Welcome to the Quidel Corporation First Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, instructions will be given for the question and answer session. If anyone has difficulty hearing the conference, please press star zero for operator assistance. I'd now like to turn the call over to Mr. Ruben, our guest.I'd now like to turn the call over to Mr. Ruben Argueta, Quidel's Director of Investor Relations. Please go ahead. Thank you, operator. Good afternoon, everyone, and thank you for joining today's call. With me today is our President and Chief Executive Officer, Douglas Bryant, and Randy Steward, our Chief Financial Officer. Our first quarter 2021 earnings release is now available on ir.quidel.com, our investor relations website. We will also post our prepared remarks on the presentations tab of our IR website following the conclusion of this call on May 6th for a period of 24 hours. Please note that this conference call will include forward-looking statements within the meaning of federal securities laws. Forward-looking statements by their nature involve material risks, assumptions, and uncertainties. In particular, our expectations and assumptions around the COVID-19 pandemic impact and response on our business, results of operations and financial condition, and that of our suppliers, customers, and other business partners are highly uncertain, continuously evolving, and unpredictable. Many possible events or factors could affect our future financial results and performance, such that our actual results and performance may differ materially from those in the forward-looking statements. For a discussion of such factors, please review Quidel's most recent annual report on Form 10-K, including the section titled Risk Factors, registration statements, and subsequent quarterly reports on Form 10-Q as filed with the SEC. Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, May 6, 2021. Quidel undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call, except as required by law. Today, Quidel released financial results for the three months ended March 31, 2021. If you have not received our news release or if you would like to be added to the company's distribution list, please contact me at 858-646-8023. Following Doug's comments, Randy will briefly discuss our financial results, then we'll open the call to take your questions. I'll now hand the call over to Doug Bryant for his comments. Thank you, Ruben. Good afternoon, everyone. Thank you all for being with us. I know it's quite late for many of you, but your time and your interest in our company are appreciated. As you saw in our press release, our first quarter 2021 results showcase a very strong performance, execution, and capital discipline of our Quidel team. We delivered a 115% increase in revenue, a 163% increase in gross profit, and an approximately 340% increase in net income and earnings per share compared to the same period one year ago. We achieved this growth while simultaneously launching new products expected to have high impact, like our QuickVue At-Home Over-the-Counter rapid antigen test and Solana SARS-CoV-2, completing the construction of a new distribution center, continuing to establish our new manufacturing facility in Carlsbad, managing a challenging supply chain, negotiating regulatory clearances, and advancing innovative new product platforms that will give us the foundation to capitalize on mass market opportunities that will serve Quidel well into 2021 and beyond. These results would not be possible without the extraordinary vision, talent, commitment, and grit of the entire Quidel team. We see it every day in our labs, manufacturing facilities, and packaging operations, as well as across our strategic and specialty teams, from regulatory and quality to Human Resources, marketing, and emerging markets. Everyone is stepping up big to take on the unique challenges brought on by the global pandemic. While doing our part in the fight against COVID has remained a top priority for us, we have also undergone a significant transformation as a company over the last several years, centered on the belief that what we do empowers others to take charge of their personal health and well-being. In doing so, our customers can pay it forward by taking prudent steps to protect their families, coworkers, and communities. That is the diagnostics-based force multiplier that is helping to contain the pandemic. The breakthrough products we have introduced are meeting society's needs, thanks to our R&D and innovation teams. As a result, we have several other strategic growth drivers worth noting. As most of you know, we are poised to introduce SAVANNA, a multiplex molecular analyzer that enables professional customers to analyze up to 12 pathogens or targets plus controls in a single assay run in under 25 minutes and built on our proven, robust real-time Polymerase Chain Reaction techniques. Given an ingenious combination of many unique factors, we managed to achieve superior and differentiating performance for turnaround time, simplicity, ease of use, modularity, and versatility of the platform. This revolutionary SAVANNA technology promises to disrupt and decentralize multiplex molecular testing, extending big iron centralized lab capabilities to moderately complex labs, regional hospitals, and potentially physician's offices, Urgent care clinics and other point-of-care settings. Feedback from customers has been tremendous. We have submitted our first SAVANNA RVP4 to the Food and Drug Administration recently. We expect to submit our first 510(k) package for the SAVANNA platform in the back half of this year. Regarding cardiometabolic product development, we began U.S. clinical trials in April for a Triage high-sensitivity troponin and expect to submit a de novo 510(k) package for PLGF, also known as Placental Growth Factor, this quarter. Very