Ladies and gentlemen, thank you for standing by. Welcome to the Quidel Corporation second quarter 2009 conference call. At this time all participants are in a listen-only mode. Later instructions will be given for the question-and-answer session. (Operator Instructions) I would now like to turn the call over to Mr. John Radak; please go ahead.

Good afternoon everyone. 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, Doug Bryant. Earlier this afternoon, Quidel released financial results for its three months ended June 30, 2009. If you have not received this news release or if you’d like to be added to our company’s distribution list, please call Shirley Chow, 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 review the Quidel’s Annual Report on Form 10-K 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, July 22, 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, I will report on the financial results and Doug will provide some color on our market share, give an update on our new product development activities, discuss some recent additions to our team and finally provide an outlook for the remainder of 2009. We will then open up the call to your questions. We had a significant benefit during the quarter from the recent outbreak of flu around the world. As the incidence of influenza like illness increased globally, awareness of the availability of rapid flu tests emerged. As a result, we supplied to several new international markets. In addition as domestic inventories were drawn down, we began to ship our QuickVue…

Thank you, John. In the first quarter we recorded abnormally low flu test sales as a result of a very late and mild flu season, and began the second quarter with excess flu inventory in the domestic distribution channel, but by the end of April, we were faced with an almost entirely new set of short-term business challenges as the demand for QuickVue A+B accelerated, first in international markets, then here in the United States. While we never stocked out, our inventory became very nearly depleted causing us to restart our manufacturing processes. Since then, we’ve been manufacturing at full scale and have shifted our focus to our flu test supply chain and to ensuring we can meet our customers’ needs during the next season. I believe that’s a testament to the strength of the Quidel management team and to our employees that we so quickly responded to these changing market conditions and were able to meet the demands of our customers worldwide without fail. Overall, I’m very pleased with how the business performed in the second quarter. In understanding our market position as we move from a period of increased non-seasonal demand for flu tests to Q3 and Q4 when flu tests are typically ordered, we commissioned a survey of the physician office lab market to assess end user purchasing behaviors, comparing the 2008, 2009 season with the 2007, 2008 flu season. An independent research firm randomly contacted over 300 pediatricians, internists and office managers. Of those who currently use the flu test, the research showed that 74% use our QuickVue brand of influenza tests and of those, 73% are now using QuickVue A+B. This is a shift from the previous season when a little more than 60% of QuickVue users were testing with the A+B product and interestingly,…

(Operator Instructions) Your first question comes from the line of Zarak Khurshid with Caris & Co. Zarak Khurshid - Caris & Co.: Hi guys. Good afternoon. Thanks for taking the questions. Nice quarter, nice rebound. To what extent do you think the new international business will be kind of ongoing and consistent once we enter the flu and cold season; and maybe if you could just describe who those customers are?

Well the experience in the second quarter enabled us to establish relationships that we had not had previously. It also enabled bioMerieux to become quite active in promoting flu in advance of the upcoming season. So I would expect that going forward we could benefit from the activity that we started in the second quarter. Specifically, we shipped a great deal of product to Mexico in the quarter. We now know that they have reordered and we also shipped product to countries in Europe, but those were countries that typically already had, as well as Argentina and Brazil and in addition, I think we shipped to a couple of the South American countries as well. Zarak Khurshid - Caris & Co.: Great. Doug could you just remind us some of the changes that you instituted with the I guess the sales force that allowed you to kind of better gauge what’s in the channel and if you’ve made any other types of changes to the infrastructure over the last quarter?

The most significant change we made was the processes that John and his team and the finance organization put together with our folks in order entry, to ensure that each order that we get from our distributors more closely matches out sales. In a couple of instances so far we’ve actually gotten back with individuals on orders and have either changed them or actually canceled them. So we know the system that we’ve put in place actually works. In addition, in terms of actual commercial infrastructure, we’ve recently created a small managed care organization team and they are primarily focused on the State of California and the HMO and IPA segments. Zarak Khurshid - Caris & Co.: Great, thank you.

Your next question comes from the line of Keay Nakae with Collins Stewart; please proceed.

Yes, good afternoon. Dough, through July are you still seeing meaningful pull through of the product, the flu product?

Sure, we are still seeing sales. I will point you to the data though on percentage of people who present to physicians and those who present with ILI, Influence-Like Illness. The percentage is still running well below 2% and as you remember, the CDC’s baseline percentage is 2.5%. So even today, even though there is non-seasonal demand for flu, it’s still at a level that’s quite a bit lower than an actual flu season. Having said that, in the southern hemisphere, you’re also hearing about increased level of flu and we are certainly shipping product there, but we are not shipping product at a level that you would expect during the season.

