Good day ladies and gentlemen and thank you for standing by. Welcome to the Quidel Corporation Q1 2012 Earnings Conference Call. (Operator instructions.) I would now like to turn the call over to Mr. Randy Steward, Quidel’s Chief Financial Officer. Please go ahead, sir.

Thank you, Operator. Good afternoon, everyone, and thank you for joining today’s call. With me today is our President and Chief Executive Officer Doug Bryant; and Ruben Argueta, Investor Relations Manager. 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 Quidel’s annual report on Form 10(k), registration statements and subsequent quarterly reports on Form 10(q) as filed with the SEC. Furthermore this conference call contains time sensitive information that is accurate only as of the date of the live broadcast today, April 25, 2012. 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. As you’ve seen we’ve released a short while ago our financial results for the three months ended March 31, 2012. If you have not received our news release or if you would like to be added to the company’s distribution list, please call Ruben at 858-646-8023. For today’s call, Doug will give you some color on Q1 and discuss a variety of developments in our exciting pipeline of products for new and expanded markets and geographies. I will then briefly discuss our financial results and we’ll then open the call for your questions. I’ll now hand the call over to Doug for his comments.

Thanks, Randy. As you’ve seen from our release total revenues in Q1 were $38 million compared to $59.6 million in Q1 2011, and equivalent to the $38 million of revenue that we achieved in Q4 2011. While disappointing these results aren’t surprising given the infectious disease category represented the majority of the decline. Sales in this category declined 45% versus Q1 last year due to the unseasonably mild winter and flu and respiratory disease season. As disclosed previously there was a low ILI incidence through the first two months and activity failed to cross the 2.4% national baseline. While we have some reason to believe that there was an uptrend toward the end of the season we don’t have complete data on that at this time. Despite the lack of a meaningful flu season, however, the quarter was notable for several significant accomplishments which are important to our strategic transformation into a broader-based diagnostic company and our efforts to reduce the kind of volatility that we saw in Q1. The two developments we are currently most excited about and which we believe are particularly important to our future are the commercialization of our revolutionary Sofia product and the remarkable advances we’re making on the molecular diagnostics technology front. I’d like to update you on both. Sofia, as many of you know, is our next generation fluorescent immunoassay analyzer system and one of the cornerstones of our business. Our Sofia Analyzer and our Sofia Influenza A+B fluorescent immunoassay are now CE marked, 510-k cleared and CLIA waived. Although there have been some challenges around selling flu assays and analyzers to a limited audience in a weak flu season we’re seeing strong interest from customers and others in the scientific community who like the ease of use, connectivity aspects and enhanced assay…

Thank you, Doug. For Q1 2012, as Doug noted, total revenues were $38 million compared to $59.6 million in Q1 2011. As expected, the infectious disease category represented the majority of the decline as sales decreased 45% versus Q1 of last year due to the mild flu season. Global sales of infectious disease products totaled $26.4 million in Q1 2012 as compared to sales of $47.6 million in Q1 2011. Weaker sales from our influenza product line were responsible for the decrease which totaled $7.5 million for the quarter as compared to $25.3 million of flu sales last year. Strep A and RSV were also affected by the weaker respiratory disease season and sales of each decreased by 21% as compared to last year. Our herpes product line grew by 5% over Q1 2011. Revenues for the women’s health category increased by 3% in the quarter to $8.3 million led by strong growth from our bone health business and from Thyretain, our Graves’ disease product, which increased 20%. Our gastrointestinal product category revenues were $1.6 million in the quarter. Gross margin in Q1 2012 was 61% compared to 66.4% in Q1 2011. Our gross margins in the quarter were negatively impacted by an unfavorable product mix associated with reduced flu test volume. Included in cost of sales for the quarter were $2.1 million of intangible asset amortization related to the Alere Lateral Flow royalty buyout. Operating expenses were $22.7 million in Q1 compared to $21.6 million for Q1 of the prior year. As anticipated, research and development costs in Q1 were $8.5 million compared to $7.5 million in Q1 2011. The main driver for the increase over last year was the timing of increased costs associated with clinical studies and a Project Wildcat milestone payment. Therefore, for the full year…

Thank you. (Operator instructions.) And our first question comes to us from the line of Jeff Frelick with Canaccord. Please proceed. Jeff Frelick – Canaccord Genuity: Yes, good afternoon everybody. Hey Doug, maybe just you called out the walk-away mode versus the read now mode with Sofia. Can you maybe just talk about a little bit how has that been received? I know early on you had the approval and were selling it into the hospital market – was one mode more acceptable and did that help drive acceptance into the early launch into the hospital market?

