Good afternoon, everyone, and welcome to OraSure Technologies’ 2015 First 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. [Operator Instructions] OraSure Technologies issued a press release at approximately 4:00 PM Eastern Time today regarding its 2015 first 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 archived of this call until midnight May 13, 2015, by calling 855-859-2056 for domestic or 404-537-3406 for international. The access code is 1942338. 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 remarks, 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, 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, 2014, 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. As indicated in our press release 2015 is off to a very good start. Our first quarter financial results exceeded our guidance on both the top and bottom line. Our molecular collection systems business delivered another strong quarter with revenues up 17% over the prior year period. Sales of our OraQuick rapid HCV test increased 39% over the first quarter of 2014 and this represents 24% sequential growth from Q4 of last year. Together with the $3.3 million in exclusivity payments recognized under our HCV agreement with AbbVie, total HCV related revenues were $5.5 million for the quarter. The revenue growth along with prudent expense management generated a slight profit for the first quarter. Later in call I will provide an update on our HCV business developments at DNA Genotek, the progress we've made on our new rapid Ebola test and the performance of our in-home HIV test product. So with that, let me turn the call over to Ron for his financial review.

Thanks, Doug and good afternoon everyone. Our first quarter 2015 consolidated net revenue increased 15% to $27.1 million compared to $23.5 million reported in 2014. Our consolidated product revenues of $23.8 million increased 1% largely as a result of higher sales of our molecular collection systems, OraQuick HCV and intercept products. Other revenues were $3.3 million in the current quarter and represent the recognition of exclusivity payments under the AbbVie agreement. We did not record similar revenues during the first quarter of 2014. Our overall infectious disease testing revenues increased 4% in the first quarter of 2015 compared to the first quarter of 2014. Total HCV related revenues, including the recognition of AbbVie exclusivity payments, increased 252% to $5.5 million in the first quarter of 2015 compared to $1.6 million in the first quarter of 24. Our HCV product revenues increased 39% to $2.2 million in Q1 from $1.6 million in the prior year. Sales of our OraQuick HCV professional product in the domestic market increased 81% in the first quarter of 2015 to $1.2 million from $663,000 in the prior year. This increase is largely due to the addition of new HCV customers and higher sales to current customers who have expanded their HCV testing programs. Our international sales of our HCV test in the first quarter of 2015 increased 8% to $972,000 from $896,000 in the same period last year, primarily due to higher sales into certain Asian markets as a result of regional expansion, partially offset by lower sales to Europe. Domestic sales of our professional HIV product decreased 9% to $6 million in the first quarter of 2015 compared to $6.6 million in the first quarter of 2014. This decrease was a result of customers moving to some other testing, the fourth-generation automated HIV immunoassays, price…

Thank you, Ron. Our HCV business continued to grow in the first quarter with 24% sequential growth and 39% growth over the first quarter of 2014. We shipped products to over 460 customers during the first quarter and 86% of our revenues came from repeat customers. We also added 64 accounts during the quarter that had not previously ordered HCV test from OraSure. As you know, a major focus of our HCV business has been and will continue to be our copromotion agreement with AbbVie. We’ve been pursuing several major initiatives under this collaboration. As we have executed against each initiative, we gained important knowledge and adjusted our strategy in response to evolving market conditions. The market for HCV drug therapies has been developing very rapidly during the last year. As you might be aware, decisions today regarding which pharmaceutical products will be most accessible to patients are often influenced by insurance companies and other payers. In many cases, in an effort to reduce costs, payers negotiate discounted prices for drug therapies in exchange for giving those therapies a preferred or exclusive status on their formularies. Not surprisingly, the competition among HCV drug manufacturers to secure this favorable formulary status has been intense. This competition and the outcome of these negotiations influence where manufacturers focus their resources in order to provide the highest potential yield of new scripts for patients. These developments have affected our copromotion efforts with AbbVie. One example of this is our largest initiative directed to primary care and specialty physicians. Our approach under this initiative has been to combine detailing by the AbbVie sales force with our promotional activities through several large med-surg distributors and manufacturer representative organizations or MROs. As a result of increased focus on its new HCV therapy, AbbVie reduced the physician detailing…

[Operator Instructions] Our first question comes from the line of Shaun Rodriguez of Cowen and Company.