Very good and then as far as the mix of flu inventory that still might be in the channel, it sounds like A+B is obviously gone, but how about some of the other SKUs? What does that look like?

Well A/B in particular, there is still some inventory, in particular at one of the larger distributors, but other than that, we also look at for example strep. Strep is now down at very low levels and so is HCG. So going forward into Q3 and Q4, we expect pretty typical out sales, mainly because we now understand our market share is stable, but we would expect sales to be as usual.

Okay. So thinking about Q3 in particular, normally we see a build of inventory of flu tests in the channel. Are you going to manage that differently this year? Obviously they’ve run down A+B; maybe they typically would start stocking earlier in previous years. You guys are more than willing to accommodate early inventory stocking, but with the way you’re trying to manage the distributor inventory, how should we think about that perhaps being different, but obviously complicated by H1N1?

The most important change is that we are not incenting the distributor to take onboard inventory, and then we are closely monitoring out sales and we are shipping product accordingly. We will obviously allow inventory build at the end user level; whether that be the acute care lab or the physician office lab. So to the extent that that product is moving into those offices and labs, then that will be what we ship.

Okay and finally; I’ll get back in queue, but can you give us some of your findings of the market share that you had for strep, pregnancy and flu, separated by acute care and physician office lab?

Sure. I can tell you generally that in terms of strep, we run close to 40% overall and HCG, we’re about a third of the market and holding stable.

Any noticeable differences in your market share for flu in either physician office lab or acute care?

No, that in fact as I described a few minutes ago in the physician office segment, it still remains we believe above 70% and in the acute care setting, we’re in that 30% range.

Very good, thanks.

Your next question comes from Ashim Anand with Natixis Bleichroeder; please proceed.

Congrats on a good quarter guys.

Thanks.

Questions; one, on tax rate, taxes are significantly low this quarter. Can you comment on a going forward basis how should we think about it?

The effective tax rate is consistent; it’s actually flat with the prior quarter.

In terms of the clinical trials for RSV and influenza combo, you plan to start it this year. Any projections on when you think you might be able to launch? Like do you think you might be able to launch in 2010 flu season, that product?

Yes, again we’ll start clinicals here shortly and we intend to launch the product in the back half of 2010.

Finally, you guys have been working on this MChip, BChip and ABR-Chips; those things are still under development or those things have been shelved?

That program I assume was discontinued.

Okay. Thank you very much guys.

Your next question comes from the line of Ross Taylor with CL King; please proceed.

Hi, I have a couple of questions. First of all, I think Doug in your prepared remarks you mentioned that there were three scenarios or some potential scenarios you attempted to model for demand in the upcoming season. Can you quantify or describe in any detail what those might have been or sort of what your range of expectations might be for the upcoming season?

Well, we modeled based on a number of factors. I can’t tell you the range of tests that we arrived at, but I can tell you that we looked at a lot of different things, including attack rates, vaccine effectiveness, uptake, number of physicians performing tests, etc. I actually looked at 16 variables and all three of the scenarios what we would view are worse case scenarios, yielded very high numbers.

Okay, and you also mentioned in connection with that, you were planning to build your own inventories now and I’m assuming that’s finished product and I just wondered if much of a season doesn’t materialize, would you be at risk for having product on your own shelves that might expire and not be usable at some point in the future.

The manufacturing process again has restarted. We are holding the product at the pouched stage, which is prior to final kitting. At that stage the product has 30 months dating, provided we hold it at that stage in whip, then we are able to effectively maximize our dating and we don’t think there’s a great deal of risk then, that we’ll be stuck with inventory.

Okay, all right. Last question, I just wondered over the last couple of months if you’d seen much change in behavior at the end user or the physician office level or, if you had seen new customers buying flu tests that previously had not been using flu tests.

Well we don’t have an entire market survey, but the survey that I just mentioned that we had commissioned of over 300 physicians suggested that there was a 12% increase in the number of physicians who were testing this last season versus the previous 2007, 2008 season.

Yes, I guess I was wondering if it’s more recently in response to the swine flu; whether you thoughts had been a much change in behavior or just greater market penetration.

We certainly have a lot of anecdotal evidence, but I would hesitate to try to quantify, but the short answer is yes, there are more physicians testing as a result of what’s been going on than before. I can’t quantify it for you though, I’m sorry.

All right, fair enough. That’s helpful. Thanks very much.

