Ladies and gentlemen, thank you for standing by. Welcome to the Quidel Corporation fourth quarter and full year 2008 conference call. At this time all participants are in a listen-only mode. Later instructions will be given for a question-and-answer session. (Operator Instructions) I’d now like to turn the call over to Mr. John Radak; please go ahead.

Thank you. This is John Radak, Chief Financial Officer at Quidel. Thank you for participating in today’s call. Joining me today is our President and Chief Executive Officer, Caren Mason and our incoming President and Chief Executive Officer Doug Bryant. Earlier this afternoon Quidel released its financial results for the three and twelve months ended December 31, 2008. If you have not received this news release or if you’d like to be added to the company’s distribution list, please call Shirley Chow with Porter Novelli Life Sciences at 212-601-8308. Please note that this conference call will include forward-looking statements within the meaning of Federal Securities Laws. It is possible that actual results and performance could differ materially from these stated expectations. For a discussion of risk factors, please see Quidel’s Annual Report on Form 10-K and subsequent quarterly reports Form 10-Q as filed with the SEC. Further more, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast February 25, 2009. 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. For today’s call Caren will begin with opening comments. I will report the financial results and then Doug will take a few minutes to address our general outlook for the near and longer term and then we’ll open the call to your questions. I will now turn the call over to Caren.

Thank you, John. I appreciate the opportunity to address our shareholders and the employees of Quidel for a final time as President and CEO. It has been a true honor and a pleasure to lead Quidel and to serve the board and the investors. During the past 4.5 years Quidel’s employees have worked tirelessly to reshape the point of care landscape by developing and improving lateral flow tests that provide clinical and economic value and validation. As a result of this successful work, Quidel has expanded markets, substantially retooled our business, grown price value leadership and gross margins. We have retained domestic professional rapid test market leadership in our key core products while organically growing global annual product revenue by $50 million and more than 10 million tests per year from fiscal years 2004 to 2008. While growing this business and adding critical investment in our go to market, research and development and production capability, the Quidel team improved operating margins from 2% of revenue to 22% of revenue, generated $78 million in cash from operating activities, enabling important investment and the repurchase of 4 million shares of Quidel stock, grew working capital from $50 million to $86 million and for our shareholders improved earnings per share from $0.05 to $0.58 from continuing operations. This team earned significant industry leadership awards from its distributor partners, including manufacturer of the year, supplier of the year and best value supplier several times over the past few years and this teams merited recognition as one of Forbes best 200 small companies for 2007 and 2008. I leave Quidel with the greatest administration for this team and confidence in the future under the leadership of our new President and CEO, Doug Bryant and a very involved and dedicated Board of Directors. Again, I thank you for your trust and confidence in the work of Quidel and its financial strength and promise. John.

Thanks, Caren. We are pleased with the overall performance of the business in 2008, especially given the greater macroeconomic environment. First I will summarize our fourth quarter results and then I’ll finish with a few additional comments on our full year and 2008. Starting with the financial results for the fourth quarter of ‘08, total worldwide revenues were $33.5 million, a 12% decrease over the same quarter a year ago. Our international business continued to perform well with revenue growth of 18% over the prior year’s quarter and represents roughly 20% of total revenues in the quarter. Sales of our infectious diseases products accounted for the majority of our international growth. On the domestic side, revenues declined 17% versus the fourth quarter of ‘07, largely due to distributor ordering patterns associated with our non-seasonal products as we have previously discussed. Looking now at revenues by product family, our worldwide infectious disease revenues increased 3% to $26.2 million compared to $25.3 million in the fourth quarter of 2008. Double-digit growth in our influenza and RSV product lines more than offset the expected softness in our Strep products. As you are aware the current flu season is tracking even later than last year’s season. Back in Q3, our expectations were for a more normal start of the flu season. In the fourth quarter of ‘08, revenue from our reproductive and women’s health product family was $4.5 million compared to $9 million, a decrease of 50% from the corresponding quarter of ‘07. As you may recall distributors significantly increased their purchases of our non-seasonal products in Q4 of ‘07. While we did not expect to see the same ordering pattern in this year’s fourth quarter, end user demand has remained relatively constant for these products for 2008 as compared to 2007. Revenues from…

