Welcome to the Quidel Corporation Third Quarter 2012 Earnings Conference Call. At this time all participants are in a listen-only mode, later instructions will be given for question-and-answer session. (Operator Instructions). I’d now like to turn the call over to Mr. Randy Steward, Quidel’s Chief Financial Officer. Please go ahead.

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 October 23, 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. Today, Quidel released financial results for the three months ended September 30, 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 report on the highlights of the third quarter and provide updates on our product pipeline. I will then briefly discuss our financial results and we will open the call for your questions. I’ll now turn the call over to Doug for his comments.

Thank you, Randy. Total revenues for the third quarter at $33 million were in line with last year’s three quarter revenue of $33.1 million. Influenza like illness activity was also consistent with last year’s third quarter as was test demand during the quarter. Inventory levels at distribution were low throughout the three quarter and remain so today. Our sales force continued to actively promote Sofia with the success that we would have expected given one product, Sofia influenza A+B. Progress on our product development pipeline continued as expected. On the whole I’d say we accomplish what we said we would for the quarter and I’d like to now update you on where we are with our near-term plans. Let’s start with Sofia, our automated Fluorescent Immunoassay analyzer. Throughout the quarter, we continue efforts to commercialize Sofia, efforts that were enhanced by our larger U.S. sales organization. Although, the prevalence of ILI was low in the quarter, customers are clearly interested in Sofia and we continue to believe that Sofia will be successful in the longer term and that our longer term goals for the platform will be met. One key to Sofia’s longer term success is of course, menu development. We’ve received CE Mark for our Sofia RSV product in the third quarter. As we have previously stated, we expect to launch RSV Strep A and hCG early in 2013 pending FDA clearance. In addition, we expect CE Mark for Sofia Legionella in the near term as well. Another near term initiative is AmpliVue, our handheld disposable molecular platform that combines isothermal amplification with traditional lateral flow detection. We launched the AmpliVue C. difficile product in Europe in September as scheduled and while molecular testing for C. difficile is not as evolved in Europe and Asia as it is here…

Thank you, Doug. As mentioned for the third quarter of 2012, total revenues were $33 million compared to $33.1 million in the third quarter of 2011. Global sales of infectious disease products decreased by 2% to $21.6 million from the third quarter of 2012 from $22 million in the third quarter of 2011. We did realize growth from DHI’s respiratory DFA, general virology and herpes businesses in the quarter. The sales of influenza were lower by 6% to $8.5 million from $9 million last year. Revenues for Strep A were up 1% to $5.6 million. Revenues for the women’s health category grew by 7% in the quarter to $8.7 million. Growth in this category was largely driven by an 8% rise in sales of our pregnancy business, along with higher sales of our bone health and thyroid products. Our gastrointestinal product category revenues were $1.6 million in the quarter, compared to $1.7 million in the third quarter of last year. Gross margin in the third quarter of 2012 was 55% unchanged from the same period last year. The gross margin was adversely impacted by product mix the result of lower influenza sales. This decrease was offset by the non-reoccurrence of a onetime charge last year of $700,000 relating to the earlier agreement. Operating expenses were $19.3 million in the quarter of 2012, compared to $19.4 million of the prior year. Research and Development cost in the third quarter of 2012 were $5.1 million compared to $5.9 million in the third quarter of 2011. Included in the third quarter of 2012 R&D amount as a reduction relating to our collaboration with Life Technologies, as Doug stated previously in conjunction with the development agreement, we will record the reimbursement and development cost as a reduction in R&D expense. The master agreement was…

(Operator Instructions) Our first question will come from the line of Jeff Frelick, Canaccord Genuity.

Good evening everyone. This is Mark Massaro in for Jeff. So, you mentioned that flu inventories remain low at the distributor level. Can you just give us a little bit more color with respect to distributor’s actions ahead of the flu season?

Because we ship products typically within 48 hours of order, most of our distributors are conditioned to order product as needed. So, we don’t expect any loading in the channel, rather we expect to see an uptick in flu orders from distribution that is consistent with the uptick that you would see at the end user level, in other words when we see an uptick in actual flu cases.

Great. And then my next question is related to AmpliVue C. difficile. So you said over the next few months you’re looking to roll it out in the U.S but can you just comment on what you’ve seen over in Europe, since we’re seeing the CE mark earlier in the year? I know you mentioned a little bit in your prepared comments but if you could try to characterize the uptake in the EU? And how even anecdotally how that may play out here in the U.S.?