There are a number of factors that contribute to the placement of Sofia. The connectivity is one; the assay performance is probably the biggest, but certainly our customers would tell you that having the ability to run multiple samples at once is a nice feature. Imagine a family of four, for example, shows up in an emergency room. All four are going to get swabbed for flu, and there’s no way that the technician and the emergency room want to run those one at a time. So with Sofia the operator would simply take all four swabs, set them up simultaneously; come back at his or her discretion after fifteen minutes and by 4:30 simply insert those into the Sofia instrument and read them 45 seconds at a time. So you’ve got an incubation time that’s 15 minutes on the frontend and thereafter just run multiple reads of those samples. So it’s not the most critical feature of the product but certainly helpful. Jeff Frelick – Canaccord Genuity: And then with respect to Sofia strep, I know you just got the CLIA waiver on flu and we’re not going to give you time to catch your breath here, but can you just walk us through the next steps in logistics leading up to Sofia strep commercialization? What do we need to pay attention to and kind of check the box?

Thanks, Jeff. We said before that we’re in clinical trials in the US but I’m not actually going to communicate further on that. Generally I’d like to not talk about things that would be valuable for our competitors, and certainly identifying when we plan to launch each assay going forward would be valuable to those folks on the line here. But what I will say is that we’re confident that we’ll have multiple assays available as we exit this year and it’s highly likely that strep is in that group. Jeff Frelick – Canaccord Genuity: Okay, and just the last, quick question – can you just give us a quick comment, either you or Randy, on the flu and strep inventory exiting Q1?

Well, I’ll jump in immediately and ask Randy to give more details. What I would say is flu at end user level we believe to be quite low given the orders that we’ve seen in April, and we now have an inventory level of many of our products that’s actually very, very low at distribution. And Randy, why don’t you give them a flavor for the numbers?

Yeah, on a year-over-year basis our inventory levels at distributors are down about 20% from March of 2011, so we’re close to historical lows on flu and strep.

What that means, Jeff, is that even though ILI is quite low, even now, we’re actually shipping product – a lower level of product of course but we’re shipping product. Jeff Frelick – Canaccord Genuity: Okay, thanks guys.

And our next question comes from the line of Steven Crowley with Craig-Hallum Capital Group. Please proceed. Steven Crowley – Craig-Hallum Capital Group: Hey guys, good afternoon. Just to be clear: you gave us some nice data, well some data on the extent of flu sales. I think the inference of the number you gave us is that flu was actually down sequentially maybe a couple million dollars. Is that the right way for us to think about it? It emphasizes how tough a period it was for that product.

It absolutely was the case, Steve. We were down, was it 9.7, Randy? To 7.6. Steven Crowley – Craig-Hallum Capital Group: Okay. And in terms of market dynamics and market share, the best you can gather even qualitatively, do you feel like any market share moves accounted for some of that weakness or is it purely just the seasonal incidence phenomena?

We’ve discussed market share in the past and have always said that it’s difficult to take sales that are reported and figure out market share. But what I can tell you is that in order to complete our compensation payout for last year we did conduct a marketing research project to assess exactly by segment what happened to market share. And in that analysis we showed actually a slight uptick in market share. I don’t think it was a meaningful shift, necessarily, but it was up slightly and in fact, probably not enough that our competitors would have probably even noticed. So the short answer is I don’t think there was huge shifts in market share necessarily – in fact, I can’t see any evidence whatsoever that that was the case. And in fact, if there was any movement at all we saw a slight uptick based on our limited dataset. Steven Crowley – Craig-Hallum Capital Group: And then picking up on a couple of things I think you tried to emphasize in your prepared commentary and your press release – you talked about having made enough success, significant success on the product development front and getting stuff to market that you’re now doing things to really enhance the commercialization feasibilities of the company and some things out in the field that represent greater commercialization abilities. Can you put a little bit more meat on the bones of what you’ve done and what you’re doing out there in the marketplace?

Well again, Steve, I’m not going to go into a great deal of detail on our marketing plans of course. What I will say is that we do have a marketing plan and it’s a good one, but I do think that we have publicly disclosed that we are increasing the size of our commercial infrastructure and much of that has been completed. We’re doing things externally that a company does when you have unique new products, so of course our participation in meetings, scientific meetings in Europe and scientific meetings here in the United States has increased. So without going into further detail I would say larger commercialization and the fact that we have new, unique products that customers want to talk to us about creates a need for us to participate in a slightly different way at these shows. Steven Crowley – Craig-Hallum Capital Group: Great, last one from me and then I’ll hop back in the queue: in terms of your commentary about having seen positive response to these new products, even in the flu segment where selling winter coats when there is no winter is kind of a difficult task. Can you give us some flavor for that or at least a couple of examples that will represent microcosms of your success so that we can chew on it a little bit?