Thank you, John. I appreciate the warm welcome I have received and look forward to continuing the momentum, Caren and the team have established at Quidel. Having been with Quidel now just 25 days, I do want to offer a few observations. First as many of you know, who have followed the company for the last several years, Quidel has a very well regarded reputation in the industry and terrific brand equity with our QuickVue brand. Second there has been and remains a dedicated focus on providing high quality products and supporting our key product portfolios with economic and clinical data. Third, our profitability and strong balance sheet provides us tremendous operating and financial flexibility. These strengths when combined with our leading market share position provide us with a solid foundation for future growth. Clearly there are short term growth opportunities with our current product portfolio. We plan to continue to drive greater market penetration and adoption of our seasonal products such as flu and RSV. In fact, recent data show that we continue to maintain very high share of the flu market and have gained share with RSV as well. In the back half of this year we anticipate launching our second generation fecal immunochemistry test, the QuickVue, FIT (Inaudible), broadening the product portfolio is a near term goal for our lateral flow immunochemistry platform. The number of addressable opportunities we are currently evaluating is significant. We have prioritized our product development efforts around existing markets, but are also exploring product that is will address currently unmet clinical needs. Beginning this year we intend to develop at least two to three new products per year and to continue to pace for the next few years. We see additional scalable opportunities for our lateral flow platform in infectious diseases as well as in bone health. For the longer term we are committed to developing a molecular diagnostics platform that will provide solutions for Point Of Care diagnostics. We are confident that the strategy of increasing market penetration with our current product portfolio, developing new products for our core lateral flow technology and developing a molecular diagnostic competency as we look to introduce new platforms, will provide consistent growth for the business, strengthen our leadership position and secure our future in the Point Of Care diagnostics market. That concludes our formal comments for today. I look forward to meeting our investors in the coming weeks. Operator, we’re now ready to open the call for questions.

(Operator Instructions) And your first question comes from the line of Keay Nakae with Collins Stewart. You may proceed.

Yes. Good afternoon.

Hi, Keay.

Hi, Keay.

I wanted to start with the operating expense. Obviously, you had a lower number there. John, you talked about a reduction in incentive comp. Beyond sales commission, what else might that statement include? Does that include bonuses or anything of that nature?

Yes, it includes both the company’s cash, bonus plan or incentive plan, the annual plan as well as certain performance based restricted stock for which the investing hurdles we’re not met.

Okay. So as we look at those line items going forward, how much of these Q4 numbers should we be using as a base? I mean R&D was down from where it’s been. Is this going to be the new level of spending there?

No. I think you probably ought to use Q3 as a better benchmark for looking at the future.

Okay and how about G&A, would that be similar or?

Yes.

Okay, very good. With respect to any expenses in Q1 related to the CEO search, is that something we should expect to see?

There will be some transition costs in Q1. Yes, Q1 will be impacted somewhat by that.

Can you give us a ballpark of the amount of incremental expense?

I mean, well it’s actually most that is relocation cost that’s already disclosed in Doug’s employment agreement.

Okay, very good, we can look at that; and then comment on how you’re feeling about the flu season. I mean and obviously we can see the CDC stats, the flu star stats, things are picking up here of late. How is that translating into your sales? It sounded like your Q4 flu sales were actually up respectively year-over-year, so where do you stand now?

Well, you’re right. Q4 was a decent quarter for flu. I guess I would remind everyone that the flu season in ‘07, ‘08 was late just like it is this year, so the performance in the business in Q4 of ‘08 is not really reflective of end user consumer demand. It’s more reflected of the size of the market and how much pre-season buying distributors are willing to do and physicians are willing to do.

I guess, what I was looking for, with respect to the Q4 result given the delayed on set of the flu season, can we read into that that you’ve had market share gains?

I think it’s too early to tell because we really won’t know. We always look at market share of end user consumption and so since the seasons delayed, we’re sitting here in Q1 waiting for the data essentially, the season end and to see the data. At this stage we wouldn’t expect there to be significant changes.

Well, I guess what I’m getting at is we’re seeing the up tick in flu activity, so if you’re not seeing a strong correlation in reorder sales, then that would suggest that that was over stocking by your distributors as opposed to market share gains.

I think Keay, maybe another way to look at it is that we haven’t seen the season peak yet and distributors are still used to the fact that the season used to begin in about week 48 to week 50. This year the season really began in about the second week of February, so as a result of that, you really have to wait to validate end user demand based on an entire season of use. What I can tell you though is it’s obviously an up tick going on now in end user use of the product, with so many more widespread and regional activity states in the last week and we believe in the coming weeks that are starting to use up these kits.

Okay, one final question for Doug, if I may. Doug, you talked about the pipeline of products outside of the redesigned FIT test. Do you plan on launching other tests this year?