So first on HCV, just an update here, so last quarter you talked about two sizable public health orders didn’t materialize as hoped in Q4, you talked about expecting these in the first half. So to clarify, were either of these in the Q1 report – are either of these reflected in Q2 guidance?

One was in Q1 and we expect the second to be reflected in Q2 guidance.

And so it didn't look like – and obviously you did see a sequential increase in Q1 over Q4. But I guess – can you just give us a sense of the magnitude of the contribution of that order?

We generally don't break out specific orders but as you highlight we saw good growth both quarter on quarter as well as sequentially in both the domestic and international markets. Domestic in particular on a quarter-on-quarter basis grew over 80% versus 2014. Domestic was up over16% sequentially. So as I think we spoke about after last quarter's call, our objective and we’re quite confident as we’re going to continue to see a sequential growth through the remainder of 2015 and most importantly significant sequential growth in the domestic market as a result of all these different initiatives we have going on.

Maybe ask it a different way. Is the magnitude of the second order comparable to the magnitude of the one that already was recorded?

Once again we’re really not going to comment on the magnitude of the different orders. I mentioned those two because they were orders that we were expecting in Q4 that didn’t materialize and we wanted just to explain that.

That’s fair and somewhat related but on the sales and marketing that looks obviously a significant sequential drop. So the question here is about whether -- given the changes in AbbVie’s those called out [ph] efforts at least in the first half of the year, was the AbbVie component of your spend there were dropped off? If so, how do we think about that and if not, what underlying there explained the sequential downtick in sales and marketing?

So the sequential downtick, Shaun, was in fact partially related to our activities with AbbVie and related expenditures, so costs associated with detailing were probably down and as we talked about even on the calls late last year, there were some expenditures that were associated with the start-up of various support activities that we engaged in during the latter part of 2014. And so that was also to be expected. So that’s pretty much the answer.

Thank you. Our next question comes from the line of Brandon Couillard of Jefferies.

Hi this is Kate [ph] in for Brandon. Back on HCV, can you comment on the doctors that you had previously mentioned had completed training. I think there was over 600. Have you seen any orders from them or would that be something you expect once AbbVie returns to detailing in later this year?

I think – so the answer to that is indeed, we’ve seen increases in new accounts start as well as increases in orders. And as AbbVie comes back into more diligent detailing of our product and the patient support program in the back half of the year, I would expect we’re going to see improvement at that time as well.

And likewise, is the sales tied pretty closely with the ability to sign people up into this patient support program or was there – can you comment on any – how the patient support program has added value to date?

We haven't given any specific numbers to that and that’s intentional given some of the constraints related to that aspect of our copromotion agreement but we have seen increasing numbers of individuals enrolled into the patient support program. Those numbers are increasing at an increasing rate and we expect to see significant increases over the next several months and obviously through the remainder of 2015. We have this pretty well scheduled out and we’re working against our own internal targets in that regard and as you know there's incentive payments tied to the enrollment of individuals into the patient support program. We’ve indicated previously that we do intend to achieve at least the initial incentive payment during 2015 and that’s still our objective.

And one last one, just switching over to the Genotek business, as you continue to add commercial customers, can you just comment on how the overall margin of that business should turn?

I would say that the margin is still in the GAAP 70% range from a GAAP perspective and of course there are non-cash charges included in the cost of goods sold there related to amortization of some of the intellectual property that we acquired upon acquisitions. So if you strip that out, and look at really what the cash flows and margins are, some of that incremental business is coming in, in around 80% gross margin range for us.

