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SAN DIEGO - QuidelOrtho Corporation (NASDAQ:QDEL), a leading diagnostics company with a market capitalization of $2.05 billion, today announced a strategic shift in its molecular diagnostics approach, intending to acquire LEX Diagnostics post-FDA clearance. This move is coupled with the discontinuation of its Savanna platform development, signaling a realignment of its product portfolio. According to InvestingPro analysis, the company currently appears undervalued despite trading challenges, with analysts maintaining a moderate buy consensus.
QuidelOrtho initially invested in LEX Diagnostics in December 2023, securing an exclusive option to acquire the company subject to FDA approval. LEX Diagnostics is preparing to submit its applications for 510(k) clearance and CLIA waiver to the FDA, with expectations of approval in late 2025 or early 2026. This strategic move comes as the company manages a significant debt burden, with InvestingPro data showing a debt-to-equity ratio of 0.9.
LEX Diagnostics specializes in molecular diagnostics products that promise to deliver clinical insights rapidly at the point of care. Its thermal cycling technology is designed to provide quick and sensitive results, capable of reporting positive outcomes within six minutes for Flu A, Flu B, and COVID-19, and negative results in approximately ten minutes. The integration of this technology into point-of-care settings aims to offer PCR-level sensitivity at competitive pricing.
Brian J. Blaser, President and CEO of QuidelOrtho, emphasized the acquisition’s potential to enhance the company’s position in the fast-growing point-of-care molecular diagnostics market. Blaser highlighted that LEX Diagnostics’ platform provides performance advantages and aligns well with QuidelOrtho’s growth opportunities.
Regarding the Savanna platform, QuidelOrtho has decided to halt its development due to several factors, including recent clinical trial outcomes. The company plans to work with customers and partners to ensure a smooth transition.
QuidelOrtho reaffirmed its full-year 2025 financial guidance, maintaining its outlook based on the current business climate. While the company reported losses in the last twelve months, InvestingPro analysts project a return to profitability this year, with an EPS forecast of $2.41 for 2025. Detailed assumptions underpinning this guidance can be found in the company’s first-quarter 2025 financial results presentation. Get access to 12 more exclusive InvestingPro Tips and comprehensive analysis with a subscription to InvestingPro.
A conference call to discuss these strategic updates is scheduled for today at 5:00 p.m. ET. Participants can access the call through the Investor Relations section of QuidelOrtho’s website or by phone.
This announcement is based on a press release statement from QuidelOrtho Corporation. The discussed LEX Diagnostics product is currently in development and has not yet received FDA clearance or approval.
In other recent news, QuidelOrtho reported its financial results for the first quarter of 2025, showcasing a robust performance. The company achieved an adjusted earnings per share (EPS) of $0.74, surpassing the forecasted $0.61, which marks a 68% increase from the previous year. Revenue for the quarter was $693 million, slightly below the expected $694.43 million. Despite this minor revenue shortfall, the company’s strong growth in molecular diagnostics and respiratory segments, along with significant cost savings initiatives, contributed to its positive earnings surprise. In another development, Jefferies upgraded Quidel Corporation’s stock rating from Hold to Buy, setting a price target of $44.00. This decision was influenced by Quidel’s improved EBITDA margins and strategic initiatives under CEO Brian Blaser’s leadership. The company has outlined plans to mitigate tariff exposure and expects robust growth in China. These recent developments indicate a favorable outlook for QuidelOrtho, with expectations of continued growth and strategic execution in the coming years.
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