Quidel at Jefferies Conference: Strategic Shift and Growth Plans

On Thursday, 05 June 2025, Quidel Corporation (NASDAQ:QDEL) presented its strategic direction at the Jefferies Global Healthcare Conference 2025. The company outlined its focus on profitability and efficiency, highlighting both opportunities and challenges. The strategic pivot to the Lex platform and efforts in debt reduction were central themes, with emphasis on maintaining growth in competitive markets like China.

Key Takeaways

• Quidel is shifting focus from the Savannah platform to the Lex platform due to technical challenges.
• The company aims to reduce its leverage ratio to between 2.5 and 3.5 and plans to refinance debt in the second half of the year.
• Strong Q1 performance with a 7% growth in the Core Lab segment.
• Free cash flow conversion goal is 50% of adjusted EBITDA by mid-2027.
• Emphasis on maintaining competitive edge in China through local manufacturing and new product launches.

Financial Results

• Quidel reported a 7% growth in the Core Lab segment for Q1 2024.
• The company achieved $100 million in cost reductions by the end of Q2, primarily from a 9% reduction in staffing.
• Tariff impacts for 2025 are projected at $30-40 million, with mitigation strategies in place.
• A target leverage ratio of 2.5 to 3.5 is set, with current leverage at 3.4 turns.

Operational Updates

• The strategic shift to the Lex platform is due to issues with the RSV component of the Savannah platform.
• The Lex platform offers faster results and competitive pricing, providing a market advantage.
• Quidel is managing tariff impacts in China through surcharges and staffing reductions, and resumed shipping without tariffs in May.
• Organizational restructuring includes a flattened structure to enhance decision-making and communication.

Future Outlook

• Quidel is monitoring respiratory season trends, with an eye on potential SARS spikes.
• The company is targeting a mid to high 20s adjusted EBITDA profile by mid-2027 through procurement initiatives.
• Debt reduction remains a priority, with plans to refinance debt in Q3 2024.
• Quidel is open to small acquisitions and partnerships, with larger opportunities considered post leverage reduction.

Q&A Highlights

• Tariff mitigation includes surcharges and expense reductions.
• The company expects continued VBP exemption in China for its dry slide technology.
• Growth in China will be supported by local manufacturing and new product launches.
• Quidel maintains a 50% reagent rental rate among its global customer base.
• Inventory reduction is a focus to improve working capital.

For a more detailed understanding, readers are encouraged to refer to the full conference call transcript.

Full transcript - Jefferies Global Healthcare Conference 2025:

Tycho Peterson, Analyst, Jefferies: Good morning. We’re gonna get started. I’m Tycho Peterson from the life science team at Jefferies. It’s my pleasure to introduce Quidel Ortho. We’ve got Brian and Joe with us today.

Welcome to you both. Got a lot to talk about. You guys have been busy, I think maybe we’ll start, not surprisingly, with the Savannah announcement. It couldn’t have been easy. You’ve been working on it for a decade.

Maybe just talk a little bit about the decision making process, of what went behind that decision, what you saw in the RVP four trial and any other factors that played into it?

Brian Blaser, CEO, Quidel Ortho: Yeah. I think it is something that the company’s been working on for a long time. And, you know, coming me coming into the business a year ago and looking at the technology, really felt like we we needed to to to try to make this this work. And there’s really nothing in the technology underlying technology that I thought would be a a barrier to to our being successful with respiratory panel. In parallel, we had acquired this option with Lex, and we’re really evaluating the the two platforms in in parallel.

And, you know, fortunately, our clinical trial data kinda came together at the same time, and we were able to do kind of a side by side comparison. And, you know, the as as Jonathan talked about on on our call, the the RSV component of the Savannah product was the most problematic. I would say it was in kind of a gray zone for approvability and it just didn’t meet our standards. So it kind of started with that. But then we really also, you know, took a hard look at, okay, the the the technical risk here associated with bringing large syndromic panels to the market given the the history of the the platform, the cost associated with doing that and the time associated with doing that.

And then looking at the Lex product, which is has very strong clinical data, much closer to broad commercialization. Just really doing the calculus on that, it became clear that Lex was our going to be our platform moving forward. So it was a tough decision, but I think we’re very excited about the opportunity we have here with Lex, the differentiation I think it brings to the marketplace and the future for that product.