Thank you. Our next question comes from the line of Peter Lawson of Mizuho Securities.

Just wondering if you’d go back to the HCV testing detailing by AbbVie, and what gives you the confidence that it would return in I guess Q3, that’d be helpful?

I am sorry what gives you the confidence that it will return in Q3 – oh, I am completely confident that they are going to return in Q3 for several reasons, not the least of which is we’re planning that together, number one. Number two, as part of the contract that we have, there's a minimum number of details that AbbVie is obligated to perform on an annual basis. They don't specifically state when in the calendar year, those need to be completed and the agreement was structured that way, anticipating some of the uncertainty as to how activities would play out in the marketplace. So we are in literally daily contact with our AbbVie counterparts, planning and executing on all aspects of the copromotion agreement. So this is part of our plan and it’s considered and planned jointly.

But how far are we through that, that range of test detailing that they have to do for the year?

For 2015? Hardly started on their contractual obligations.

And then I mean that’s why you think you will see that inflection point around HCV as that detailing kicks in?

Well that and the other initiatives that I described in the prepared remarks this year.

Also just to comment on that with respect to the detailing, Peter. So that will skew the expenses associated with that for us towards or into the second half of 2015. So for modeling purposes the expenditures associated with that detailing effort will be nested within the second half of the year. The sales and marketing should step up from the Q2 levels into Q3 and Q4.

Have you seen already sort of traction from initial detailing? Can you kind of correlate that detailing with the sales?

Somewhat and obviously our objective is to continue to drive efficiency and yield through those activities, through follow up and deployment.

And is that a month or two delay or is it several days?

No, it's generally a function of weeks, until we start to see contribution.

[Operator Instructions] Our next question comes from the line of Mark Massaro of Canaccord Genuity.

So on the DNA Genotek side, I saw one of your customers in a New York Times article in April, and with respect to breast cancer. So I’d love to kind of hear your thoughts on some of the incremental opportunities you’re seeing both in breast cancer and reproduction genetics. I’d love to know perhaps how many customers you have within the pharmacogenomics umbrella and maybe an idea of your funnel and how you think that this just might accelerate?

So as we look at pharmacogenomics it goes across a pretty broad marketplace. So we have customers in pain management and psychiatry -- psychiatric drugs and I would say we have at least half a dozen major customers who have a large national business and what we’re seeing is very nice growth from those existing customers. We’ve actually added a couple of new customers over the last quarter in that space. And I think as more and more physicians understand the power of doing some of these genetic profiles as a way to guide their therapeutic decisions, we’re just going to continue to see more and more utilization. And DNA Genotek as I mentioned in the prepared remarks is in a great position particularly in the breast cancer screening market for BRCA testing to capitalize on all of this interest. We think that the vast majority of companies involved in BRCA testing are now using the Oragene collection system as their primary sample collection stabilization product.

Would that even include some of the reference labs both regional and larger?

Yes.

And then on hepatitis C, Doug you talked – you gave some good color on the competition to get into formularies and so forth. So it sounds like you expect the competitive noise perhaps to wind down over the next quarter or so. Would just love to hear your thoughts on how this noise, if you will, has impacted your expectations to maybe to hit one or more milestone payments? And I know you’ve communicated that you expected at least one. So I am just curious to hear your thoughts on expectations around milestone payments this year?

I think I've stated that is still our expectation that we will achieve at least one of those milestone payments. So our thinking on that hasn't changed and relative to the formulary discussion, I really think – I am only uncomfortable talking about that. I think that's a better question asked to AbbVie CEO in their earnings call or the other folks that are involved in selling to the payers and the managed care organizations. But nonetheless the competition for covered lives has been intense and once those formulary decisions get made, both Gilead and AbbVie in today's market are in hand-to-hand combat to secure as many of the treaters who control patients that where either AbbVie or Gilead can have access to those patients. The way these formularies work is a formulary can give preferred status to one or more of the drug companies but it's not necessarily mandatory. There may be excess opportunities for either of the drug companies to capture some of that business even – when they are not on the preferred drug list. So it's been intense and that’s required a lot of effort and energy, a lot of focus on the treaters by AbbVie and that's expected. We do expect that that's going to settle down in the back half of the year and based on our planning we expect they’re going to get back refocused on detailing our test and driving the rapid diagnostics.