Well, what I can say, Steve, is that although I would be very hesitant to provide specific numbers on placements at this stage we’re very pleased with the placement rate so far and still believe that ultimately we’ll place thousands over the next years. It’s gone really well for us so far. We’re actually a little bit surprised that we’re able to capture the interests of hospitals and the larger, moderately complex physician office so far, but again it’s early. Steven Crowley – Craig-Hallum Capital Group: And in terms of the revenue streams that you’re able to generate with the placement model, can you give us some ballpark for how we should be thinking about the value of the placement to you?

It would be very difficult to do that based on flu alone. I will say that we do have sales of Sofia flu, we are shipping product. Again, we like the placement rate, we like the number of customers. We like the quality of customer that we’re getting, and in fact when I look at hospital customers alone I see that over half of those hospital customers are actually not previously Quidel customers. So we’re doing quite well. I think once we have a more complete menu as we exit 2012 we’ll be able to help you a little bit more in terms of forecasting what a placement would look like in terms of revenue per box over the strategic plan. Steven Crowley – Craig-Hallum Capital Group: Great, thanks for the answers, Doug.

And our next question comes from the line of Zarak Khurshid with Wedbush. Please proceed. Zarak Khurshid – Wedbush : Good afternoon, everyone, thanks for taking the question. So Doug, can you talk a little bit about the Sofia pricing as it stands today and also just the test manufacturing or cost of goods? I’m just trying to understand how the ramp in that product may or may not affect gross margins going forward.

Again, we have actually, Zarak, as you can imagine I’m looking at the screen – we have more competitors on the screen than I have analysts. And so I’m absolutely reluctant to talk about what our pricing would be with any specificity. What I would say is that we certainly are not having to discount pricing in order to place these analyzers or to ship product. For sure we are at least at the pricing that we were at before. In terms of cost of goods sold we’ve said previously and publicly that our cost of goods sold for the Sofia analyzer is quite low and that enables us to either sell the instrument if the customer wishes or to place it for the typical reuse agreement plan type of commitment. Zarak Khurshid – Wedbush : Understood, thanks for the color. And then Randy, maybe I missed it – what was the CAPEX in the quarter and how should we be thinking about that playing out through the rest of the year?

Yeah, for the quarter it was $1.1 million. We do believe that on a full-year basis CAPEX will be somewhere in the range of $8 million to $9 million. Zarak Khurshid – Wedbush : Okay, great. And then the last one just on the build out of the team – that didn’t seem to really show up too much, at least the build out of the commercial team, it didn’t seem to play out in the sales and marketing line. Will we see more of that inflection in the full quarter for Q2?

Yes, we did multiple hirings in March, the March time period. And certainly with the lower sales number the compensation expense was lower than in a normal flu season. So you will see an increase in Q2 through Q4 and that’s why we thought it appropriate to kind of give you the modeling of where we think sales and marketing will be as a percentage of sales on a full-year basis. Zarak Khurshid – Wedbush : Got ya, thanks for taking the questions.

And our next question comes from the line of Tycho Peterson from JP Morgan. Please proceed. [Ramish Dunpanseti] – JP Morgan: Hi guys, this is [Ramish Dunpanseti] in for Tycho; thanks for taking the question. I think previously you had mentioned as you ramp content on Sofia that you could get to say 10,000 to 15,000 pull through box? I’m just wanting to kind of go back to that and find out how you think about pull through just to help us put some parameters on a customer pro box. And I can understand that you don’t want to disclose too much at this point but I think that number was out there previously.

That number was out there previously describing what we have in our long-range plan, so when you look at the terminal value if you will of a placement in the out years we had previously said publicly that we would be aiming for the $10,000 to $12,000 range actually. And so that’s based on the products that we see that we currently have in development over the next couple years. [Ramish Dunpanseti] – JP Morgan: Okay, great. And then just in terms of international revenues, I’m not sure if you disclosed this but any color you can give on trends there and sort of your outlook maybe anywhere in the next three to eighteen months particularly with some of the CE mark assays?

For the quarter our international was up 4%. We did see some good growth in Asia-Pacific, a little softness in France, and we do anticipate middle single-digit growth for the full year in international. [Ramish Dunpanseti] – JP Morgan: Great guys, thanks.