Tycho Peterson, Analyst, Jefferies: And maybe just a minute on the financial implications. I think previously you’d said it was roughly 200 basis point drag on margins, Savannah, and that was implies about $50,000,000 in costs. I think on the call the other day, you said it’s $25,000,000 in run rate savings, dollars 11,000,000 in the back half of this year. Can you maybe help us just square all that away?

Joe Busky, CFO, Quidel Ortho: Yeah. If we were to shut down Savannah development and not replace it with anything, it would have been closer to a full 200 basis point of potential improvement to the guidance. But with the Lex replacement, there’s definitely going to be some reinvestment that’s going to happen. And we’re also still selling Savannah and we’re still selling Savannah in EMEA and in The U. S.

And there’s a dilutive impact to that. So that impact also pulls down that 200 basis point impact if we had shut down Savannah without any replacement.

Tycho Peterson, Analyst, Jefferies: And you touched a little bit on the strengths of the Lex platform. And you’ve got history there having kind of made an investment previously. Maybe just walk through the history of kind of connecting with the company and what you think kind of the long term roadmap looks like here for Lex?

Brian Blaser, CEO, Quidel Ortho: Yes, think the product is clearly differentiated in terms of speed and cost and certainly ease of use. You’ve got a negative or I’m sorry, positive result in six minutes, negative in ten minutes. You know, if if you look at other competitive platforms and you add in the hands on time associated with, you know, preparing the sample and the the cartridges, etcetera, We have a real speed advantage relative to other platforms that are out there. And I think at a cost level, we’re going to be able to offer just based on the way this product is designed and will be manufactured, we’ll have a real opportunity to provide very competitive pricing and there are other again features of this platform. I won’t single out any of our competitors here today, but I think there opportunities for us to differentiate really kind of across the space with the platform.

Tycho Peterson, Analyst, Jefferies: Maybe we could just step back a little bit, Brian, and reflect a little bit on your time in the CEO seat and the journey kind of you’ve been on, the company has been on and the path to kind of being a high margin durable mid single digit growth business. Talk a little bit about some of the lessons learned from some of the prior challenges, where you see the opportunities ahead and is there more portfolio restructuring to come?

Brian Blaser, CEO, Quidel Ortho: Yes. Well, I think we are reshaping the business and so there is there will be more to come for sure as we think about the business in the future. But coming into the business a year ago, what I found was a really highly motivated team, but quite frankly lacking, I think, We’re spread very thin across a broad number of initiatives, and I would say especially so in the R and D area where we were working on a lot of different priorities and a lot of things that weren’t going to have sort of immediate impact on the business. And so we the first thing that we did was we got very focused about, okay, what do we need to do here? We need to get serious about and very focused on our entryexpansion in molecular diagnostics for Savannah, now Lex pivoting to Lex.

We had kind of let the cost structure get away from us. My assessment of the cost structure and along with Joe, we’ve been in diagnostics for a long time. We don’t see any reason why this business shouldn’t have a mid-20s adjusted EBITDA profile. And so we made that a priority along with cash flow improvement, return on invested capital and getting all of our initiatives first around staffing, but then deeper with procurement, all of our indirect costs and really getting a focus on getting that pathway toward the mid to high 20s EBITDA target. So we got that underway.

And then there’s some things that just had to be taken care of with the menu of our existing platforms where we have some competitive areas that we need to strengthen as well as some life cycle management. So I think bringing just some focus to the organization has really paid off. I’m all about focus and that is a lesson that I think I bring to the business. And then the other piece of it was is talent. We clearly have had some challenges with R and D productivity.

I think that’s a function as much of process as it is great having great people in the organization. So we brought in Jonathan Segrist, our new CTO, who’s had a tremendous impact on the business here in the very short time that he’s been on board. We brought in a new CHRO, Lee Baumann, who’s been just a super partner with me and the rest of the leadership team in really kind of evaluating and building the talent and the team underneath our leadership team. So, yeah, I’m happy with the progress that we’ve made over this last year. I think we’ve had a big impact.

It’s been a good year, a very productive year. We’ve got a lot of work in front of us obviously and looking forward to what we’re going to do with the business here moving forward.

Tycho Peterson, Analyst, Jefferies: And maybe can you talk about some of the organizational changes? It’s easier from the outside to track the products, but maybe just talk a little bit about some of the stuff below the surface from an organizational perspective you’re doing.

Brian Blaser, CEO, Quidel Ortho: Yes. Well, one of the things I think one of the things we did, we were a very functionally oriented business. When the two companies came together, I think the mindset was we’re just going to functionalize everything. And we had sort of a hybrid business unit structure. We’ve really organized the business around two business unit leaders, a labs and transfusion medicine leader and our point of care and molecular diagnostics leader.

