Good afternoon everyone, and welcome to OraSure Technologies' 2014 Second Quarter Financial Results Conference Call and simultaneous Webcast. As a reminder, today’s conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions) OraSure Technologies issued a press release at approximately 4:00 PM Eastern Time today regarding its 2014 second quarter financial results and certain other matters. The press release is available on our website at www.orasure.com or by calling 610-882-1820. If you go to our website, the press release can be found by opening the Investor Relations page and clicking on the link for press releases. This call is also available real-time on our website and will be archived there for seven days. Alternatively, you can listen to an archive of this call until midnight August 13, 2014, by calling 855-859-2056 for domestic or 404-537-3406 for international. The access code is 74668640. With us today are Doug Michels, President and Chief Executive Officer and Ron Spair, Chief Operating Officer and Chief Financial Officer. Doug and Ron will begin with opening statements, which will be followed with a question-and-answer session. Before I turn the call over to Doug, you should know that this call may contain certain forward-looking statements, including statements with respect to revenues, expenses, profitability, earnings or loss per share, and other financial performance, product development, performance, shipments and markets, business plans and regulatory filings and approvals and other matters. Actual results could be significantly different. Factors that could affect results are discussed more fully in the company’s SEC filings including its registration statements, its annual report on Form 10-K for the year-ended December 31, 2013, its quarterly reports on Form 10-Q, and its other SEC filings. Although, forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements may not be reliable. The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. With that, I’d like to turn the call over to Doug Michels.

Okay. Thanks, Rena, and good afternoon everyone, and welcome to our call. Our financial performance for the second quarter was strong as we met our guidance on the top line and exceeded it on the bottom line. Consolidated net revenues for the quarter were $26.4 million, an 8% increase from the second quarter of 2013. Our HCV business had a particularly good quarter, with sales growth of 134% from the prior year period. Our molecular collection systems revenues rose 5% over the prior year despite the absence of revenue DNA Genotek's largest customer. We are also pleased to report a consolidated net profit of $2.5 million, primarily due to a $5.5 million payment that we received in connection with the termination of our drug assay collaboration with Roche Diagnostics. In June, we announced a significant new agreement AbbVie for the co-promotion of our OraQuick HCV rapid antibody test. The company granted exclusive promotion rights to AbbVie for the OraQuick HCV test in certain U.S. markets. And in exchange for these rights and certain another services we will receive up to $75 million in payment over the term of the agreement which runs through December 31, 2019. In addition, the company's eligible to receive annual fees based on performance. These fees can range from $3.5 million to $55.5 million per year and will be based on a number of patients that test positive with our OraQuick HCV test and enroll into a patient support program sponsored by AbbVie. Since the announcement, we have received the first payment from AbbVie under that agreement and recognized a portion of that payment as revenue during the second quarter. In addition, we have made great progress in preparing for the launch of our co-promotion activities which get underway in earnest of this month. I will provide additional details on these activities later in the call. So with that, let me turn the call over to Ron for his financial review.

Okay. Thanks Doug and good afternoon everyone. Let me start with our revenues. Our second quarter 2014 consolidated net revenues were $26.4 million compared to $24.3 million reported in 2013. Our consolidated product revenues increased 6% as a result of higher sales of our OraQuick HCV, cryosurgical systems and molecular collection systems products. These increases were partially offset by lower domestic sales of our OraQuick professional HIV product, OraQuick In-Home HIV test and insurance risk assessment products. Licensing and product development revenues were $775,000 in the current quarter compared to $274,000 in 2013. Our overall infectious disease testing revenues increased 6% to $12.7 million in the second quarter of 2014 compared to $12 million in the second quarter of 2013. Aggregate sales of our OraQuick HCV professional product in both the domestic and international markets increased 134%. Higher demand in the domestic market among new and existing customers contributed to the increase in sales of our HCV test in Q2 to $1.2 million from $690,000 in the prior year. International sales of our HCV test in the second quarter of 2014 increased to $974,000 from $247,000 in the same period last year, primarily due to sales and support of the significant testing program with an international NGO. We expect sales to this NGO will be at a much reduced rate in Q3 and Q4. Domestic sales of our professional HIV products decreased to $7.7 million in the second quarter of 2014 from $8.1 million in the second quarter of 2013. This decrease was a result of continued pressure on government's budget, some customer migrations to automated fourth generation amino assay HIV as recommended under new testing guidelines issued by the CDC and changes in customer ordering patterns. We expect these headwinds to continue for the foreseeable future. During the current…

