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Quidel Corporation Approval of AmpliVue C. Difficile Comes on Schedule and Demonstrates Ability to Bring Products to Market

Earlier today, Quidel announced FDA clearance for the sale of the AmpliVue C. difficile assay. The C. difficile assay is the company’s first assay to gain approval on its AmpliVue platform, which uses a unique single-use handheld detection instrument. The timing of this approval was as expected and even with a full year of revenues ahead, we are not anticipating a large financial impact in 2013. But this is another example of the company’s singles and doubles mentality when it comes to new products and also demonstrates the company’s ability to get products through the FDA. Given the reliance on other product
launches, this is critical to the future of the company. Going forward, the focus will start to turn to commercialization success and we should get a view on this starting in January as we get an update on the SOFIA flu a/b launch.

Discussion

The C. difficile assay is the company’s first assay developed in the handheld AmpliVue format. It received CE marking in March 2012 and is now for sale in Europe and the United States. AmpliVue is the first-ever handheld device capable of reading a molecular test and can be run in 75 minutes of total time (though there are several steps along the way that must be completed to get to the handheld detection step). In addition, there is no expensive capital equipment necessary to purchase, as it can be run with technology already available in most labs today.

The product will seemingly go head to head with the illumigene platform from Meridian Bioscience (VIVO $20.30; Market Perform) in targeting lower volume settings with little to no molecular technology already in place. In some cases, we can see how it would go up against easier-to-use systems appropriate for the lower volume market such as the Cepheid (CPHD $33.86; Outperform) GeneXpert or the Great Basin Portrait assay. The Meridian and Cepheid instruments already have a very strong presence in the market and use a more traditional design that may give comfort to users of the technology. But the key competitor here seems to be Meridian and both companies have passionate talking points as to why they will be successful in head-to-head comparisons. In our view, as long as they both develop their menus (which Meridian has already done and Quidel is still working on), we believe both can have a successful product in the space. As a reference point, we estimate the illumigene C. difficile product, which is now in its third year postapproval, will account for about $29 million in 2013 revenues at Meridian. While we do not expect the AmpliVue product to have the same level of commercial success as Meridian had (it was already the leader in rapid C. difficile testing and has a testing menu already), this at least frames the opportunity in what has become an increasingly competitive space for molecular infectious disease testing.

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