And then we have regions that are aligned with those leaders and the functions. And our business unit heads are really the kind of what I call the quarterbacks for the organization. And in the process of doing this change, we really flattened the organization significantly, took out a couple of layers that has really sped up, I think, decision making, speed of communication and our interaction as a team. And it’s been very productive. We’re making similar changes at deeper levels in the organization.

I would say that the one thing we’ve been very careful about is not impacting our customer facing people structure in a way that would impact our relationship with customers. That has been a strength of this business for a long time and we’ve been are very sensitive to making sure that we have the right people facing the customer and the right level of service and support at that level as well.

Tycho Peterson, Analyst, Jefferies: Maybe just shifting to the business, coming off a good quarter in particular on Core Lab up seven percent, clinical chem immunoassay doing well. Just talk a little bit about where you’re seeing the strength, how you’re feeling about hospital purchasing given all the kind of uncertainties right now?

Brian Blaser, CEO, Quidel Ortho: Yes. Q1 was strong really across the board. Labs had a very strong quarter, and it was really a function of solid performance across the board. But I would say EMEA, LatAm and our Asia Pacific area outside of China China was solid, but our Asia Pacific area broadly had very strong results kind of across the board. We’ve made some positive leadership changes in the EMEA and LATAM area that I think have been very positive getting our business really focused on those segments where we have competitive differentiation, the right to win and that are very profitable for the business.

And so that’s I think paying off. We also saw a strong growth in our Triage business across the board. We’ve made some adjustments to the cost of that product, making it more attractive. And our high sensitive Troponin offering outside The United States there is performing very, very strong.

Tycho Peterson, Analyst, Jefferies: Is there a particular geography for

Brian Blaser, CEO, Quidel Ortho: comments on Q1, but I think

Tycho Peterson, Analyst, Jefferies: For Troponin, is there a particular geography? Is Asia? Where where are you seeing that strength?

Brian Blaser, CEO, Quidel Ortho: We’re we’re seeing that in in EMEA and LatAm in particular. Okay.

Tycho Peterson, Analyst, Jefferies: And then point of care, you know, obviously, there’s a flu dynamic there, but kind of, you know, even ex that, you know, you’re you’re putting up decent numbers. Maybe talk about the sustainability of that, how you feel about Sofia, the combo test and

Brian Blaser, CEO, Quidel Ortho: Yes, Sofia combo test has been a very durable test for us. It continues to perform very well. I think about 50% of our respiratory testing is done on that platform. We did see we saw a pretty strong flu season. Most of that testing was done on the flu combo test.

We did see softness in the SARS standalone testing, but you would kind of expect that given the dynamic of the season. As we’re kind of looking ahead to the respiratory season, kind of see it playing out like, I guess, an average season, although we’re all waiting to see what will happen here if there will be a summer spike with SARS or not, but keeping a close eye on that.

Tycho Peterson, Analyst, Jefferies: Yes, I mean the 2Q ILI data has kind of tailed off. I mean how do you feel about kind of the near term trends overall in that business?

Brian Blaser, CEO, Quidel Ortho: Yes. So it typically tails off in Q2. It’s usually our softest quarter. The earliest indications will be the wastewater data. And we have heard some news about a new SARS variant that’s circulating in Asia.

We’ll start to monitor the Southern Hemisphere, you know, flu season here very carefully. There’s a pretty good correlation between what happens there and what happens here, but it’s a little too early for us to, you know, kind of kind of see anything developing at this point.

Tycho Peterson, Analyst, Jefferies: How do you guys plan around some of the vaccine developments? I mean, eliminating COVID vaccines going forward. I mean, how do you plan on that for the upcoming season?

Brian Blaser, CEO, Quidel Ortho: Yeah. I don’t know that there’s a direct correlation between vaccine development and testing. I think, you know, when people get ill with something like COVID or flu, you know, docs still wanna know what it is so they can treat it appropriately. So although, you know, the vaccine piece of it may be, you know, a good preventative, it’s not necessarily a good predictor of the season and really doesn’t have a whole lot of impact on on testing.

Tycho Peterson, Analyst, Jefferies: Maybe just shifting to some of the other topical stuff tariffs, I think people were pleasantly surprised this quarter that only a small portion of China shipments were impacted. You’re able to maintain the EBITDA target obviously with much less than expected tariff headwind. Can you maybe just talk about your comfort in that? Have you received any sort of notice of exemption? How do we get comfortable that doesn’t become an issue down the road?