And maybe my final question. With 90 million in cash on the balance sheet, could you maybe comment on some of the opportunity to acquire other businesses and would be curious to what extent are valuations at attractive levels or as you look at potentially to acquire businesses, is it a matter of maybe the technology or the subsector that it operates in, just curious on how maybe this -- that environment has changed in the last quarter or so?

Well that’s a great number of questions embedded in that. So I will try to attack it as best I recall it. And so there are some very interesting opportunities out there, to be honest, Mark and we’re excited. So it doesn’t mean that everything is perfect but we have seen a number of different interesting opportunities. They are as we discussed previously more in the molecular diagnostic space and so it would be somewhat adjunctive to the DNA Genotek activity. We want to look at opportunities that are not research projects, so more towards commercialized opportunities or near commercialized opportunities that are not going to push us backward away from our goal of profitability for 2015. And so we continue to work very diligently but maintaining our discipline and making sure that we hit the criteria while bringing in hopefully products and technologies or companies that would be complementary to what we are doing.

Thank you. Our next question comes from the line of Jose Haresco of JMP Securities.

Just housekeeping items. Could you remind us of what our expectation should be for the pace of AbbVie co-promote payments for the remainder of the year?

So the amortization of the exclusivity payments if that’s what you are inquiring about – would be approximately $3.4 million recognized each quarter over the balance of the year and actually through the balance of the contract period. And as far as the payments to them for their detailing, although we’ve not disclosed what those amounts are, I think as Doug indicated we’re really in the early stages of our commitment to that effort in 2015 here. So some of those expenditures will be in the latter part of the year.

Turning to the HIV business, you noted that the decline was competition towards fourth-generation molecular testing, timing of certain orders and one other factor – yes, competition. Could you help us parse out which one of those was the dominating factor, if any, number one? And number two, are you expecting the pace of the declines to be similar to what we saw this quarter or are you guys thinking about more of an acceleration as we get towards the back end of the year?

I think it's difficult to predict. If you go back to Q4 we saw Q4 was pretty much flat versus the prior year. And if you look at the different segments within our HIV professional numbers, you kind of see that type of variation in the first quarter results. So the public-health number quarter on quarter was relatively flat. We were down in hospital and a little bit in the physician office area but we were up substantially in the international space. Actually international had one of the strongest quarters that we've had in quite some time. And I would expect that as we move out through the year we’re going to see some variability in that regard.

Turning to the HCV business, could you help us understand what happened with some of the more - with the trucking group and why that didn't quite pan out the way you thought? And what is it about some of these other employer groups that you are looking at, that makes them perhaps little bit more amenable to a direct approach?

So that's a good question and we tried to give a little bit of color to that in the prepared remarks. What we learned particularly in the transportation and trucking industry is there is a substantial proportion of those lives were covered under formularies that that weren't necessarily favorable to AbbVie and I think that as we go through and evaluate other employers or employer groups we can identify those where that situation is a little more advantageous for AbbVie and consequently provides an opportunity for us to work together to promote our rapid test within those groups.

Our next question comes from the line of Nicholas Jansen of Raymond James.

Not to beat the dead horse on this AbbVie discussion, but when you gave guidance in early February, I think by that time we kind of all saw the headlines and news surrounding kind of formularies, you saw Express and CBS all announced their decisions. And I guess the question is when did AbbVie decide during 1Q that were not going to be detailing? So I just want to get a better sense of when this happened and kind of little bit more detail on, why all of a sudden 3Q that you think some of these battles aren’t going to be taking place because it's my understanding that you have more therapies coming out next year and certainly just wanted to get a better grasp of that, acknowledging that there are some minimum commitments to be had?