Your next question comes from the line of Jeff Frelick with ThinkEquity; please proceed. Jeff Frelick – ThinkEquity: Hey, good afternoon Dough and John. First question; so with respect to you guys filling some inventory, holding it as opposed to some advising the distributors to stock it, how much flu inventory are they willing to at least bring in and carry some inventory? Can you kind of quantify that in terms of weeks or number of kits, anything like that?

We built a program around enabling them to stock, physicians, at least one inventory turn. Whether the individual physician though takes on board more than they have in the past, we are going to allow that as well. Jeff Frelick – ThinkEquity: Then with respect to the strep and HCG inventories, just so I’m clear on that, do you have any sense of out sales by the distributor for strep and HCG? Have they brought levels down, just not reordering or is there anything happening that sales got just a little stagnant in the quarter on out sales by the dealer?

No, out sales have been consistent and our shares have been consistent. So what we’re seeing is essentially just simply that and inventory drawdown. Jeff Frelick – ThinkEquity: Okay. Thanks guys.

We have a follow-up question from the line of Keay Nakae with Collins Stewart; please proceed.

A couple of questions for John on the income statement, expense items. For G&A, anything that’s going to noticeably change for the balance of the year from the number you just posted?

No, not dramatically.

Okay and then for sales and marketing; Doug, you mentioned a bit of a marketing campaign in the fall, but absent that it should just simply track sales volume?

Sure, it should be consistent with sales volume. We are going to have some efforts as I pointed out, but they will be offset by the savings that suggested we would have do to the restructuring.

Okay and the final question on FIT. Where are you at in terms of the approval of that, CLIA waiver? Can you help us out?

Sure, we submitted the 510K data and we are awaiting a response from the FDA.

And how long ago did you submit that?

Well we don’t specifically state because that then would tie to launch dates and alerting competitors as to when we actually intend to launch it, wouldn’t be a great idea, but I will tell you that we have submitted it and we are comfortable in saying that we will have approval prior to year end.

And with that approval, how restricted will it be based on CLIA?

Well, we expect a clear approval.

Within the same timeframe before you launch?

Yes.

Okay, thanks.

Your next question comes from the line of Steve Crowley with Craig-Hallum; please proceed. Matt Stratton – Craig-Hallum: Hi guys. This is Matt calling for Steve. Congratulations on the good quarter. A question; would it be possible to get some color or an update on the molecular strategy; how close you are to putting your first stake in the ground there and how has that strategy evolved since you first announced that you were going in that direction a couple months ago?

Sure Matt. We’ve had an active program for three years and during that time, we have developed a prototype assay and that work continues. In addition, we are making progress on an agreement that would give us a fairly quick entry into the segment and then we’ve also identified other technologies and platforms that we have an interest in. In addition, we formed a molecular business unit and appointed a molecular business unit manager to that assignment and we’ve also hired more R&D talent with the molecular biology background necessary to get product out the door for us. Matt Stratton – Craig-Hallum: Alright and just a little bit more on the growth rates for strep and pregnancy; I think in your press release you mentioned they’re at 2.5 year lows. Given some of the nuances over the last couple of years as far as big stocking quarters and whatnot, what kind of growth rates should we be thinking about as we look at those two product lines?

When you said growth rate its 2.5 year lows. I think the comment we made was that inventory is at 2.5 year lows. Matt Stratton – Craig-Hallum: Correct, sorry.

Okay, so I would expect low single digit growth in both those two markets. Matt Stratton – Craig-Hallum: Alright, thank you. Thanks for answering my questions.

(Operator Instructions) Your next question comes from the line of [Sarah James] with Wedbush Securities; please proceed.

I was hoping to get a little bit more color on the seasonality of how you expect the inventory to flow out. Typically I would expect to see more of it coming out in January, but recently HHS made some comments that there could be a second wave of the flu season in September, October and I was wondering if you think that’s likely. Is that something you have modeled into one of your scenarios?

We certainly looked at the timing in looking at our scenarios, but it would be very difficult for us to predict whether there would be this wave occurring in September. So our current thinking and planning is around a normal flu season, which would suggest that we would put inventory into the channel in Q3, Q4; perhaps with greater out sales in Q4 and the bulk of those out sales occurring in Q1 2010.

That is all the time we have today. Please proceed with your presentation or any closing remarks.

Okay. This concludes the call for today. John and I thank you again for your time this afternoon and your continued support. Take care everybody.

Ladies and gentlemen, we thank you for your participation and ask that you please disconnect your lines. Good bye.