Joe Busky, CFO, Quidel Ortho: So on the Q1 earnings call, we did talk about a tariff impact of 30,000,000 to $40,000,000 for 2025. And that, you know, there’s been some shift in that. I think things have gotten a little bit better since we did that earnings call about a month ago, largely we’re still in that same range of 30,000,000 to $40,000,000 We did actually stop shipping into China post Liberation Day for the month of April to let things settle and give our supply chain team time to figure out what was happening and plan appropriate actions. Since then, but in early May, we did start shipping again into China. And I believe we’ll largely catch up with those shipments in Q2, but probably not fully.

So there probably still will be some what we originally planned for Q2 shipments that will flip into Q3. We are still shipping into China without any tariffs. We do think that based on what we hear from our local team in China who works close with the customs folks there that the lack of tariff seems to be a pretty durable situation at this point. So it doesn’t seem like a high risk for us now, but obviously we’re watching it very closely. The tariff mitigation actions that we’ve taken to offset that 30,000,000 to $40,000,000 are all happening as we speak.

There are surcharges, there are some staffing reductions, there are some other controllable expense reductions that we’re taking. But all that’s happening as planned and I don’t see any issue with that.

Tycho Peterson, Analyst, Jefferies: The other angle we tend to get questions on is just volume based procurement. Obviously a lot of the larger diagnostic companies are kind of feeling some of the brunt of that. You guys have so far avoided that and seems like the dry slide technology will continue to avoid that. How do we get comfort though long term that doesn’t become more of a problem?

Brian Blaser, CEO, Quidel Ortho: Yes. That has been a durable exemption for us here over the long term. I think our near term view is that that will continue. I think the value proposition that we have with the dry slides as well as kind of the waterless systems when you consider the entire offering with immunoassay fits very nicely into the stat lab environment in particular where they oftentimes don’t have a lot of plumbing in their cramp for space, as well as I think it’s supportive of the county hospital initiative that they’re driving to push healthcare closer to patients in China. So I think our product offering in particular has some differentiation that that market values.

And so we’re hopeful that our exemption will continue and we look forward to supporting that strategy more broadly in the country.

Tycho Peterson, Analyst, Jefferies: And then can you maybe just talk about potential growth accelerators within China? 1Q was flat, but you had good growth in Clin Chem. Triage was a little softer. But I think longer term, you talked mid to high single digit growth in China. So what’s the path to kind of get there?

Brian Blaser, CEO, Quidel Ortho: Well, now I think we see the mid to high single. There’s a little bit of noise here in the system with tariffs. But we are looking at a couple of things. We’re going to be localizing some of our immunoassay reagent manufacturing in China. In addition, we’re going to be launching a low volume clinical chemistry analyzer initially for that market, but also other OUS markets toward the end of this year into next year.

I think that will provide some considerable growth opportunity for us there. And then we’re looking at other opportunities for us to participate in the point of care setting there, but it is a very competitive and cost conscious setting in China. So we’ve got some hurdles to overcome there. But yes, I think in the near term we’re just looking to manage through some of this noise and hopefully continue to deliver the durable growth that we’ve experienced in that market up to this point.

Tycho Peterson, Analyst, Jefferies: And where in the portfolio do you see the most local competition?

Brian Blaser, CEO, Quidel Ortho: Well, I would say the most local competition would be you see it everywhere in labs really. I mean, we’re largely a labs business there. So it’s most of our business is clinical chemistry. We have some immunoassay business. Most of the VBP up to this point initially was focused on liquid chemistry and then to a certain extent immunoassay.

We have this exemption, but I would say the competitive environment there has intensified just as a function of that pricing dynamic in total. So we do see that competitive pressure in the labs business there.

Tycho Peterson, Analyst, Jefferies: And then maybe just globally as we think about the competitive dynamics, mean Beckman’s got a new instrument, Roche is pushing out a mass spec to address potentially some of this market. How do you think about competitive dynamics among the big players?

Brian Blaser, CEO, Quidel Ortho: Yes. We continue to have a very compelling portfolio in labs, of course, in the respiratory business. But in labs specifically, we our sweet spot is that low to mid volume segment where we play in important role in IDNs, but a lot many times in this sort of hub and spoke model in that space. And you know, you don’t see a whole lot of competitive pressure. There have been some competitive platforms that have come out here, but, you know, our systems are relatively new, they’re not old.