soon, we look forward to introducing our long-awaited Sofia 2 coronavirus antibody test, or as it will be more properly known, the Sofia 2 SARS-CoV-2 Antibody IgG FIA. Our proprietary technology employs immunofluorescence for the rapid qualitative and differential detection of human IgG antibodies to SARS-CoV-2 nucleocapsid proteins, spike protein 1 and spike protein 2 from finger-stick whole blood, venous whole blood, and serum and plasma specimens from patients suspected of COVID-19 exposure. Our Sofia 2 analyzer instrument also reports semi-quantitative signal-to-cutoff values for antibodies to each protein, which is an indicator of antibody titers or levels in the body. That's the technical side of the story, but the use case is far more understandable and compelling. Patients who experienced COVID-like symptoms before PCR and antigen tests were widely available want to know two things: Did they have COVID, and do they have antibodies against future infections? Our COVID blood test detects antibodies to three distinct parts of the virus, along with the individual's degree of active immune reaction to COVID-19. The test can also be used to confirm a vaccinated patient's passive immune reaction by detecting antibodies to spike 1, which is the single target protein for current COVID-19 vaccines. We plan to submit to the FDA an Emergency Use Authorization packet imminently and believe that access to this antibody test will bring peace of mind to countless people with pressing concerns about their immunity or vulnerability to COVID-19 infection. We are already getting calls from urgent care medical practices with patients asking for the test. In the coming months, we look forward to introducing our compact and competitively priced Sofia Q analyzers, which should accelerate and amplify Sofia platform penetration across traditional point-of-care outlets and ultimately reach the over-the-counter market. During the first quarter, we also focused on portfolio and channel expansions to enable Quidel to enter new markets, which we expect to be significant drivers of market demand and revenues going forward. Several of these opportunities have been secured and are beginning to take shape in the second quarter. Perhaps the most significant inflection point for our company came on the final day of the quarter, the first quarter that is, when we received EUA from the FDA for non-prescription use of our QuickVue At-Home OTC COVID-19 Test for pre-symptomatic and asymptomatic screening through serial testing. This over-the-counter sales authorization and embrace of frequent testing represents a sea change for viral diagnostics regulation that is already generating a wave of demand for at-home testing and testing for reopening at schools, workplaces, and entertainment sites. The next day, which was the first day of our second quarter, we received an EUA for serial screening with our Sofia SARS Antigen. This clearance for objective observed screening provides employers, sports leagues, and countless other commercial operations with a means to give their employees and patrons greater peace of mind when returning to commercial workplaces and venues with assurance of compliance with FDA and Centers for Disease Control guidelines. Both the QuickVue OTC and the Sofia SARS Antigen EUAs are truly pathbreaking regulatory developments that overcome significant barriers to both market adoption and the benefits that flow from frequent antigen testing. The potential implications of this regulatory shift extend well beyond the immediate addressable markets for OTC at-home and reopening testing at schools, workplaces, and entertainment sites. We see tremendous opportunities ahead of us to leverage our rapidly expanding installed base of 70,000 Sofia analyzers, along with the potential rise of telemedicine to drive sales of our full array of Sofia assays for flu, strep, Lyme disease, and a host of other conditions. Similarly, we believe broad consumer adoption of our QuickVue At-Home test could open the door to OTC approvals for at-home use of several of our other diagnostic products and platforms. Quidel is determined to capture significant share in these newly addressable markets through our strategic partnerships with global distribution and retail leaders, including McKesson and Walgreens. We believe that these partnerships could be significant and helpful in driving brand awareness as well as significant retail scale. For example, our partnership with McKesson enables us to continue to supply our existing customers in the professional segment. While at the same time, reaching significant new markets such as retail, testing for reopening schools and for health departments, employers, entertainment centers, and many other locations. Our agreement with McKesson will provide us with access to multiple retailers and its Health Mart franchise, allowing Quidel access to a network of over 5,000 independent pharmacies. Finally, McKesson will provide us with the ability to rapidly introduce products across multiple e-commerce sites such as Amazon, eBay, and Simply Medical. Our partnership with Walgreens will allow us to sell our QuickVue At-Home OTC COVID-19 Test to consumers at any of the more than 7,600 Walgreens locations in the U.S. and Puerto Rico, or at walgreens.com, further enabling consumers to take charge of their own health. These important and significant partnerships will give us unprecedented exposure to the OTC segment, as well as fulfillment pathways to serve employer groups that are seeking to bring employees back to offices and work sites. We are extremely proud of these new partnerships and the promise they hold for democratizing access to our innovative rapid antigen tests for the well-being of families, workplaces, and communities everywhere. As we look at the second quarter, in the month of April, we realized the same demand for