OraSure Technologies' CEO Presents At Deutsche Bank AG Health Care Conference (Transcript)

OraSure Technologies, Inc. (OSUR)

Deutsche Bank AG Health Care Conference Call

May 7, 2012 8:40 am ET


Douglas A. Michels – President and Chief Executive Officer

Ronald H. Spair – Chief Operating Officer and Chief Financial Officer


Unidentified Analyst

Good morning and welcome to the 37 th Annual DB Healthcare Conference. My name is [Robert Karofsky] and I’m with the MedTech team here at DB. Kicking things off this morning we have OraSure Technologies. With us we have CEO, Doug Michels; and CFO, Ron Spair.

Douglas A. Michels

Good morning, everybody, and special thanks to Deutsche Bank for inviting us to speak to you today and to attend this year’s conference. As Rob mentioned, Ron Spair is here with me. Ron is our Chief Financial Officer and Chief Operating Officer and given that today we’re going to be spending a shorter amount of time with the presentation and more time with questions, got to be a great opportunity to have Ron up here taking difficult questions that you might ask.

Before we begin, let me remind you that through this morning’s presentation, we will be talking about the futures forward-looking statements and obviously whenever you are talking about the future, there is uncertainty and so we ask you to refer to the company’s SEC filings 10-K and 10-Q for a more complete description of those factors that might impact future results.

I’m going to start out this morning like I usually do with just a couple of comments on the investment rationale for OraSure Technologies. As many of know, OraSure is an industry leader in the point-of-care, infectious disease and biological sample collection space. Our base products today address in excess of a $600 million global market and we are less than 20% penetrated. So we believe that with our traditional products, we still have quite a bit of room to continue growing this very fine business.

We’ve also been investing very heavily over the last several years into real exciting new opportunities, one of which is the development of a rapid test for hepatitis C. That product is fully developed. We developed it on the very same platform that our market rapid HIV test has been developed and has been very successful.

We believe that the market opportunity here in the United States for rapid hepatitis C test is in excess of $250 million. This test is now FDA approved. It’s the only rapid test for hepatitis C that’s CLIA waived and FDA approved here in the United States and we are in the midst of a launch of that product and I’ll talk a little bit more about that later on in the presentation.

In addition, over the last six or seven years, we’ve been investing in clinical studies which would ultimately lead to FDA approval. Although, our rapid HIV test produced by consumers per se OTC in retail pharmacies and in mass retailers across the United States. We believe the market opportunity for on a self test or HIV sold OTC is an excess of $500 million. We’ve been working on this like I mentioned for quite sometime. We have a very exciting event coming up a week from tomorrow and in Hattiesburg, Marlin where we’re going to present our final clinical data to the Blood Product Advisory Committee and we look forward to having that discussion with them and our hope is that that will ultimately lead to a positive recommendation and ultimate approval of this product and then obviously subsequent commercialization.

Let me make a couple of comments about our market-leading position in rapid HIV testing. This is our current flagship product or a quick advance. It’s a rapid $20 million test for HIV-1 and 2, it is the only FDA approved and clear way of rapid test here in the United States that can be used with both a blood sample and an oral specimen. The product has been FDA approved and clear wave since 2002 and it is the market-leading rapid test here in the United States. We sell the product primarily into hospitals and into the public health systems where we have leading shares and we sell this product directly. So we have a direct sales force that calls on public health, as well as hospitals.

This is just a graphic of the competitive environment here in the United States. There is five other companies that market FDA approved rapid test and what we try to highlight here is the primary reasons why our product has been chosen as the preferred product in those markets in which we currently participate. I mentioned our [testing] has the ability to identify both HIV-1 and HIV-2 the product is clear waved, which is very important and that it enables the product to be used in a physicians office or in a distributed environment like so many public health jurisdictions use the product and as I mentioned it’s the only product that’s approved for use with both on blood specimen and in oral specimen and if that oral application that we’ve conducted our clinical studies on and that we intend to make available OTC assuming FDA approval.

Let me talk a little bit about this because this is an effort that we began back in 2005, when we initially approach the FDA with our thought of taking our professional product and making the very same product available for sale to consumers. We went to an Advisory Committee meeting in November of 2005 and again in March of 2006 and through those meetings there was a decision that indeed the FDA should work with sponsor companies to bring a product like this to market and in the March meeting we agreed with the FDA on the clinical studies protocols that would be executed that would ultimately lead to approval.

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