The lifecycle of these platforms is very long as you know. And so they’re quite competitive in this space and so we’re not really feeling any sort of pressure there. We are starting, however, though, to think about, okay, you do see volume continuing to consolidate into higher levels, how are we going to participate more fully in that and what can we do from a platform standpoint? So we’re starting to put those ideas together now.

Tycho Peterson, Analyst, Jefferies: Are you seeing any change in the interest levels around reagent rental? I mean that’s always been a big part of this market. Are you seeing more customers kind of opt for those types of agreements in this backdrop?

Joe Busky, CFO, Quidel Ortho: Yeah, Tycho, we really haven’t seen a lot of change in those trends in our business. Typically, we see globally is about 50% of our customers will pay cash for an instrument and about 50% will utilize the reagent rental agreement where we keep the asset on our balance sheet and they pay us a surcharge as part of the reagent purchases. And those percentages vary by geography, but globally it’s been pretty consistently fifty-fifty for the past several years. And even with recent economic issues we’re seeing now, we’re still not seeing hospitals or customers, in our case, delaying CapEx purchases. And I think that’s because when you look at the average cost of our instrument versus say the average cost of like a piece of MRI equipment, it’s much, much less.

And I think you see the delays more on those larger capital purchases rather than the purchases that our customers are making of our equipment.

Tycho Peterson, Analyst, Jefferies: Maybe we could just hit on margins and Brian obviously talked about the longer term targets there. You’ve got your cost out initiatives $130,000,000 1 hundred and 50 million but maybe just talk a little bit about progress so far and what are the other levers to kind of get to as you said mid to high 20s I would think over time?

Joe Busky, CFO, Quidel Ortho: Yes, it’s a good question and I think it’s helpful to kind of unpack it a little bit because I know there’s a lot of pieces to it that we’ve talked about on the past several earnings calls. The first piece is the $100,000,000 of cost downs that we executed about a year ago now. And by the time we get to the end of this quarter Q2, we will have seen all the benefit from that 100,000,000 cost out. And that 100,000,000 was mostly made up of staffing reductions where we took down our overall company staff by 9%. So it was a fairly big cut.

And probably should note here that even though we did take out a lot of people from the organization, to Brian’s point earlier, we really tried to stay clear of the commercial organization. We didn’t mess with the frontline salespeople. So there’s really not any impact to our ability to hit those mid single digit growth targets that we’ve talked about on the top line. So that’s the first piece. Second piece is the 30,000,000 to $50,000,000 of in year 2025 savings that we’re executing on.

And that’s mostly going to be indirect procurement type actions. So we were there are some headcount in there, but it’s for the most part indirect procurement. And I would say those projects are are on their way to being fully executed between now and the next several months. We do see that we’re going to achieve those savings this year in 2025. The third piece is the tariff mitigation, which I mentioned earlier.

There’s the tariff mitigation piece and this is a decent amount of staffing and some controllable costs. And again, these actions are all being executed right now and over the next several weeks. So we will see the benefits of that offsetting these the tariffs that are going to impact us in the second half of this year. And then the final piece, which we really haven’t sized yet is the direct procurement initiatives. And these are the initiatives that will lower the cost of our products that we sell to our customers.

And there are a lot of initiatives in flight. These initiatives take longer than the indirect ones because you’re dealing with swapping out suppliers and swapping out sub components and materials in our products in a regulated environment like we are, you want to do that in a very measured careful way. And so those will take longer. So we won’t see those benefits until you get into probably the second half of twenty six until into first half of twenty seven. So when we talk about our margin goals and what we’re trying to get to those mid to high 20s, that’s why they extend out into mid twenty seven because it’s these direct procurement initiatives that will take a little longer.

But they’re in flight and they’re progressing and I feel pretty good that we’re going to get there with those initiatives.

Tycho Peterson, Analyst, Jefferies: How are you navigating those with supply chains moving around, tariffs moving around, There’s a lot of moving pieces there.

Joe Busky, CFO, Quidel Ortho: Would say we have a really talented supply chain team led by our COO. He’s just doing a fantastic job. So it’s a really talented team. There’s a lot going on in that group, would admit, yes.

Tycho Peterson, Analyst, Jefferies: And then maybe just touch on free cash flow. You’ve talked about 50% EBITDA conversion as a target. I think you were 25, 30 percent for this year. And maybe just talk about the path to get there.