our professional COVID tests as we did in February and March. For May and June, we anticipate some reordering of our professional COVID tests and expect accelerating demand for our QuickVue At-Home OTC test, aided by our key strategic partnerships. Moving forward, we see increasing revenue opportunities tied to at-home and on-site testing of asymptomatic individuals in support of back to school and work initiatives. It's still very early. In summary, we have a powerful mix of products, partnerships, and macroeconomic trends. COVID-19 testing, which represents a significant component to our near-term growth strategy, is just one aspect of the long runway ahead of us. While it's hard to model with any certainty the effect that COVID will have on our business, we are confident that there are three macro trends, symptomatic testing, asymptomatic screening, and at-home testing that could prove to be material to both market demand and our revenue growth going forward. These innovative products, combined with the gateways they provide for our broader portfolio of diagnostic assays, pave a long, exciting roadmap for our continued growth and success as we advance diagnostics to improve human health. That's our value proposition. While we understand that we will report revenue and margin each quarter, and to a certain extent, be valued based on short-term performance, the longer-term value of our company is far greater. Randy Steward? Thank you, Doug. Good afternoon, everyone. As Doug stated, we saw very strong year-over-year growth in the first quarter. We continue to make great strides to develop, introduce, and scale new COVID-19 assays, as well as progress on our longer-term goals and strategy, which involves the rest of our product portfolio. As reported, total revenues for the first quarter were $375.3 million, compared to $174.7 million in the first quarter of 2020. This 115% increase in revenue was driven by significant growth in our rapid immunoassay and molecular categories due to strong demand for our rapid antigen and PCR COVID-19 diagnostic products. To a lesser extent, demand for our Solana isothermal molecular products. In the quarter, we also saw solid growth for our cardiometabolic line, while our specialized diagnostic solutions product category saw modest declines. Foreign currency had a positive impact of $2.1 million in the quarter. It's interesting to note that for the first time in 10 years, the CDC's influenza-like illness data never crossed a 2% threshold for percent positive cases, illustrating the fact that there effectively was no influenza season. Our all-in flu revenue for the quarter was $5.92 million, compared to $79.6 million in the first quarter of last year. Rapid immunoassay product revenues increased $141.7 million to $237.7 million in the first quarter of 2021. Within this category, Sofia products grew $156.4 million or 240% to $221.6 million, of which $212.1 million were attributed to Sofia SARS Antigen sales. Of the $15 million in QuickVue product revenue in the quarter, $12.4 million was attributed to the QuickVue SARS test. As a reminder, and as Doug mentioned, we did not receive the EUA for our QuickVue At-Home OTC COVID-19 Test until March 31st. For the cardiometabolic immunoassay business, revenue was $66.6 million, or a nice 23% increase from the first quarter of 2020. This is our second consecutive quarter of year-over-year growth for our Cardiometabolic segment, demonstrating a return to pre-COVID levels as we continue to see strong performance from both our Triage and Beckman BNP global businesses. Of the $66.6 million in revenue, $33 million came from the Triage business and $33.5 million came from the Beckman BNP business. For both Triage and Beckman BNP, year-over-year growth came from all geographies. Revenue in the Specialized Diagnostic Solutions category decreased $5.6 million in the first quarter to $10.9 million, driven by a decline in sales in our respiratory products from our cell culture business, the result of very little non-COVID respiratory disease. Our molecular diagnostic solutions category increased $51.9 million in the quarter to $60.3 million, driven by $51.6 million in sales of our Lyra SARS-CoV-2 products. Solana revenues grew 11% to $7.1 million in the quarter. Solana SARS-CoV-2 Assay generated $4.2 million of that $7.1 million in the quarter. This was below our internal estimates due to the late EUA approval for the product, resulting in being a late entrant into the market. Gross profit in the quarter increased $187 million to $302 million, and gross profit margin was 80%. Margin improvement was driven by demand for the SARS-CoV-2 assays, which drove favorable product mix. The sequential decrease versus fourth quarter of 2020 was also due to product mix, with less SARS-CoV-2 product sales. As it relates to operating expenses, we continue to invest in R&D with the goal of launching our SAVANNA platform this year and advancing on our longer-term initiatives, new Sofia assays that can leverage our large installed base of instruments, next-generation platforms like Sofia Q and other exciting technologies. We will also continue to invest in sales and marketing as we develop more partnerships and expand sales promotion and marketing dollars in new markets such as at-home testing, OTC, and other markets that can significantly broaden our customer base. As it relates to the provision for income taxes for the quarter, we reported $44 million in income tax expense, which resulted in an effective tax rate of 20%. Tax benefits from excess stock-based compensation affected our effective tax rate in the quarter by approximately three percentage points. We are currently estimating a full-year effective tax rate between 22% and 23%, excluding any potential impact of legislation, which remains uncertain. As of the end of March, we had approximately $981 million in