Okay. Thanks Ron. As you know there have been many positive developments in our OraQuick HCV business. The most recent was the execution of our major agreement under which AbbVie and OraSure will co-promote our OraQuick rapid hepatitis C test here in the United States. A redacted copy of this agreement was filed today with the SEC along with our second quarter Form 10-Q and its available now and we encourage you to review this document. Under our agreement with AbbVie, we will be focusing our co-promotional efforts on several specific markets in the United States. As you might expect the significant amount of work has already begun under this agreement. The largest market segment consists of primary care and specialty physicians. AbbVie has agreed to detail our hepatitis C test into this market segment and we will be targeting in excess of 10,000 physicians. Training of the AbbVie representatives on our product has already occurred and product detailing started this week. To support these efforts, AbbVie will be launching its patients' support program later this month to assist patients who screened positive for HCV. This program will help patients understand the implications of their diagnosis and the steps they can take to address their infection. Our manufacturing representative organizations, the MROs, and our infectious disease sales team are coordinating with our AbbVie counterpart on all aspects of this co-promotion. We are providing product samples to qualified accounts along with personal and web-based training on the use of our products for physicians. We are also implementing a co-payment assistance program to help reduce the cost for commercially insured and uninsured patients. Additionally, we are offering a telephone hot line for comprehensive customer support. Product sales driven by the co-promotional effort will be handout through our distributors and our direct sales…

Thank you, sir. (Operator Instructions) Our first question comes from Shaun Rodriguez of Cowen and Company. Your line is now open.

Hi, guys. Good afternoon. Thanks for taking the question. So maybe first on the AbbVie partnership, I was hoping you could help us understand a bit better what's meant by the patient support programs sponsored by AbbVie. Does this mean that these patients are taking AbbVie's drug regimen or kind of patient beyond Gilead's drug regimen and still being in AbbVie's patient program? Or is this just going to include all positives regardless of ultimately what drug regimen they are on.

So AbbVie -- this is Doug and Shaun for the question. So, the AbbVie's patient support program is an opt-in program for patients that are tested with the rapid OraQuick hepatitis C test. And the way that the performance payments work is, as we enroll HCV positive patients tested with the rapid test into AbbVie care patient support program. That counts towards our annual performance milestones. It is not necessary that those patients end up on AbbVie's therapy. But by being in the patient support program those patients will receive information about hepatitis C. They will receive about their -- the importance of getting a confirmatory test. And they will also understand their different options as to how they can manage their hepatitis C infection.

Okay. So it sounds like there are two levels there then. There is having a positive test result, but also actually getting them to enroll into this program and getting them to enroll is actually what counts towards the triggers. Is that the right way to characterize that?

So a patient can opt into the patient support program upon testing. We generate credit towards the annual performance milestones for those HCV positive individuals that are -- that opt into the patient support program.

Okay, okay. That’s helpful. So I have a few, but maybe on 23 or Genotek, given 23andMe didn’t buy in the quarter, that performance was really pretty impressive. But I guess where you expecting them to go to zero at any point in a quarter or was this even surprising to you? And the follow-up really is will you -- do you expect this improve from here or do you think that there are going to be quite for another few quarters.

Well, so it was in line with our expectations. Obviously, we are in regular contact with 23andMe and have some visibility to what their -- what the future demand is expected to be. We do expect some demand in the third quarter. Although it will not be substantial, so -- and we don’t have any visibility beyond that for the reminder of the year. It doesn’t mean that there will be zero. But at this point in time we see some demand coming in Q3 and that’s the extent of our visibility for right now.

