After fall in demand for COVID-19 tests, San Diego’s QuidelOrtho to lay off 500 workers – San Diego Union-Tribune
After fall in demand for COVID-19 tests, San Diego’s QuidelOrtho to lay off 500 workers – San Diego Union-Tribune
Author: Natallie Rocha
Published on: 2024-05-09 20:37:43
Source: Technology – San Diego Union-Tribune
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QuidelOrtho, a local diagnostic company that makes at-home COVID-19 test kits, has a new CEO and announced Wednesday that it will cut at least 5 percent of its workforce to save money.
The San Diego-based biotech has struggled to find its financial footing after demand for its COVID-19 test kits deflated and the economy stagnated following a pandemic boom.
Brian J. Blaser, a former executive at pharmaceutical giant Abbott, was introduced this week as QuidelOrtho’s new president and chief executive. He replaces former CEO Douglas Bryant, who was terminated in February after leading the company for nearly 15 years.
Blaser has more than two decades of experience in the in-vitro diagnostics sector, most recently as the executive vice president of Diagnostic Products of Abbott Laboratories. Prior to Abbott, he also led the clinical diagnostics division at Johnson & Johnson and worked at Eastman Kodak and General Motors.
He will receive a base salary of $1 million, equity awards and an annual target cash bonus of $1.25 million to $1.5 million, according to the company’s filing with the SEC. The company also granted Blaser a signing bonus of $3 million of stock awards that are subject to vesting terms. He will also be given a travel and housing allowance through December.
Three days into the job, Blaser joined QuidelOrtho executives on a first-quarter earnings call with investors Wednesday. He expressed his commitment to the business and shared why he wanted to join QuidelOrtho at this crucial moment.
“QuidelOrtho touches every stage of the patient care spectrum, including prevention, diagnosis, patient care and monitoring,” Blaser said during the call. “This business has all of the underlying capabilities required to drive exceptional growth and profitability in a large and expanding market. There is work to do and I am excited about steering the company so it can achieve its full potential.”
In the short term, Blaser said his focus is on “customer satisfaction and patient care, improving profitability and cash flow, while reducing our debt level, and positioning ourselves to compete effectively in the highly competitive diagnostics market.”
Blaser and QuidelOrtho’s leadership team reassured investors throughout the call that they are committed to making necessary cost cutting measures to strengthen the business.
The company said it will reduce its headcount by 5 to 6 percent, or approximately 500 people, for a savings of $100 million annually. QuidelOrtho had 7,100 employees worldwide, with 4,200 workers based in the United States as of Dec. 31.
San Diego biotech firm QuidelOrtho fires longtime CEOJoseph Busky, chief financial officer of QuidelOrtho, said the layoffs should be completed by mid-year. He said most of these positions were higher level management roles, which comprised roughly 10 to 12 percent of the organization’s total payroll.
QuidelOrtho reported a net loss of $1.7 billion during the first quarter compared with a profit of $48.8 million in the same period a year ago. Revenue for the quarter was $711 million, down 16 percent from a year ago. The company attributed the decline primarily to a drop in orders for COVID-19 test kits.
In May 2020, QuidelOrtho received the first emergency use authorization from the U.S. Food and Drug Administration for its at-home COVID-19 antigen test. The company’s revenue initially jumped but then later slowed as the pandemic ended and demand for tests fell.
Respiratory revenue, which includes COVID-19-related products, accounted for 19 percent of the company’s total revenue this quarter. Last year during the same period, it accounted for about one-third of QuidelOrtho’s total revenue.
COVID-19-related government orders also dropped with QuidelOrtho receiving $7 million for the quarter versus $143 million a year ago.
QuidelOrtho said it expects its respiratory and COVID-19-related revenue to stay at or below its previous projections for the year. However, the company did not provide investors with an overall financial guidance for the year, citing the transition to its new CEO.
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