OraSure Receives $205 Million Procurement Contract for InteliSwab™ from the Defense Logistics Agency to Supply Over-the-Counter (OTC) Kits as Part of National Pandemic Response

Rhea-AI Summary

OraSure Technologies (NASDAQ: OSUR) announced a $205 million procurement contract with the Defense Logistics Agency for the InteliSwab™ COVID-19 Rapid Test, aimed at over-the-counter use. This contract will supply tests to approximately 25,000 U.S. sites from October 2021 to September 2022, funded by the federal government. InteliSwab™ offers a simple self-collection method and provides results in 30 minutes without the need for instruments. The company anticipates significant manufacturing and operating expenses related to this contract and expects the majority of revenue to be recognized in 2022.

Positive

• Contract awarded for InteliSwab™ COVID-19 Rapid Test valued at $205 million.
• Supply to 25,000 U.S. sites, enhancing testing access amid the pandemic.
• InteliSwab™ offers a simple, efficient testing method with quick results.

Negative

• Significant incremental manufacturing and operating expenses expected in H2 of fiscal 2021.
• Preponderance of revenue from the contract expected in calendar year 2022, indicating delayed revenue recognition.

BETHLEHEM, Pa., Sept. 20, 2021 (GLOBE NEWSWIRE) -- OraSure Technologies, Inc. (NASDAQ: OSUR), a global leader in point-of-care and home diagnostic testing and sample collection technologies, announced today that the Defense Logistics Agency has awarded the Company a procurement contract for its InteliSwab™ COVID-19 Rapid Test for over-the-counter use, which the Defense Logistics Agency estimated to have a value of $205 million. Under the terms of the contract, OraSure will provide its InteliSwab™ COVID-19 Rapid Test to up to 25,000 sites throughout the United States and the tests will be funded by the U.S. federal government. The contract will run from October 2021 through September 2022.

“We are exceptionally proud to work with the Defense Logistics Agency and the U.S. federal government to be part of the nation’s pandemic response. We strongly believe testing will play a critical role in controlling the recent outbreak of the Delta variant and help to prevent future outbreaks. We believe widespread testing will allow Americans to return to work and school safely, as well as save lives and livelihoods,” said OraSure President and CEO Stephen Tang, Ph.D. “InteliSwab™ is uniquely suited to fulfill this mission as it was designed to be one of the simplest rapid antigen tests. Its intuitive nature makes it ideal for use in underserved communities and consumer testing settings throughout the U.S.”

InteliSwab™ is a simple “swab, swirl, see” test that uses an integrated swab to self-collect a sample from the lower nostrils. The result appears right on the test stick within 30 minutes, with no instruments, batteries, smartphone or laboratory analysis needed. It has three Emergency Use Authorizations from the Food and Drug Administration for professional point-of-care use, prescription (Rx) home use, and over-the-counter (OTC) use.

As the Company ramps to meet the requirements in this contract, it anticipates having significant incremental manufacturing and operating expenses in the second half of fiscal year 2021. Additionally, given the volume ramp implied in the contract, the Company expects the preponderance of revenue associated with the contract to come in calendar year 2022.

Development of the InteliSwab™ COVID-19 Rapid Test has been funded in whole or in part with Federal funds from the Department of Health and Human Services; Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority, Division of Research Innovation and Ventures under Contract No. 75A50120C00061.

About InteliSwab™
OraSure has received Emergency Use Authorizations (EUA) from the U.S. Food and Drug Administration (FDA) for its InteliSwab™ COVID-19 rapid tests. The FDA has authorized the InteliSwab™ COVID-19 Rapid Test for Over-the-Counter (OTC) use without a prescription. FDA has also authorized the InteliSwab™ COVID-19 Rapid Test Pro for professional use in point of care (POC) CLIA-waived settings, and InteliSwab™ COVID-19 Rapid Test Rx for Prescription Home Use. These remarkably simple COVID-19 lateral flow tests use samples self-collected from the lower nostrils. InteliSwab™’s unique design incorporates a built-in swab fully integrated into the test stick. After users swab their lower nostrils, the test stick is swirled in a pre-measured buffer solution, and the result appears right on the test stick within 30 minutes, with no instruments, batteries, smartphone or laboratory analysis needed to see the result. With less than one minute of “hands-on time,” it is as simple as Swab, Swirl, and See.

This product has not been FDA cleared or approved; but authorized by the FDA under an EUA; This product has been authorized only for the detection of proteins from SARS-CoV-2, not for any other viruses or pathogens; and, This product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb- 3(b)(1), unless the declaration is terminated or authorization is revoked sooner.

OraSure’s Response to COVID-19
OraSure is leveraging its expertise in infectious disease testing and molecular sample collection with EUAs for rapid antigen self testing and molecular sample collection for PCR-based tests. The Company’s portfolio of COVID-19 tests and collection kits all feature easy, convenient, pain-free self-collection, and help increase access to testing, while alleviating the burden on the healthcare system and minimizing exposure risks.