Okay. And then last on the Q3 revenue guide. I mean, I guess I'm just trying to understand the components there. So what's included for revenue from the AbbVie partnership payments, if any. Does anything change about how those are going to be recognized? So I'm just trying to understand kind of the sequential dynamics in the core business versus, obviously these dynamics from these payments coming in. So can you help me understand that Ron?

Sure, absolutely. So first off with respect to the AbbVie revenues that are included in the guidance, and specifically related to the amortization of the $75 million over the course of the agreement, we will include $3.4 million worth of revenues or they are included in the guidance that we have offered up to the Street. I think though what you need to do is to focusing on a couple other areas specifically for Q3. Cryo, we expect that business to be down over $1 million sequentially as a result of the seasonal profile of that business. Additionally, we do expect the HIV OTC business to be down sequentially, as result of the perceived relationship between the promotional spend and consumption. And as Doug pointed out, the reality is that we are backing all forms of spend levels there. And lastly, our infectious disease business is expected to be down sequentially for the reasons given in our prepared remarks for both HIV and possibly in the international space for HCV. As I mentioned the non-governmental organization, NGO will be purchasing at levels significantly lower than what they had done in Q2, Shaun.

Okay. And then last quarter, so finally it’s a follow-up there. But last quarter you said you expected U.S. HCV to be up sequentially every quarter for the year. It sounds like that’s still on the table then as an expectation and reflected within that guidance?

Absolutely, yes.

Okay.

Absolutely. As the U.S. domestic HCV business is going very well.

And we -- I should add and we try to be realistic in terms of our expectations in terms of HCV product revenues that will result on the AbbVie OraSure co-promotion at least in the third quarter and likely in the fourth quarter simply because we mentioned just trained the AbbVie reps. Actually we are training our MRO reps on all the different components of the relationship and how that’s all going to play out in the field. And this has all been very carefully orchestrated and a lot of systems in place to make sure that all organizations are working in concert. So that’s rolling out right now. These different initiatives are going to roll out through the reminder of the year and I will we will really the full impact of those beginning in 2015.

Thank you guys.

Thank you. Our next question comes from Brandon Couillard of Jefferies. Your line is now open.

Hi this is Kate in for Brandon actually.

Hi, Kate.

Hey, Kate.

Hi, guys. First I was wondering if could quantify if there are any SG&A or HCV related SG&A investments in 3Q guidance and may be how that would expect to trend going forward?

Sure. It’s a great question. And there are investments that we're making in the program to support the initiatives that Doug spoke of in the prepared remarks. They are underway in the third quarter here 2014 and they are included in our guidance and actually our expectations are at the moment that they will likely be even higher in the fourth quarter of 2014 to support the program as more of the effort is captured for the entire quarter as opposed to a fraction of it in the third quarter here.

Okay, great. That's helpful. And then just back on 23andMe, is there any quality meeting where you can quantify how 23andMe sales in 3Q were relative to their 2Q order of 2013 last year?

So, in this most recent quarter Q2, we did not record any revenues from 23andMe and so the entire amount of revenues recorded here in 2014 of the $4.9 million is non-23andMe business. Whereas in the prior year's quarter, we had significant contribution from 23andMe such that if you strip it out and compare apples-to-apples, you're probably looking at growth rate just in Q2 alone of about 78% off of adjusted pro forma revenue base stripping 23andMe revenues.

Okay, great. Thanks. I'll jump back in the queue.

Okay.

Thank you.

Thank you. Our next question comes from Nicholas Jansen of Raymond James. Your line is now open.

Hey guys, thanks for the time here. In terms of the professional base domestic HIV franchise, I think you caught out some headwinds associated with the new testing, or recommendations from the FDA. And just trying to get a sense of how large of a headwind that could potentially be over time, just trying to get a sense to make sure we're modeling that appropriately as we look to 2015.