I don't think that there's been any change in our messaging, actually Nick. I think that we've been making decisions -- AbbVie has been making decisions on a real-time basis and these kinds of decisions in the marketplace are dynamic and as I mentioned just because a drug gets preferred status on a formulary doesn't mean that the other drug manufacturer doesn’t have access and a lot depends on what the patient profile is and what the regional differences are in those formularies. So I think the formulary question, like I have stated earlier is probably better directed to AbbVie but it certainly has some impact in where we focus and where we target our activities either in different segments or on a regional basis.

Ron, on gross margin, some of it might have been related to cryo being weak year over year but you did roll off on the we [ph] royalty. Just wanted to get your thoughts on gross margin, it’s kind of the second consecutive quarter when you strip out the exclusivity payment where you might have at least met our expectations and any color there would be helpful?

So we did as you quite rightfully pointed out, we did have a step-down as a result of reduced cry sales in the professional marketplace. We also actually had under-absorption due to some of the weather-related closings that we had up here in the Northeast during the first quarter which probably cost us about a little over a percent in gross margin points. And beyond that we had some lower margin sales of the HCV products outside the US to a couple of distributors that are more located in the Asian region and that I think would really account for pretty much all of that, Nick as far as why we might be bending a little bit lower than your expectations.

And then lastly from me, just kind of looking at your portfolio as a whole, going back the last couple of quarters, if you strip out the exclusivity payment, product sales year-over-year really aren't growing. I don’t think – at least the 2Q guidance doesn’t show much growth kind of at the midpoint, same with 1Q actual, I think if you strip out the OTC HIV timing in 4Q from the prior year, it kind of showed no growth either. I know you have some growth anchors in HIV and some of the other segments. But when do you think you’re at a point of time where DNA Genotek and HCV are big enough contributors that can offset some of the legacy pressures and is there any ways to potentially monetize these legacy businesses if they're not necessarily contributing to overall shareholder value creation?

Well I think you are highlighting one of the challenges and that is that the good growth in HCV, the good growth in DNA Genotek, the good growth that we saw on our first quarter with SAP, contribution from Ebola, was in this quarter offset by substantial difficulties in the cryo business and generally we haven't seen that kind of a challenge with the cryo business. So unfortunate but that was the quarterly experience that we had. HIV professional was down a bit. HIV OTC, right, it was down quarter on quarter if you look at first quarter 2014 versus first quarter 2015, but it was actually up slightly on a sequential basis. And that'll play out and that will resolve itself as we move through 2015 because our expectation is that the HIV OTC business is going to grow. So I think it’s one of the situations where we keep – put on the gas with hepatitis C. DNA Genotek continues to deliver. We've indicated that our SAP business is going to grow this year and quite frankly that the first quarter of the SAP business was our best first quarter in many years. DNA Genotek’s first quarter was the best first quarter they’ve ever had and one of their top three quarters ever. So this good performance in those businesses unfortunately masked a bit by the challenge we had with cryo in the first quarter. I think as we move through ’16 and ’16 and beyond that.

Just to clarify and expand a little bit on that. Nick, I think the cryo issues are likely to be with us for a little bit here. So Genomma, our distributor in Latin and South America - Latin America, South America has definitely had challenges that they are wrestling with, as you may have read about. And so I suspect that we could see the weakness on the cryo line for 2015 compared to where we were in 2014. End of Q&A

Thank you. And that brings an end to the Q&A session of today's call. I will now turn the call over to Doug Michels for closing remarks.

Okay. I just want to thank everybody again for being on the call this afternoon, for your continued support of the company as well as interest in the work that we’re doing. I hope you all have a great afternoon and a good evening. And we will talk to you soon.