cash and cash equivalents. During the first quarter, we generated $585 million in cash flow from operations. In the quarter, the company also invested approximately $65 million in capital expenditures. Relating to capital deployment, in April, we made our annual $48 million payment to Abbott for the Alere assets we acquired in October of 2017 and have a remaining balance of only $88 million on the deferred consideration. That will be paid over the next two years. For the remainder of the year, we plan on spending approximately $200 million in support of our SAVANNA cartridge manufacturing, increased capacity for our immunoassay products, and upgrading our overall information systems. With that, we conclude our formal comments for today. Operator, we are now ready to open the call for questions. At this time, to ask a question, press star one on your telephone keypad. Again, that's star one. We'll pause just a moment. Your first question comes from Alex Nowak with Craig-Hallum. Great, good afternoon, everyone. Hi, Alex. Hey, Doug. I think the biggest question that everyone has here is how do you quantify all these new markets to sales in both the near and the long term? It sounds good. You got testing going from the professional market. You got to go into asymptomatic and symptomatic. You have to go at home. You're making these distribution deals. Of all the deals out there, just how definitive is that revenue, and how can a company take all of these announcements, all these potential channels that it could go into, and quantify them by year and put them into a financial model? I think we're just looking for some clarity and how to define ultimately what the revenue could look like this year. Yeah. The short answer, Alex, although I feel your pain, and it's the reason we don't give guidance and will not be giving guidance on revenue or capacity, is that it's essentially not forecastable. Recognizing that you would like to build a model for your clients, for most situations, I guess that would make a lot of sense. For this new paradigm of COVID testing at retail, which is new, for employers, which is new, for schools, which is new, sports and entertainment venues as well, and travel, all of which are new, it's impossible for us to model at this stage. I would say to you all on the phone, our colleagues and analysts How can you model it? It's just not possible. I feel your pain, Alex, in that you try to bucket each one of these opportunities and see what you think the opportunity looks like. If you just take school testing for a second, you've got some states that are already out there, have already definitively decided what they're doing, and they did so without an request for proposal. We have several of those, which will be announced shortly. In addition, we have states that are just starting an RFP process to determine what's possible. Then you have some states that are letting the superintendents of the schools make the decision. Just that bucket alone, how am I supposed to figure it out at this stage what the actual demand is going to be? I can make some wild guesses, but I can't. Later, if folks want to talk about all the different categories, I can tell you where we're at with each one of them. At the end of the day, it's just super difficult to define how big it could actually be. Let's just provide just a little bit more color on the question. I do appreciate the question. Employer testing. We have two very large global employers that are imminent and will have impact in this quarter. They're large enough to be material, therefore we will be required to announce. We also have numerous other employers that aren't quite so big, and they're in process as well. How many employers can actually do it? At what price point? How big of an employer do you actually have to be, and what sort of appetite do you have? You've got some people that think the vaccines are the answer. Others, like my own company, we're testing twice a week because we know we need to protect our employees, and we're not going to bring our employees back until we know that we can say definitively for them that they're safe. Sporting venues. Several are in the works. I'm not going to name them, but the Padres, because we went public, is a good example of what we're doing there, is we're testing not only the employees of the park and the vendors who support the games and all that, the front office, the back office, but we're testing potentially a number of people who are showing up at the Quidel gate, at the park to be tested. I would say to you that there are numerous other sports franchises that have reached out and we're in active discussions with now. How big could that be? I don't really know. We talked about schools already. Travel, we're providing tests for a couple of countries right now where they are testing inbound passengers upon their arrival. I suspect other countries will do something similar moving forward. In fact, we've had a number of conversations with respect to that type of testing as well. Pharmacy. Retail pharmacy is a big channel, but how much demand really is there? I don't know. Certainly McKesson and Walgreens think that there is. We've partnered with those two and those have been announced. We also have several others that are going to follow shortly, and it won't be just the big name retailers. It'll be grocery store chains that have pharmacies in their stores. We have a number of those in the works. I apologize, Alex, that we don't have anything definitive that we can tell you by the major buckets, but it also is why it's just impossible to forecast. I appreciate the answer, Doug. Thank you. Just the second question here, now that you've gotten this beachhead established with an over-the-counter test, I guess what other assays do you want to add to that platform on QuickVue? What does Walgreens really want you to