31, 2018 Actions October 6, 2017 Re-paid $70 million through Convertible Bond Debt $167 million $97 million convertible bond exchange. Paid $100 million from Term Loan Debt $245 million $143 million $149 mi
Slide 89: Our Future Look for Maximizing Shareholder Value
Our Future Look for Maximizing Shareholder Value Achieve high-single digits in annual revenue growth through new product introductions Invest in the development and commercialization of new products driving gross margins to 65% Leverage operational efficiency driving EBITDA margins to 35% Maximize c
Slide 90: Revenue Growth is Critical to Maximizing Shareholder Value
Revenue Growth is Critical to Maximizing Shareholder Value Aspirational FY Revenue Target - $1 Billion Organic Growth Assumptions Quidel Organic Growth M&A • Market expansion for Sofia, Solana $1,200 • Development of new products on existing platforms $1,000 • Launch of Savanna M&A $150-$250M $800 $
Slide 91: Our M&A Strategy
Our M&A Strategy Use cash on hand to pay down debt and pursue inorganic opportunities to diversify and augment the non-respiratory part of the business What we’re looking for… Targets range New technology Products that reduce Firms that can Accretive within from tuck-ins up that accelerates the seas
Slide 92: Our Goals for 2018
Our Goals for 2018 Grow legacy QDEL business Establish Baseline Cardiac Integrate at least 95% by 10% or greater Revenue of $250 million of Triage & BNP Businesses Unlock $10 million in annual EBITDA at 32% or greater Achieve leverage ratio equal to run-rate synergies for Full Year 2018 or under 1.5
Slide 93: We are Expecting Strong Financial Performance in 2018
We are Expecting Strong Financial Performance in 2018 2018 LT Growth Revenue Up to $520M +7% Gross Margin 58% - 60% +10% EBITDA 32% - 34% +15% Free Cash Flow $45M - $55M +15% 93 Internal Company estimates. Actual results could differ. Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 94: Free Cash Flow
Free Cash Flow Infrastructure investments 15% FCF CAGR and productivity improvements >$100M Ongoing manufacturing maintenance $50M Instrument purchases Cash taxes estimated 2018 2023 at the tax provision dollars CapEx $30M Abbott $40M Ongoing Abbott annual Annual payments of $48M Abbott $48M $40M Pa
Slide 95: Financial Appendix
Financial Appendix 95 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 96: Since 2010, We've Committed over $850 Million in Capital
Since 2010, We’ve Committed over $850 million in Capital to Acquire New Capabilities and Technologies in Pursuit of Outside Opportunities that Complement Growth and Diversify Revenue Recent Capital Structure History Target/Action Time Period Rationale Paid approx. $130 million for $45 million annual
Slide 97: Quidel Financial Overview
Quidel Financial Overview Revenue Adjusted EBITDA(1) (in $ million, percent gross margin in white) (adjusted, in $ million) $300 80% $90.0 $277.7 $80.0 $76.6 75% $250 $70.0 70% $196.1 $191.6 $200 $184.2 $60.0 $177.3 65% 60% $50.0 59% $40.9 $150 58% 60% 56% 56% $40.0 $33.0 55% $27.9 $27.3 $100 $30.0
Slide 98: Q&A
Q&A
Slide 99: Appendix
APPENDIX
Slide 100: A Blended History of Quidel and Triage
A Blended History of Quidel and Triage Alere Alere Triage Triage FDA TOX TOX clears Panel Panel Alere first current 1979 1989 Alere Triage 1999 2001 iteration 2005 iteration Triage Meter cleared Alere Triage cleared Quidel Cardiac FDA Quidel’s Cardiac Alere Quidel Panel Alere Triage Panel HS Triage
Slide 101: The New Quidel Serves the Diagnostic Needs of Customers Across the Globe
The New Quidel Serves the Diagnostic Needs of Customers Across the Globe 5 1,200 25 Manufacturing and Employees Worldwide Projects Supported R&D facilities By 90 R&D Employees 100 75 90+ Sales Representatives Employees Focused on Countries Covered in the U.S. and Canada International Commercial by o
Slide 102: Our Guiding Principles
Our Guiding Principles We grow by introducing products to the market that have at least two of the following attributes: Quidel develops, manufactures, and Improved Accuracy Lower Cost sells diagnostic solutions across Easier to Use a broad continuum. Faster Turn Around Time • More Efficient Workflo
Slide 103: Our Core Values Are a Competitive Advantage
Our Core Values Are a Competitive Advantage We thrive as an organization by being: Customer Driven Focused on Execution New Product Oriented Committed to the customer – both internal Execution means things done well, To be successful and relevant in our industry, and external. Keys to customer satis
Slide 104: Quidel's Management Team has a Long History of Achievement
Quidel’s Management Team has a Long History of Achievement in Diagnostics, as well as a 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
Slide 105: Quidel's Management Team has a Long History of Achievement
Quidel’s Management Team has a Long History of Achievement in Diagnostics, as well as a 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 a