We intend to make an investment in R&D; whether we’ll get products into the market this year, I cannot say. We clearly are in a position now though, to dedicate more R&D resources to the development of additional lateral flow products, both for existing markets, as well as examining what unmet clinical needs we might address, particularly in infectious disease testing and finally Kay I would say that over the next 60 days, I think we’re going to be prepared to have a discussion on exactly what that product pipeline looks like.

Okay, very good. Thank you.

Thanks Keay.

Your next question comes from the line of Zarak Khurshid with Caris & Company. You may proceed. Zarak Khurshid - Caris & Company: Good afternoon.

Hey, Zarak.

Hi, Zarak Zarak Khurshid - Caris & Company: Hi, guys. First question, I’m a little bit confused on the gross margin line despite what appeared to be a decent year-over-year and I think sequential increase in flu sales, the gross margins were still down fairly significantly. What exactly is going on there?

Well, we had a pretty significant increase in international business and as you know our international gross margins are lower than domestic ones. So, that was the biggest driver there. Zarak Khurshid - Caris & Company: So are international flu margins below the sort of corporate average?

Yes.

Yes. Zarak Khurshid - Caris & Company: Alright and then on the tax line, it looked like there might have been a credit there. Can you just walk us through that and how we should be thinking about taxes this year?

Yes that, so we had some one-time items flow through in the fourth quarter, including the R&D item, and so I think going forward in the future, you probably won’t see some of those items and so I think looking into ‘09, you’ll probably see a tax rate closer to what we’ve been booking at earlier in ‘08. Zarak Khurshid - Caris & Company: Okay, great and then I was wondering if you could provide a little color on the Strep product, in light of kind of the late flu and cold season, how is that business tracking?

Well, I think our Strep business as we talked about earlier has been a little bit lumpy and our focus has really been in trying to get our end users that have tried a private label product to come back to our premium branded product and we are having some success there, but in terms of the season itself, we haven’t seen a lot of Strep yet and so even though Strep isn’t always mirroring or parallel with upper respiratory infectious disease season. This season especially I think we’re seeing a little less Strep. Zarak Khurshid - Caris & Company: Okay, thank you.

And your next question comes from the line of Un Kwon-Casado with Pacific Growth Equities; you may proceed.

Hi, good afternoon.

Good afternoon.

I was wondering with respect to your two new products per year, how does bioMerieux factor into this?

Well, it’s part of an ongoing discussion around a joint development agreement. We are working with them to identify good product that we might develop for them. So, we have not actually factored in anything that we’re working on for them into what I was discussing on in term of the two to three products per year. So, two to three products per year by our own development team, coupled with what we would do additionally with bioMerieux.

Okay, that’s helpful and so I guess how the development in the types of market that you would address be different between your own efforts versus partnering with bioMerieux?

Well, and the bioMerieux case, we will work together to identify things that they think are valuable in the markets Ex U.S., so some of those might be applicable as well to the United States, but given that they’re the distributor, ex U.S. they’re obviously going to be focused more on what their needs are there. In any of the things that we currently are developing, sort of on our own, potentially can be offered to bioMerieux for distribution as well.

Okay, great and then I wanted to touch upon; you had talked about a lab in a tube test, what is that exactly? I think that was related to your, iFOB test. Is that a new format and where it’s outside of lateral flow?

No, there’s still lateral flow strips in immunochemistry associated with this test. This is a self developing test that requires almost no intervention or support or running of the test by lab or office personnel. So, at the J.P. Morgan conference we started talking about the generation two fecal immunochemical test and what it look like. We had referred to it earlier as being almost medical device like and so we’re starting now; as we get closer to finalization, we are starting to talk more about this test, its capability and the fact that the format has the potential for other test uses and is also, we believe a good candidate for OTC.

Okay, great thank you and then just lastly, just to go back on R&D spend in ‘09; to me qualitatively it sounds like you’re accelerating your efforts in this area, especially if you’re expecting to come up with two to three new products. So, again the I guess the Q3 run rate, is that a fair number to use John or should we be a little bit more aggressive in modeling that?

Yes, you probably should be a little more aggressive in modeling specifically the R&D number than that. Excluding the incentive comp issue, we would have seen R&D probably more along the lines of what we saw in the fourth quarter of ‘07.

Okay great and then just one quick one if I may, just a housekeeping one. So on the amortization of intangibles; I know in your K you break that out, but that is going to decline to about $1.4 million this year. So, that should we just amortize that equally over the quarters?