Joe Busky, CFO, Quidel Ortho: Yes. So we as a company, we were previously at 50% of adjusted EBITDA conversion. And I really think that’s where we should be as a company. We really should be at 50% or greater adjusted EBITDA conversion to a recurring free cash flow. And as you said, Tycho, we’ll be in the 25% to 30% range this year.

And that’s not where we want to be. But we do have the goal to get to 50% or above. I think the two main levers that we’re pulling to get there are the margin improvement initiatives that we’ve been talking about now for the last ten minutes. And in addition, in the working capital area, there are some opportunities that we can go after in working capital, primarily in the inventory area. For those of you running models on our company, you can see that our days of inventory have gone up over the last few years and that was intentional.

We had a lot of issues back orders and the like coming out of the pandemic. We increased safety stocks and now I think the pendulum may have swung a little too far. And we as a management team believe that we can pull that pendulum back a little bit the other way and we can take some inventory out around the world. So between the inventory reductions, the margin improvement, I believe that we can get to that 50% or greater of adjusted EBITDA conversion on free cash flow along the same lines of the timeline for the margins, so call it mid-twenty seven that we should be able to get there. We’ll make improvement next year and we’ll get to the target in 2027.

Tycho Peterson, Analyst, Jefferies: And can you also just touch on debt covenant flexibility? You’re just 3.4 turns right now. How much flexibility is there? What’s the ceiling around pro form a EBITDA adjustments?

Joe Busky, CFO, Quidel Ortho: Yes. Mean it’s no secret that the delay in the Savannah launch has really caused our leverage ratio to go higher than we want. We don’t want to be above four on this leverage ratio. Our goal is to get it to a range of between two point five and three point five. And I believe that what we’ve said publicly, we believe that by the end of this year we should be have a leverage ratio between 3.54.

And then twenty six will make further progress on bringing that leverage ratio down closer to our target range. The credit agreement as it currently stands allows us to add back pro form a EBITDA adjustments up to 20% of our total EBITDA. So that’s the credit agreement threshold. And that typically translates to about a 0.6 to 0.9 benefit if you will. So in other words, if our leverage ratio is four times on an actual race basis, it’s going to come down to more like somewhere around three, three, three, four likely on a pro form a basis.

So we feel we’re in good shape with our leverage ratio covenants. We are however, as I said on the earnings call a month ago, we are going to refinance the debt in the second half of this year. I think the markets are recovering from Liberation Day. The rates, spreads, the yields are starting to get back to a more what you would say normal level. And I do think that we will have an opportunity to refinance the debt likely sometime in Q3 if the market continues to hold.

Tycho Peterson, Analyst, Jefferies: And then just beyond the pay down, I think you’ve talked about 2.5, three point five turns leverage mid term. What are the capital allocation priorities? Mean how are you thinking about bolt on M and A, more investments in

Joe Busky, CFO, Quidel Ortho: your I’ll start. You can I’m sure we’re going say the same thing. Debt pay downs, as I just said, is the number one capital allocation priority for sure. However, we’re going to continue to invest in the business. We’re going to continue to spend 7% to 8% of revenue in R and D.

We’re going to continue to look at potential M and A, if you will, in a small form, whether it be license agreements, distribution agreements, smaller bolt ons. We’ll continue to look at that. But right now the allocation priority is definitely paying down that debt.

Tycho Peterson, Analyst, Jefferies: Anything you’d add on the M and A stuff?

Brian Blaser, CEO, Quidel Ortho: I think Joe has captured it well. I think as we bring the leverage ratio down, that opens up the opportunity for us to then start thinking about some of these longer term investments in new platforms and maybe larger M and A opportunities. But in the short term, it’s going to be really focused around debt pay down.

Tycho Peterson, Analyst, Jefferies: Got it. Maybe just last one, donor screening, you’ve nearly complete with that exit. How are you positioning immuno hematology going forward for low single digit growth?

Brian Blaser, CEO, Quidel Ortho: Yes. We’re the leading provider in the immunohematology space. We like our position there. Longer term, we’re going to be looking at how we can improve the competitiveness of those platforms. But in the shorter term, really we’re focused on making that a more profitable business for the company and a better contributor to our overall margin performance.

So that will be our focus in the short term.

Tycho Peterson, Analyst, Jefferies: Great. We’ll leave it at that. Thanks.

Joe Busky, CFO, Quidel Ortho: Thank you. Thank you. Thank you.

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