About OraSure Technologies
OraSure Technologies empowers the global community to improve health and wellness by providing access to accurate, essential information. OraSure, together with its wholly-owned subsidiaries, DNA Genotek, Diversigen, and Novosanis, provides its customers with end-to-end solutions that encompass tools, services and diagnostics. The OraSure family of companies is a leader in the development, manufacture, and distribution of rapid diagnostic tests, sample collection and stabilization devices, and molecular services solutions designed to discover and detect critical medical conditions. OraSure’s portfolio of products is sold globally to clinical laboratories, hospitals, physician’s offices, clinics, public health and community-based organizations, research institutions, government agencies, pharma, commercial entities and direct to consumers. For more information on OraSure Technologies, please visit www.orasure.com.

Important Information
This press release contains certain forward-looking statements, including with respect to expected revenues, products, product development activities, regulatory submissions and authorizations and other matters. Forward-looking statements are not guarantees of future performance or results. Known and unknown factors that could cause actual performance or results to be materially different from those expressed or implied in these statements include, but are not limited to: the actual value of the procurement contract with the Defense Logistics Agency may be less than or greater than the $205 million value estimated by the Defense Logistics Agency; ability of the company to manufacture sufficient InteliSwab™ COVID-19 rapid tests, ability to successfully manage and integrate acquisitions of other companies in a manner that complements or leverages our existing business, or otherwise expands or enhances our portfolio of products and our end-to-end service offerings, and the diversion of management’s attention from our ongoing business and regular business responsibilities to effect such integration; the expected economic benefits of acquisitions (and increased returns for our stockholders), including that the anticipated synergies, revenue enhancement strategies and other benefits from the acquisitions may not be fully realized or may take longer to realize than expected and our actual integration costs may exceed our estimates; impact of increased or different risks arising from the acquisition of companies located in foreign countries; ability to market and sell products, whether through our internal, direct sales force or third parties; impact of significant customer concentration in the genomics business; failure of distributors or other customers to meet purchase forecasts, historic purchase levels or minimum purchase requirements for our products; ability to manufacture products in accordance with applicable specifications, performance standards and quality requirements; ability to obtain, and timing and cost of obtaining, necessary regulatory approvals for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; ability to effectively resolve warning letters, audit observations and other findings or comments from the U.S. Food and Drug Administration (“FDA”) or other regulators; the impact of the novel coronavirus (“COVID-19”) pandemic on our business and our ability to successfully develop new products, validate the expanded use of existing collector products, receive necessary regulatory approvals and authorizations and commercialize such products for COVID-19 testing; changes in relationships, including disputes or disagreements, with strategic partners or other parties and reliance on strategic partners for the performance of critical activities under collaborative arrangements; ability to meet increased demand for the Company’s products; impact of replacing distributors; inventory levels at distributors and other customers; ability of the Company to achieve its financial and strategic objectives and continue to increase its revenues, including the ability to expand international sales; ability to identify, complete, integrate and realize the full benefits of future acquisitions; impact of competitors, competing products and technology changes; reduction or deferral of public funding available to customers; competition from new or better technology or lower cost products; ability to develop, commercialize and market new products; market acceptance of oral fluid or urine testing, collection or other products; market acceptance and uptake of microbiome informatics, microbial genetics technology and related analytics services; changes in market acceptance of products based on product performance or other factors, including changes in testing guidelines, algorithms or other recommendations by the Centers for Disease Control and Prevention (“CDC”) or other agencies; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical products and components; availability of related products produced by third parties or products required for use of our products; impact of contracting with the U.S. government; impact of negative economic conditions; ability to maintain sustained profitability; ability to utilize net operating loss carry forwards or other deferred tax assets; volatility of the Company’s stock price; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; ability to sell products internationally, including the impact of changes in international funding sources and testing algorithms; adverse movements in foreign currency exchange rates; loss or impairment of sources of capital; ability to attract and retain qualified personnel; exposure to product liability and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; and general political, business and economic conditions. These and other factors that could affect our results are discussed more fully in our SEC filings, including our registration statements, Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Reports on Form 10-Q, and other filings with the SEC. Although forward-looking statements help to provide information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are made as of the date of this press release and OraSure Technologies undertakes no duty to update these statements.

Investor Contact: Scott Gleason Interim CFO, SVP Investor Relations & Corp. Communications 484-425-0588 sgleason@orasure.com

Media Contact: Amy Koch Sr. Mgr. Corporate Communications 484-523-1815 media@orasure.com

FAQ

What is the contract value awarded to OraSure Technologies by the Defense Logistics Agency?

The contract value is estimated at $205 million for the InteliSwab™ COVID-19 Rapid Test.

How many sites will receive the InteliSwab™ COVID-19 Rapid Test?

Up to 25,000 sites throughout the United States will receive the tests.

What is the duration of the contract awarded to OraSure for the COVID-19 tests?

The contract will run from October 2021 through September 2022.

When does OraSure expect to recognize significant revenue from the Defense Logistics Agency contract?

OraSure expects to recognize the majority of revenue from this contract in calendar year 2022.