add? Have they signaled anything? The same question, but I guess over to Sofia. You had a really big menu lined up to launch on Sofia back in, when we were talking 2019, it's going to launch in 2020. Just where does that pipeline stand for Sofia and then again, same thing on Quidel OTC? We're still progressing very rapidly with Sofia assay menu development. I won't go through all those on the call here now, but if you refer back to the Analyst Day, we did a pretty good job of reviewing all those things. Are they moving at the speed that we would expect in a non-COVID year? No. The FDA clearly is prioritizing EUAs versus 510(k)s for other things. There is a noticeable delay at the FDA, understandably, not their fault, right? You asked about other products. I think in places like Walgreens, I won't speak for Walgreens or any of the other big box retail pharmacy chains, but I would say that we've had a number of conversations where these folks think that this could be an important sea change in terms of diagnostic testing. We're going to move from telemedicine to what we're calling tele-diagnostics. I think that the retail pharmacy segment is a bit mixed, but there are some larger folks talking already about could you do flu at home, could you do strep or could you do Lyme disease at home? I think there is an opportunity for diagnostic companies, whether it's us or Abbott or somebody else, to begin to build a market for diagnostic testing that is accessible for those folks who want to test at home, whether aided by the counseling of their physician or other healthcare provider or not. We certainly see that that could be an opportunity. Think about what happened in pregnancy testing or glucose testing where it went completely over the counter. I think it is an opportunity. We're certainly planning as if there is an opportunity. I think that that is an additional market segment that could be very helpful for us moving forward. All right, excellent. Appreciate the update. Thank you. Thank you, Alex Nowak. Your next question comes from the line of Brian Weinstein with William Blair. Hey, guys. Good afternoon. This is Griffin Soriano on for Brian. Just a quick one on the Walgreens announcement. Can you clarify what your pricing is into the channel and maybe what you think that pricing is going to end up being to the end user? On the second one here, are you shipping directly to Walgreens? Revenue recognition, is there a right of return or is it revenue recognized on shipments? Yeah, we're recognizing revenue directly into Walgreens. That's the short answer to that question. What am I missing, the first part? About pricing to the end user? Yeah. I am going to answer it two different ways. First, I will start by saying price is interesting because in Q1 we did not actually see any change in price. Moving forward, though, other than to say we believe our products can command premium pricing, we are not really going to be very specific. I would say this, that the QuickVue product, the OTC QuickVue product, is faster and easier to run than our competitors. Therefore, we believe that we should be priced to the end user at slightly higher. Wherever they go, we will be slightly higher. That is my view. Okay. Just one more here on the non-COVID side. We're about six months removed from your last Analyst Day where you gave some pretty specific revenue targets, one of which was core non-COVID revenue to grow at about an 18% CAGR from 2019 to 2024. Is there any reason to think that there's a change there, or are you still endorsing those revenue targets from the Analyst Day? Yeah, we believe those are solid. You heard Randy talk about the Cardiometabolic segment. We're poised to continue to do well there and to grow, I would say low to mid-single digits with the prospect of growing more rapidly when we introduce high-sense troponin. As I mentioned, we started clinical trials in April. We think that that's a pretty big opportunity. Obviously, that would be huge growth beyond what you're talking about. PLGF, we're going to submit to the FDA the data, and we'll see what the intended use claim is. At minimum, I would say that we'll get a claim for that product that says it's useful in assessing placental health. If we got something that was a little bit better, you could say that physicians could use this as an aid in diagnosis of preeclampsia or to be used as a predictor of preeclampsia. If we were to get clearance for that product, I see that as being a huge growth driver as well. On top of that, what I see is the next big flagship product for this company. Sofia was a home run. I think SAVANNA's going to be a grand slam. We, as you heard Randy say, we're spending another $200 million ramping up cartridge manufacturing because we firmly believe we've got a product that is going to be best in market. Great. Thanks, guys. Thank you. Thank you. Your next question comes from Tycho Peterson with JPMorgan. Hi, guys. This is Casey Woodring on for Ty. Hey, Casey. Yeah, hey, how's it going? Good. Going back to a comment you made earlier regarding guidance. You're not giving 2021 guidance, obviously, but I think I heard that you're not giving capacity guidance anymore. Just wanted to clarify. The 240-million unit run rate for Sofia and 600 million QuickVue by the end of the year, should we still think about that, how you're tracking towards that? Or maybe there's nothing to say about that one this quarter? I'll just tell you we already know we're going to beat those numbers. We're running ahead of that now. I'm not going to get into the nitty-gritty because there's so many moving parts from week to week. One week it's this number, and the next week it's another. You guys think it's simple, but it's not. It's a highly complex supply chain. It's a highly complex set of people doing a lot of things for us that are outside the company. We don't