I think Ron highlighted a couple of challenges there; the funding challenge particularly on the public health front is not new. And I think we have to look at it by segment. Our hospital business has been relatively stable and we would expect that. Actually business has been growing in the physician office segment and we do expect that segment to continue to grow. We also expect physician office testing to grow in total and the international components have been somewhat lumpy and I think we're going to see some of that impact in Q3 because we had nice contribution in last year from international -- a large international customer that's not going to repeat in Q3 of this year. Not that we've lost the business, but it's just the way some of these large government purchases go. The competitive environment and in particular the competitive impact of lab automation is an issue that we've been wrestling with. It's here to stay and I think that's going to continue to be a challenge on a go-forward basis. We mentioned in our prepared remarks the new CDC recommendation for laboratory testing of HIV and encouraging adoption of the laboratory-based automated analyzer fourth generation assays on slightly different confirmatory algorithm. So, that's the challenge that we're fighting. And at the same time, the benefits of rapid testing are clear and so many of our customers, they will continue to use the product, benefits of the oral application are clear. But we've got to understand what's going on in the environment and some of these things are somewhat out of our control.

Thanks for the color there. And then switching gears to the AbbVie agreement, under the enrollment into the patient support programs, just wondering to get a sense of how easy that is for the customers just to get a sense of how progress can be made towards some of these milestones payments that you are looking to achieve?

Well, I don't want to share everything that's going on from a competitive perspective. But we believe that collective offer is very compelling. There's nothing like a 20-minute test and knowing whether you're HCV positive or not. And receiving that news can be life-changing. And what we're trying to do is make it easier for both the patient and the provider to get through that process, to understand particularly today that being with HCV is something you can do -- you can do something about. And -- but first of all, you got to have that initial result confirmed and then you need to get connected with the appropriate individuals that can support you, counsel you, and help you decide what the best treatment options are for your specific situation. And that's what the patient support program is all about. So, is it easy or hard? Yes, it's all the above, but we think we've got the right approach to this and we've seen it in other disease state. We know in HIV space that we're intimately familiar with that when patients have support; they are more active follow-up on the things that they need to do to manage their infection or have get cured. They are more likely to be complaint with the treatment regimen that they ultimately select and so they are likely to have better outcomes. And that's what we're working to deliver across the Board to patients, the providers, and ultimately, the payers as well.

And I squeeze one more in terms of the balance sheet, may be this one might be for you Ron, but $80 million in cash on the balance sheet at the end of 2Q, I believe you get the $15 million cash payment from AbbVie in July or you already perceived it plus the Roche payment as well. So, you might have pro forma cash flow of around $100 million sitting there today pretty much earning very little. How do we think about your act to deployment that in an accretive fashions in the short to intermediate terms? Thanks.

Yes, so our goal clearly is to continue to pursue our business development opportunities and we're looking hard at opportunities that are complementary, be they technologies, products, and/or companies that we could bring into fold here at OraSure. So, that's the mission that we have been on for some time and -- but we're very careful on how we wanted to deploy those resources because we can sit on very precious -- but yes that's where our focus of activity has been.

Thanks guy, nice quarter.

Thank you.

Thanks Nick.

Thank you. (Operator Instructions) Our next question comes from Mark Massaro of Canaccord Genuity. Your line is now opened.

Hi guys. Thanks for taking the question. May be -- if we could may be discuss the $3.5 million to $55.5 million per year opportunity in front of you on the HCV test. How should we think -- how are you thinking about the number of folks who will opt in to the patient support system?

So, that's specifically defined in the agreement, but that has actually been redacted from the agreement that was filed as an exhibit to the 10-Q which was available to you today. So, I encourage you to get a copy of that to look at that. It gives a lot of good information about both parties' responsibilities and you can just assume that there's a scale and that is directly tied to the number of HCV positive individuals that enroll in the patient support program.

Okay, great. I'll take a look at it for sure. The other question related to opportunities potentially to sign a collaboration agreement outside the United States. I know you have a lot going on in the U.S. market, but can you may be share where you're at in terms of pursuing an international HCV collaboration agreement?