Slide 106: Our Innovative New Products are Designed to Meet Customer Needs
Our Innovative New Products are Designed to Meet the Various Needs of the Customer in Any POC Setting Rapid Immunoassay Cardiac Immunoassay FDA–Cleared, CLIA–Waived FDA–Cleared, CLIA–Waived FDA–Cleared Sofia® Immunoassay platform is Sofia® 2, at a fraction of the cost Triage® MeterPro® is our cost t
Slide 107: Our Innovative New Products are Designed to Meet Customer Needs
Our Innovative New Products are Designed to Meet the Various Needs of the Customer in Any POC Setting Molecular FDA–Cleared, FDA–Cleared, FDA–Cleared, In Development Mod–Complex Mod–Complex Highly–Complex AmpliVue, a non-instrumented, Solana, our first instrumented Lyra, our Real-time molecular Sava
Slide 108: Quidel has a History of Solid Revenue Growth
Quidel has a History of Solid Revenue Growth Revenues ( x $000) $250,000 11% CAGR $200,000 $150,000 $100,000 $50,000 (excludes Cardiac Immunoassay) $0 2010 2011 2012 2013 2014 2015 2016 2017 108 Quidel full year revenues (2010-2017), excludes acquired Cardiac (Triage and Beckman BNP Businesses) Copy
Slide 109: Our R&D and Regulatory Expertise is What Fuels Growth
Our R&D and Regulatory Expertise is What Fuels Growth Since 2011, Quidel has submitted over 30 510(k) packages resulting in over 25 FDA clearances and expanded product claims, 6 CLIA - waiver designations and numerous product introductions, contributing $95M in annual revenues1 FDA-cleared Products
Slide 110: Triage Products Comprise Quidel's Cardiac Revenue Category
Triage products comprise Quidel’s Cardiac revenue category Quidel's Triage system of tests comprises a comprehensive test menu that provides the diagnostic answers to make rapid, cost-effective treatment decisions at the point-of-care (POC). Quidel provides a diverse immunoassay menu in a variety of
Slide 111: What is an Immunoassay?
What is an Immunoassay? These assays are highly adaptable and can be applied to many formats depending on the needs of the end user. • The principle component of an immunoassay designed to detect a specific analyte, such as influenza An immunoassay is a nucleoprotein, are the antibodies that have be
Slide 112: What are Fluorescent Immunoassays?
What are Fluorescent Immunoassays? The advantages of a Fluorescent detection system have been known for many years • Sensitivity detection of the analyte Fluorescent • Simplified reagents and simpler assay designs • Several breakthroughs have occurred over the past few years that have enabled the im
Slide 113: What are Molecular Tests?
What are Molecular Tests? Quidel Molecular Tests involve the detection and/or analysis of nucleic acid molecules (DNA/RNA) to provide clinical information. These products extend Quidel’s continuum of diagnostic choices from rapid immunoassays to confirmatory nucleic acid testing. Quidel has three de
Slide 114: Why Use Molecular Assays?
Why Use Molecular Assays? + - Advantages Disadvantages • High Sensitivity/Specificity • Complexity • Earlier detection of infections • Cost • Quantification • Extensive training may be required • Species differentiation • May require cross contamination provisions • Strain identification • Standardi
Slide 115: Molecular Diagnostic Tests Involve a 3-Step Process
Molecular Diagnostic Tests Involve a 3-Step Process Patient Test Sample Sample Prep Amplification Detection Result Sequence specific Lysis and/or Extraction Detection of the amplified target amplification of target and concentration by fluorescent probes, turbidity, of nucleic acids Can be done by i
Slide 116: Polymerase Chain Reaction (PCR)
Polymerase Chain Reaction (PCR): the Grandfather of Amplification PCR: Polymerase Chain Reaction 30 – 40 cycles of 3 steps 1 Denaturation 2 Annealing 3 Extension 116 Copyright © 2018 Quidel Corporation. All rights reserved.
Slide 117: Molecular Diagnostic Isothermal HDA Technology
Molecular Diagnostic Isothermal HDA Technology Has Significant Advantages for Point-Of-Care Applications Mechanism of Helicase-Dependent Amplification (HDA) • HDA technology is the science behind Quidel’s Solana® and AmpliVue® molecular products • Developed in-house by BioHelix scientists; more than
Slide 118: Some Considerations When Evaluating Molecular Platforms
Some Considerations When Evaluating Molecular Platforms Performance Sensitivity & Specificity > Comparison to culture or other MDx? Workflow • Hands on time, total number of steps, • Specimen compatibility batching or on-demand • How will QC and data be managed • Space requirements Throughput • Anti
Slide 119: CLIA-Waived Influenza Tests
CLIA-Waived Influenza tests List of Available CLIA-Waived Rapid Flu Tests Available CLIA-Waived, Antigen-Based Rapid Flu Tests (6) • Alere BinaxNOW Influenza A&B Card 2 (Reader) • BD Veritor System for Rapid Detection of Flu A+B (Reader) • Princeton Biomeditech BioSign Flu A+B (Known Distributors: L