Yes, that’s correct.

Great, thanks very much.

You’re welcome.

And your next question is from the line of Ashim Anand with Natexis Bleichroeder. You may proceed.

Thanks. First of all, welcome Mr. Bryant, welcome to the team.

Thank you.

And congrats Caren for a great job for the last four years.

Thank you.

Could you give us if you have inventory level in the fourth quarter? From the balance sheet if you have that available.

Our inventory level. Yes, its $11.7 million.

CFO, cash from operations, do you have that for fourth quarter?

Yes. Well, for the twelve months, for the year it’s $28.9 million.

Okay just something on pricing on the flu and the Strep and pregnancy products has there been any change in that recently this quarter?

No. I mean the market as we have indicated before is a competitive market, but no significant changes. We continue to work at maintaining a premium price position, so it hasn’t really declined.

Okay, wonderful and the final question would be I know you’ve said in some of the recent presentations Caren that penetration of flu test is around 26%. I was wondering if you have a ballpark number for physician office labs at this point.

Well yes, it is difficult. I would say at this point physician office labs, I would say anywhere between 25% to 33%, penetrated. There is still a great opportunity for the expansion of more certainty around diagnosis of influenza and there continues to be concern especially in this season where we have two compelling issues; one is that we have a B influenza that is not matched to the vaccine and we also have resistance to Tamiflu for H1 and 1. So we’re seeing physicians more interested now in using differentiated tests to be absolutely certain and they’re properly diagnosed, especially since unfortunately recently we witnessed some pediatric mortality.

Okay and going forward, obviously we haven’t seen the future, but physician office labs would be greater opportunity in terms of penetration than hospitals? Do you agree with that or…?

I do.

Wonderful. Thank you, guys.

Thank you.

Thank you

(Operator Instructions) and your next question comes from the line of Steven Crowley with Craig-Hallum Capital Group. You may proceed.

Good afternoon.

Good afternoon.

Good afternoon, Steve.

First of all Caren, thanks for all your efforts over the last several years and good luck to you in whatever endeavors you may have out there.

Thank you.

And Doug, welcome and we look forward to you being able to quickly and aggressively build on what Caren and the team have done there.

Thanks, Steve.

A couple of questions for you; it seems like qualitatively the RSV product has been a nice fit in your product line, can you give us a little help as to understanding how significant a product it’s becoming, what kind of potential there is for RSV. Just back of the envelope is it a couple percent of sales now and can it be much more than that over a period of time?

I mean I think it’s in that neighborhood and certainly we think there is opportunity to continue to grow that product line faster than the rest of the business.

Yes, I think Steve, the RSV product for us especially as of late. This is our first season for our CLIA product being marketed into the physician office lab and preliminary data for fourth quarter shows a really nice bump in end user demand for the products. So, I think RSV for us definitely has major focus. You may have noticed that we have announced a couple of what I would call value added services around RSV. Those can be found on our Quidel RSV website, where we are assisting both moms around their symptomatic concerns about their children, as well as physicians and the use of the test. So, we are dedicating resources and we are focusing heavily on RSV, especially in a physician office lab and also in acute care.

So, with it being maybe again a couple of percent of sales, a couple of million dollars or so product right now, I think in the past we’ve talked about there clearly being a runway for that to be a $10 million plus product for you. What are the key things that need to happen at Quidel and/or out in the industry for that to take place?

Well, I think that as I said, there’s a lot of outreach going on. There is also work being done on side-by-side comparability in terms of the value added test and how it stacks up in terms of accuracy and in terms of sensitivity and specificity and we’re going to be releasing some of that data later in the season. We have posters coming out at a number of conferences. There is actually a presentation made being made in Bangkok around this at this time and that information we believe to show the clinical excellence of the product in comparison to the competition, as well as the fact that it is a wonderful companion product to our influenza product, which is by far the most often used in the physician office for pediatric cases.

Thank you for that; and then in terms of influenza, the clear impression we’re getting is that despite there being a late start to the flu season and a mild start, that influenza was up year-over-year in Q4, the million or two dollars I guess. I just want to make sure we’re in the ballpark of understanding the order of magnitude, because the more important question is as we look at Q1 and the cross currents of some economic pressures maybe inhibiting some patient visits to get tested, but a recent flurry of media reports about the severity of flu and pediatric deaths may be offsetting that and flu blossoming, it would seem like there is the recipe for flu to grow Q1 of ‘09 versus Q1 of ‘08. I guess that’s my long winded question there. How possible, probable is growth there and could that growth be pretty meaningful?