I don't have anything specific to report today, but we have had discussions and continue discussions about international opportunities. So, as soon as I have more report on that, I'll for sure do it.

Okay, great. And may just final question from me. Could you may be provide some more color on the opportunity with tuberculosis on DNA Genotek. How should we think about that as a potential -- even incremental revenue driver in the next couple of years?

Well, so understand that this is a pre-commercial product right now. But our tuberculosis collection and stabilization and sample preparation product offering actually includes two components. One is a reagent that stabilizes the sample -- the sputum sample upon collection and enables transport to a laboratory at ambient temperature, really any temperature for up to five days. And then a second reagent that once that sample is received in the laboratory and that sample then when received in the laboratory is able to be cultured and then is able to also then be processed for molecular analysis. We have a prep-reagent that's been added to the sample once it's received in the laboratory which actually enhances the assay sensitivity by yielding a higher -- generating a higher yield of intact DNA from the tuberculosis bacterium that's in the sample. This product has been in development for the last couple of years. It's out right now in the hands of researchers around the globe and we've -- we're seeing some very, very promising result. TB is a huge, huge problem. Every year there's more than a million people that die from TB and there's over 9 million people that develop new active infections on a global basis. It's estimated they are somewhere between 80 million to 120 million sputum samples that are collected each year and there's an estimated 600,000 people that are infected with multi-drug-resistant or expensively drug-resistant strains of TB and the cost of dealing with those drug-resistant TB strains is extraordinary and that continues to grow. Only one out of five active TB cases are accurately diagnosed and a lot of that has to do with sample collection, sample integrity when it gets into the laboratory and the archaic means of treating those samples when they get into the laboratory that beating method that the standard-of-care which really destroys a lot of the specimen and the material we're trying to diagnose. What we've developed is an elegant solution to these two problems. One, transport of a sputum sample and resource for environment where they don't have good cold chain, and then specimen ends up growing a lot of gunk and often times gets to the laboratory and is non-viable or can't analyze it. And then second a better way to break through that outer shell of the TB bacterium which preserves more of the DNA and enables better sensitivity in the laboratory particularly for low tighter samples. And all this is being validated. It can be a real game-changer we believe and we're working with organizations around the world to validate that, very excited about it, bog market.

Great. Thanks Doug and nice quarter.

Thank you.

Thank you. And our next question comes from Eric Criscuolo of Mizuho. Your line is now open.

Hi, good afternoon. Thanks for taking my call. Just filling in for Peter tonight.

Hi Eric.

So, on the NGO purchases for HCV, what percentage did they make up of international revenue?

We don't specifically call that out, but I would say it's well more than 50% of the international, Eric.

Got you. Thank you. And if I heard you right, I think you said that the HIV OTC shipments to retailers were up around 50% in the quarter, but retail sales were down 1%. Can you, kind of, may be explain why the shipments were up so much and may be the disparity between the shipments and sales?

Yeah part of it was some of our display volume that account for that and the rest is just some inventory management on the part of the retailers.

Okay. So, I guess you expect that to kind of moderate third quarter?

That would be our expectation.

Great.

Yeah, I think the inventory levels or the purchases Eric, are pretty much powering consumption. Although we have seen some indication that in some retailers as they are looking at their inventory levels, they may be ordering a little bit less than then consumption which under the new revenue recognition model results in lower revenues despite comparable consumption metrics.

Got you. And then just lastly just a clarification on the HIV OTC, did you say you submitted for CE Mark or you will submit?

No, we made our submission this past month.

Okay, great. Thank you very much.

Thank you.

Thanks Eric.

Thank you. That does bring us an end to the Q&A session of today's call. I will now turn the call over the Doug Michels for closing remarks.

Okay. I just want to everybody for participating on today's call and obviously for your continued interest in OraSure. Have a good afternoon and evening everyone. We'll talk to you next time. Good night.