And our next question comes from the line of Brian Weinstein with William Blair. Please proceed. Brian Weinstein – William Blair: Hi guys. Just to kind of follow up a little bit on that last comment, you guys have had some significant product approvals in the EU. Can you just review your commercial infrastructure and distribution agreements overseas and how these approvals fit into those; and if you can just repeat what you just said about contribution, what we can expect out of these products in Europe over the next year or so? Thanks.

Well again, we’re not going to break out Europe separately from that $10,000 to $12,000 over the strategic plan, but you’re right – we have had a number of approvals. First of all, we’re currently selling Sofia products in Europe for flu and for strep, and I would anticipate as we exit 2012 that our folks over there will have the opportunity to sell about six products. And so they’ll have about six products in their bag. We have a mix of countries where we think it’s interesting enough that we should go direct and we’re doing that, but we also have distributors in each of the major countries and those are all in place. Brian Weinstein – William Blair: Okay. On AmpliVue, clearly a lot of excitement down there at [CVS] over the last couple of days, but is there anything in terms of a second generation for that product that would bring down the number of steps even by a couple there? And if so the timing and then also on AmpliVue, I think you had said previously that your next steps would be an immersive blood culture. Is that still what we should think of as test number two for that product? Thanks.

Sure. You’re right, Brian, where there was a lot of activity I’ve been told about AmpliVue C. dif at the Clinical Virology Symposium which just wrapped up today down in Daytona Beach. It’s the first assay that we’ve introduced in Europe and we’re in clinical trials as I mentioned in the script currently. But behind that are three other assays which I won’t go into detail on, and one of those is MRSA. So I also mentioned that it’s highly likely that two other assays will be in clinical trials at some point in time in 2012. So that’s sort of where we’re at with AmpliVue so far. In terms of next generation, is there a plan for a next generation product? Yes, there is. Brian Weinstein – William Blair: Okay, but no comment on timing or anything, or anything about that?

No, I can’t comment on timing of… It’s clearly in development, a next generation product which I can give you a little bit of color on, but our intent would be to simplify the housing design and give it a better look and feel and perhaps some other ease of use factors. But in terms of the practical assay performance, no – we would intend to continue with the performance that we see right now. The performance actually for the assays that we have in development looks quite good so we’re not interested in changing the chemistry or the design from that perspective. We’re talking about practical workflow sorts of things that would be more useful to a customer. Brian Weinstein – William Blair: Okay, and my last question on Wildcat – any update as far as any longer-range timing that we’d be able to see something here in the States? Are we still thinking kind of 2014-15? Or is there any update on that? Thanks.

Thanks, Brian. We’re still on the same timeline. The encouraging thing, I think you heard Randy say was that we just made that milestone payment which would tell you that we just completed that first phase of development on time and that we’re moving forward with the schedule that we had detailed actually about a year ago at our Analyst Day. So we’re still on that timeframe where we look to have an analyzer that’s nearing completion of development towards the end of 2013 and available for the hybrid in developing countries sometime in 2014. Brian Weinstein – William Blair: Okay, thank you.

And our next question comes from the line of Ross Taylor with CL King. Please proceed. Ross Talyor – CL King : Hi, I just have maybe two questions left. First with regards to Sofia, how quickly do you think Sofia might replace your legacy flu product and would it ever completely replace it do you think?

The short answer is I think there will always be a demand for the simple rapid point of care diagnostic test, particularly in the lower volume segments. You have to remember that we have tens of thousands of customers and only a certain subset of those would be the type of customer who would prefer an instrumented system. They will of course be the larger customer who does a number of different assays and also a certain volume of those assays. So that’s probably why when you think about the total dollar value per instrument that we would look at in the strategic plan that we’re at that $10,000 to $12,000 level because we don’t see a significant number of placements in super low-volume sites. So again, the short answer is I think we’re going to have both – the Sofia customer as well as the lower-volume physician office customer. Now I will add, though, that the number of physicians who are in these smaller practices appears to be declining so obviously at some point these practices could get large enough, these super-small practices could get large enough to actually support the volume necessary for a Sofia. Ross Talyor – CL King : Okay, and also related to Sofia, this is more curiosity than maybe significance, but how would some of your reagent rental placements work give n the volatility of the flu? I mean if we have a year like this year where there’s hardly any flu sales, how would customers manage through those types of agreements?

That’s a great question, Ross, and that’s why we [have] several different things. Flu is the first of many assays that we plan to put on Sofia and we don’t intend that flu is the driver of the placement. Early on, though, obviously we have very flexible programs that enable a customer to get the Sofia analyzer without understanding precisely what their flu volume might be. Ross Talyor – CL King : Okay, and my last question relates to AmpliVue. Do you think you need multiple tests on the market in the AmpliVue platform to really gain acceptance of that or could just C. dif by itself get a lot of traction in the marketplace? I understand these are all individual handheld tests but I just wondered do you think you need a kind of family of them or can single ones work very well on their own?