We haven’t seen the peak yet, Steve. So, we can’t really predict that. We also can’t predict how moms are going to deal with these symptoms in terms of going and paying those co-pays at the physician offices. One thing, though, that I would give guidance around is we believe because of this very late start, that we’ll probably see some bleeding into Q2 for influenza sales. Though we think that the season is going to go longer and so you have a Q1, Q2 dynamic here, no peak yet, but most likely we’re going to see some of that going on. So later means, later enough to even impact Q2.

I guess the other variable for year-to-year growth in the infectious disease category as a whole in Q1 ‘09 verse Q1 ‘08 would be the contribution of Strep in Q1 of ‘09 verses Q1 of ‘08, and are the prospects for a pretty decent contribution for Strep there after a couple of tougher quarters or is that a very open question mark?

I think again we really are focused on end user demand. Some of the promotions that we ran under what we talked about the strategic alliance program have now we feel we have invested appropriately so that we get the, I guess reap the rewards of those programs. So, you’re going to see a demand cycle that’s going to be totally driven by end user need.

Okay and in terms of the bigger picture stuff or in some of stuff you mentioned Doug, I’m absolutely thrilled to hear that the company is moving down the path of a commitment to a couple of three new products every year. It also sounds like we’re going to get some visibility on a couple of those initial efforts in the not too distant future. I have to believe, that that’s going to require at least the kind of 9% R&D budget that you guys have had here. I guess it was 8.7% last year, it was a bit higher, but using a lower run rate of around $3 million, does that get us there or do we need to think about this more in percentage terms?

Well, I think we’ve got a couple of things going on in the R&D organization and I think a lot of it in terms of percentage terms depends upon what you’re looking at in terms of top line growth as well obviously, but I think the $3 million run rate in Q4 of ‘07, we might be a little bit north of that going into the latter half of ‘09.

Okay and then my final question. Doug, it relates to your commentary that included unmet medical needs in terms of a focus for your new products. That has the flavor of products that are not “me too” for sure, have a proprietary bent to them. Does that significantly extend the development time or do you think you can have a pretty decent philosophy to these product development and product launch initiatives?

I believe the development time around those specific products, at least the ones that we’re looking at right now Steve, is not significantly extended. The time to market or the time to develop the market may be a little bit longer, but in terms of the actual development of the product, I don’t see that as being the issue.

The two initiatives or the two kind of big picture initiatives of new products, unmet medical needs and molecular diagnostics Point Of Care, are those two separate initiatives or I trust at some point they’ll be overlapped?

Well, as you and I talked a little bit in a previous conversation, we’re interested in scalable development, so that overtime what we have is not only products that fit the same channel from a commercial perspective, but also products that are developed in a fashion that takes advantage of our organizational learning, so that we have one product followed by another that looks a lot alike. Then in addition, I would say that from a manufacturing perspective we’re also interested in making sure that we have a scalable pipeline. So therefore, yes, we would see that the two ideas are going to converge overtime.

Great; looking forward to some details. Thanks for taking my questions.

Thanks, Steve.

Thank you.

Your next question comes from line of Keay Nakae with Collins Stewart. You may proceed.

Yes, hey. I just wanted to push back on you guys a little bit regarding the flu season and with the understanding that there is some economic uncertainty this year, which might change the normal way we think about increased activity as it correlates to your product sales. So we’re seeing the increased activity now and grant that we don’t know where it’s going to peak out or how long it’s going to last, but more definitively are you starting to see a meaningful increase in reorder rates?

Well, at this point, it’s just beginning and maybe I can explain it this way best, Keay. When we really win at the race in the flu season, is when all of a sudden everything across the country, meaning the regional and the widespread states are all 50, okay and then there is more widespread and there is regional, we’re not there yet. When that happens, then we do really well because we’re ready. We don’t back order; everything gets out in time; and that last year, we could already talk about in the middle of February. This year we can’t talk about it to that level because we’re not there yet in terms of the experience out in the market. So, but when it happens, I guarantee you that we’re ready and we have primed the market very, very well by expanding markets, expanding customers, expanding opportunities and proving value, when we first started talking about flu to the end users in Q3 and then more again in Q4.

Okay, I appreciate that answer.

You’re welcome, Keay.

Well, this concludes the call for today. Caren, John and I thank you all again for your time this afternoon and for your continued support. Take care.

Thank you. Bye

Thank you for your participation in today’s conference. This concludes your presentation. You may now disconnect. Good day.