always have control of absolutely everything. It is very difficult for us to say one number and then have it come in on that number. It's just way too hard. What I will tell you right now, the important component of the manufacturing process is the pouching of strips. And we're running ahead of schedule pretty significantly. Can we catch up with all the other stuff? I don't know. Looks like we could. Fingers crossed. You guys don't want to hear fingers crossed. You want to hear a number, and I don't have a number for you. Got you. Okay. That makes sense. Going back to SAVANNA, following up on the previous question, is SAVANNA still tracking towards a 3Q launch here? Maybe what sort of early conversations are you having with customers given the scale up by new competitors in the space? You think of Mesa, Talis, Binx. It's starting to become sort of crowded in that space. Maybe just talk to a little bit about how SAVANNA is differentiated here. Yeah. I'll start by saying the companies you mentioned are tiny. Tiny is not even a good word, microscopic. Their ability to ramp and to compete with the big players like Cepheid and others, I don't see as imminent. We, on the other hand, are ramping up manufacturing pretty dramatically in order to put out a number of cartridges into the space. The other thing that these other companies lack that we possess is menu. We already have six products, multiplex products that we're going to be launching into the market. They're going to be in clinical trials this year. We've already submitted the EUA for SAVANNA RVP4. We're way ahead of those companies. Not only in terms of product quality, but in terms of our ability to ramp and to manufacture. Plus, we have a commercial organization. I don't want to sound defensive here. I hope I sound offensive, okay? We don't intend to worry about those guys. We're worried about what Cepheid's reaction is going to be. Got it. Maybe if I can just sneak one last one in. On the combo test for Sofia, obviously flu didn't materialize this year. Given a more normalized environment, how should we think about the split between standalone and combo? I know previously you've talked about potentially as much as 80% of the Sofia COVID going to the combo. Maybe just wondering, some updated thoughts on that, maybe longer term, how will that combo test potentially maybe cannibalize the regular flu business with flu and COVID being tested together moving forward? Just how should we think about that? Thank you. Sure. Well, I'll start, Casey, by saying that we do have inventory of the combo product, we're ready to roll in the fourth quarter if indeed we need to ship product. We were asked to develop that product by folks in the administration. We did so. We were asked to manufacture a lot of the product. We did, we had no flu. Of course, we had inventory on hand, I wouldn't see us manufacturing significantly more at this stage. Moving forward, that's a really good question. I can see a world in the future where you're going to be looking at a respiratory panel that includes flu, RSV, and COVID. If you want to throw another one in there that's probably more prevalent than you think, you probably should have human metapneumovirus on there, too. Our ability to do that, I think, is going to be great timing as we move into future respiratory seasons. People with symptoms of fever and a cough, which could be almost anything these days, anything that's indicative of a viral infection, you kind of want to test with a panel, I think. I do think that, I don't know if you'd call it cannibalized necessarily, but I do think that our influenza products will be part of a combination of whether it's on Sofia, by the way, where we're doing a combo assay too that includes those things, or if it's by molecular method. We're in a position, I think that's great from a customer perspective and from a commercial organization's perspective as well. When we go in to see a customer, we ask them what they want, and we give it to them. We don't debate whether molecular is better or immunoassay is better. They're both better depending on what you're looking at. Are you looking at speed or are you looking at affordability? Are you looking at sensitivity and performance? We are one of the few companies, I could name the other ones, but we're one of the few companies that honestly goes in and sees what the customer wants, and we give it to them. I see SAVANNA with the panel now making that even more so the case because we have a product that basically will go just about anywhere the testing is done. Your next question comes from the line of Steven Mah with Piper Sandler & Co.. Hi, guys. Thanks for the questions. Hey, Steven. Hey. You might have discussed these already, and if so, I apologize. My one question, just a follow-on to SAVANNA, and maybe you can just bundle that in with an update on timing of Sofia Q as well, was what is the CapEx going to be to support the Sofia Q launch and the SAVANNA launch, and how should we think about timing of that CapEx spend? We'll start with the CapEx question, Steven. We already said in the script that we were $200 million total between now and year-end. I did just sign a fairly big chunk of a return on capital employed this morning. It was obviously big enough that it required my signature. We've got some, I would say it's pretty evenly distributed between the quarters the $200 million. Yeah. [audio distortion] something like that. That would be about right if you're trying to bucket it into the quarters. Regarding Sofia Q, we're in great shape there. We've already submitted to the FDA. They have the data package. They're reviewing it right now, or as they like to say, it's under active review, which means they're looking at the data. They're sending back questions. It's kind of like the chess clock. Right? We send data back, and then we hit the button, et