Again, Ross, another very good question. I can’t speculate as to how well we’ll do with any precision, but based on our customer feedback early on I think people are trying to solve a problem with respect to C. difficile, and therefore we may do pretty well with that product just for that product alone. In other words, I don’t think we need numerous other menu additions in order for C. difficile to be successful. Having said that, there are other analytes for which this format also seems to make sense, but I think they’re somewhat exclusive to each other. Ross Talyor – CL King : Okay, that’s all helpful – thank you.

(Operator instructions.) And our next question comes from the line of Scott Gleason with Stephens. Please proceed. Scott Gleason – Stephens Inc.: Hi guys, thanks for taking my questions. I guess just to start off, would you guys be willing to break out the diagnostic hybrid segment and how much that was this quarter?

We haven’t done that in the past for the last quarter or so and I don’t have that in front of me, but we can certainly make that available. Scott Gleason – Stephens Inc.: Okay, great. And I guess just if we’re to look at the flu season, one way to think about your success is the number of doctors who are using the product. Doug, do you have any sense for kind of what the physician growth was in the number of physicians who are using your flu product on a year-over-year basis?

I don’t, I really don’t. The volume of flu this Q1 was low so I can’t tell you the number that had product on their shelves that they were simply using already versus those who ordered product. We have a general feeling that the number is going up, I believe that, but we still don’t think we’ve gone over the 40% number. You remember we used to say that we thought it was in the 33% to 34% range and then we said that following the pandemic we really had no ability to know how much it had increased but that we still thought it was under 40%, and I don’t have any reason to believe it’s much higher than that at this stage. Scott Gleason – Stephens Inc.: Okay, thanks for taking my questions, guys.

And our next question comes from the line of Nicholas Jansen with Raymond James and Associates. Please proceed. Nicholas Jansen – Raymond James & Associates: Hey, a bigger picture question since you were talking about your Analyst Day a few questions ago: you laid out a huge roadmap of new product offerings. Where are you ahead, where are you behind and how much do you think the weak flu season set you back from where you thought you would be on the Sofia placement side by now? Thanks.

Sure. Well, obviously the volume of respiratory disease was down and obviously that should have had an impact on a number of things including our placement rate of Sofia as well as sales of our QuickVue products. But it’s really hard to say, really. We certainly have been shipping instruments and reagents and as I said earlier, over half of our customers that we’re gaining with Sofia are new to us. So it’s hard to quantify. I can say obviously that it has had an impact. There are certainly a number of occasions that we’ve talked to customers and they’ve said to us that it’s difficult for them to bring onboard Sofia when they don’t have adequate samples to test and that has been a factor; but nevertheless we’re still shipping instruments. The number is growing and as I said earlier we feel very good about our placement rate given the conditions. Nicholas Jansen – Raymond James & Associates: Should we then think about that maybe the Sofia placements, considering that they do need samples, might be more backend-weighed versus in Q2 or the first part of Q3 given the timing of the influenza season?

Well sure, and I would have said that even with the flu season. We would be placing analyzers now, we would be ramping up and then as we entered these other assays there’s other reasons for people to go to Sofia and certainly Q4 would be higher than the other quarters; and I would anticipate Q1 2013 to be higher than that.

And our next question comes from the line of Zarak Khurshid with Wedbush. Please proceed. Zarak Khurshid – Wedbush : Yeah, thanks for taking the follow-up, guys. So backing up to Wildcat, you talked about the sample (inaudible) frontend. What’s happening on the backend analysis side and in general what are the things that are left to be ironed out with the instrument development? Thanks.

Well the next step in a normal development process is we would have test benches for each one of the components of an instrument system and that’s actually what we’re doing right now. But that would not be proprietary or unusual; that’s just the next step. We have obviously prototypes for each of the components including extraction and then those each with actual clinical specimens and assays would be used to demonstrate that we have a system that then would be ready to be fully integrated. Zarak Khurshid – Wedbush : Okay, great.

(Operator instructions.) And with no further questions this concludes today’s question and answer session. I would now like to turn the call over to Mr. Doug Bryant for closing remarks.

This concludes the call for today, then. Thank you for your time this afternoon and for your continued support. Take care, everyone.

Ladies and gentlemen we thank you for your participation in today’s conference. This does conclude the presentation and you may now disconnect.