cetera. Yep. Did that answer what you were looking for, Steven Mah? Yep, that's right. SAVANNA is set to launch in Q3 still? No, it's never been Q3. It's Q4. Oh, Q4. Sorry. Q4 launch. Honestly, we've done some things to pull it forward, given things that we had to solve for along the way. I'm pretty proud of the fact that we're still sticking to Q4. Okay. Got it. Perfect. Next question. Yeah, I saw congrats on the Walgreens for OTC. Do you have timing for the other big box retailers? Soon. Very soon. Imminent. What's another word for imminent? Around the corner. Getting there. All right. Fair enough. A final question. I know there's this government contract out there to deliver 60 million at-home tests by the summer. I know things are impossible to forecast, can you give any color on that and confirm if you guys are in the mix for that at all? Is it 60 million school kids, Steven? Is that what you're asking about? No, this is a government contract that's like Ellume got. They got like a $230 million grant. Oh, no, that's not what that means, Steve. They were funded in order to ramp up manufacturing capacity. Yeah, this is the $60 million at home. Yeah, what they're doing is the government has agreed to buy those in order to fund the manufacturing capacity ramp up. Yeah. Okay. Got it. I know they had mentioned there's going to be six or seven companies, but they've only announced one. That's completely separate. We're not in that group because we're more like the larger companies, although we're not as large as obviously Abbott, Roche, and others. We don't need funding in order to ramp up manufacturing capacity. We did get some funding, as you know, to ramp up Sofia manufacturing. I think the number there was. 72. Right. That was a RADx program. And nine. Yeah. We're still doing lines 10 and 11 on our own. For the Rutherford facility in Carlsbad, that's all self-funded as well. Unlike these smaller companies, we don't need the funding. Okay. Got it. Thanks for clarifying. All right, thank you. Sure. Bye, Steven. Your next question comes from Andrew Cooper with Raymond James. Hey, guys. Thanks for the time. A lot's already been asked. Maybe one, and I appreciate that things aren't necessarily signed yet, but just when we think about the states and kind of the schools and what this can look like, can you help firm up what the structure is? Obviously, the states kind of are getting the money from the federal government. Are you having more conversations where it's a hunting license, and if a school wants to buy or a school district wants to buy, it's sort of a right to buy, or is this direct sales to the state or school district level? Kind of how are those conversations really shaking out? Yeah, let me repeat. Maybe I'll just say it again, and then maybe it'll be clear the second time. I'm sorry, states have received funding, and most states already have access to the funds. Some states are implementing statewide testing and have developed their own plan. They're looking for turnkey solutions, which we're providing in a number of cases. There are also states that are early in the process and have therefore just now begun sending out RFPs. There are some states running way ahead of others and are embracing it, and there are others that are involved in the RFP process and are sort of trying to see which way things are going. Then there are states that are basically allowing the individual school superintendents to make the decisions on how the testing will be done, when it'll be done, when it'll start, when it'll stop. They have a bunch of school superintendents doing that. You have two approaches. One is the latter being the bottom up and the other being somewhat top down. It's easier for us to obviously work with the states that are top down because we go to them and we present a proposal on how we would do that for them, and then they engage with us. We have at least three states that fit that particular profile that are already committed to using our product as a platform. What I would say is, it's impossible at this stage to predict the magnitude of all this. I would say that we hear the wind blowing, and we see signs that the trees are beginning to move. Okay. Helpful. Maybe just, you said there's three states that are committed to using your product in the top-down way. Is that exclusively or in conjunction with whether it's lab-based or other sort of point-of-care products? Can you help us think about what that is? I would call it practically exclusively. You might have a state where this chunk is going to you and the other may not yet be decided. It is pretty darn complex. We've got a whole team of people that are just doing schools right now. Because every state is so far a little bit different, not dramatically different, but they're all just a little bit different. Okay. Helpful. Then maybe just one on sort of the pacing of the quarter and the comment you made around kind of April looking more like February and March. Can you give a little bit of granularity? Obviously, you had a tremendous amount of inventory in the channel as [crosstalk] symptomatic cases were coming down in January. Andrew, I think you misunderstood the comment in the script about the months. What we were talking about there was the testing for COVID in the symptomatic professional segment. Right? Right. I think I actually just said professional segment, which you may not have connected the people who are getting sick. Right? That base level testing that is for people who have fever and a cough, that group. Okay. I understand that. I guess you were talking more about end market utilization, not necessarily the revenue trajectory to Quidel. Is that a fair comment? Yeah. Again, there's two components right now. This is just a little bit more complicated than last year when we were only testing people who were either had symptomatic or they had been in contact with somebody who was symptomatic, or they were just worried, right? Here, there's that underlying demand, and that demand looks a lot like those months, right? When you look at April, it looked a little bit like the back half of the first quarter. Right? It didn't change much. We're now seeing an uptick, and what we're pointing out is that inventory that we talked about that was in the channel, we're now starting to bleed through that. We're now seeing reorders in the back half of this quarter, which we had not necessarily anticipated. We had hoped that that would be the case, but right now we see positivity rates in various states creeping up. We see some states where at least one fourth of the cases are in kids, and kids obviously haven't been vaccinated, so kids are spreading infections primarily at this stage. That's the point we were trying to make, Andrew, was that that underlying demand is always going to be there for some period of time because we're not going to be able to eradicate COVID. It's going to be there at a certain level. We thought that that had flattened, but now we're actually seeing it start to tick back up, and we are starting to actually see reorders for our traditional professional product. That's what that meant. On top of that, of course, you now have this transition into asymptomatic testing, and that's, I think, where most of the volume's going to be, at least in 2021 and probably 2022 as well. Understood. Thanks. I'll stop there. Sure. Thank you, Andrew. As a reminder, to ask a question, press star one on your telephone. Your next question comes from Jack Meehan with Nephron Research. Good afternoon. Hey, Jack. Doug, I was wondering if you could give us an update on your progress with employers around back-to-work testing. I think you had previously said you would've hoped to have had something announced by now. How are those conversations going, and how do you feel with your capacity, the ability to build out some of those relationships? Yeah. I think maybe there's so many of us that are conducting calls today. You must have just jumped on a little while ago. Early in the call, I said that with employer testing, we have two very large global employers that are eminent. I would add a little bit more color and say that we're in the final throes, and it's the back and forth. It's when are you going to get your approval in India so that we can do testing for our employees there. These are global employers that are significant, and if we can get it done in time, they're going to have a material impact on the quarter. There's numerous other smaller employers as well. I would say we're at the point where we are expecting to announce one or more of these imminently. Great. In fact, the larger of the two, I believe we've already shipped the product. Is that right, guys? A small amount in order to get started.. Right. We have begun shipping. Yeah. Great. On SAVANNA, I know you had started the clinical trials last quarter. Can you give us an update on the status there and what the data looks like, just in terms of the performance of SAVANNA in the field? I can tell you that things look great at this time. We haven't tested every single one of the six cartridges. We're doing it in a phased approach. Obviously, we have data on the RVP product because we've already submitted it, and it looked very good. Is the plan with the initial approval for it to still be for moderately complex settings? And how do you think the demand is going to look like from hospitals to add new equipment in the fall as it pertains for COVID testing? We intend Jack to be both 510(k) and Clinical Laboratory Improvement Amendments waived. We could have made a decision to link those together, which would have given us a more predictable timeline with the FDA. Rather, we've decided to separate it and go 510(k) in order to get the instruments into the hospitals as quickly as possible. We also want CLIA waiver, though, because we want those larger integrated delivery networks to be able to democratize testing. In other words, decentralize it out to their clinics where they want testing done. For example, a lot of folks would tell you that it's really handy to have sexually transmitted infection or gastrointestinal testing out into the clinics. They're not actually able to do that at this stage very easily. It's that sort of thinking that causes us to believe that having a CLIA waived product will be very important. If I can do one last one, I know it's obviously difficult to model right now. I did have a question about one specific product, Lyra, as it goes for the COVID sales. How is the funnel there in terms of demand? Just any commentary around what you're thinking there for 2Q? Well, Lyra looks pretty solid, I have to tell you. I hear other companies talking about the demise of PCR testing, but we're not seeing it. I do think we're taking cuts to some customers too, and we have some targets that we're actively working, but we haven't seen the fall off that others. It's reasonably stable at this point. I think there has been a decline, if you want to look at it as a same-store sales, you see a decline, but we're offsetting that with gains, particularly in the regional reference laboratory segment. Thank you, Doug. Thanks, Jack. That is all the time we have today. Please proceed with your presentation or any closing remarks. Well, I'll just conclude by saying thanks everybody for your support and your interest in Quidel. We had an excellent first quarter. Not necessarily the best forecasting on the planet, but we're in good shape to achieve our growth objectives over the next few years. Feel great about it, very optimistic, and we're not done yet. Thanks again for being on the call. Ladies and gentlemen, we thank you for your participation and ask that you please disconnect your lines. Goodbye.