So far the experience we’ve had with AmpliVue C. difficile in Europe has been through meetings with distributors who have taken on board initial stocking orders and are now making sales calls. So, I can’t really speak at this early stage, essentially one month into the launch as to what they’re seeing at the end user level. I do know that most of the market there is forming seeded testing using the standard GDH and then EIA testing algorithm and that the transition to molecular has not evolved as it is here today. So, I sense that that would be somewhat of a missionary sale for those distributor reps. So, have to see how well they do.

Great. And just my last question. Obviously you have a large going out at several years, do you see any material change to the timing for the launch of the menu? And in particular with respect to Wildcat as well?

No change at this stage. We're set for Sofia, we expect to round out the respiratory menu followed by women’s health products, we haven’t disclosed yet what those are, but we feel like we have a capacity of doing four to five new assays per year. And that’s what we’re aimed at there. On the molecular side, the PCR assay development is going as scheduled. With the AmpliVue products, we are pretty much on schedule there as well. We expect to launch our first assay as I mentioned here shortly followed by another three over the next 12 months following that. In terms of Wildcat, it’s been widely discussed previously that we are in the process of locking down our cartridge design for the Wildcat platform and that’s pretty important for us in understanding what our cost are likely to be at launch. We’ve said that we expect that to be locked down by year-end and we’re still pretty much on schedule with that. Following that I think that the development should go fairly straightforward and that we’re still pretty confident that it will be in market in Africa in 2014 with an HIV viral load assay and that we will be in market in the developed world with the menu approaching, if not exceeding 20 assay targets in 2015.

(Operator Instructions) Your next question comes from the line of Steven Crowley with Craig-Hallum.

This may be some follow up color on Sofia in the nature of the accounts who are adopting the product and how you’re equipping them with disposables really on the ball game would be helpful to us,

Sure, I'll start by saying we’re happy with the placements of Sofia so far. Most of those who have done placements versus sales and with those placements we have in an actual order that varies, but is actually pretty small ranging from what Randy, one to three I guess? So for the most part we are not loading the channel as yet and those customers with Sofia reagents on hand, once the season starts, it will probably blow through those fairly quickly. And we'll need to reorder.

And that's one to three bundles of kits and you’ve historically talked a little bit about the type of accounts you're getting into hospital versus physician office, your account base versus competitors. Can we have a little bit of an update there also?

Initially, we said that our placements from the hospital segment were about 40% cannibalization, the numbers in hospitals is small relative to physicians now and the physician segment for the most part, initially looking at our quick few customers, but obviously over time we've also identified customers that are new to Sofia, new to Quidel as well. And I would say there that we're running probably about 50% cannibalization in total.

And the next question comes from the line of Bill Quirk, Piper Jaffray.

Hi, good afternoon everybody it's actually Dave Clair here for Bill. So I was just hoping maybe to get a little bit more color on the number of reps you have in the field right now. Where are we now? Where do you expect us to go, in the next twelve months or so as the new products come online?

We had completed the hiring for the largest sales organization about Q2. And so as we previously said, the SG&A expense that we have in the P&L at Q2 was about what our run rate would be going forward. Total all in, in the United States organization including marketing folks and managers, we are in north of 60 people. Ex-US obviously the organization is much smaller.

Okay. Then just given kind of a flat IOI year-to-date, what are your expectations for the upcoming flu seasons?

Well, in our planning process we have to assume something approaching a normal season, although we have no understanding of whether that would be true or not at this stage. What we do know are the same things that you could see, things that are publicly available right now, of those flu tests that are being performed in the marketplace about 4% of those are positive which is pretty darn low, but that actually is typical for this time of year, but I am not sure that means anything. We do know that about a third of the cases so far have been H3N2. In previous years we would have said that a higher prevalence of H3N2 would be indicative of severity of the season, although following the pandemic in 2009, I am not sure that’s exactly true anymore. Year-to-date, flu vaccines scraps are down, little over 7% versus what they were last year and death due to flu are also down. So all those things, at this stage are interesting, but it is October and in years past we really didn’t see any uptick until the very end of December. So, I am quite sure that’s not very helpful, hope for you but it’s a roundabout way of saying we really don’t know at this stage.

And your next question comes for the line of Kevin Milota, JPMorgan Chase.

On Europe (inaudible), can you talk about where the ASP is and then can you talk some about how you define success in a year or so of time in terms of either revenue or market share there? Thank you.

Sure, I won’t say specifically I don’t know what are prices in Europe but I will say that pricing in Europe typically from molecular products is slightly lower than what you would see here in the US. And typically here in the US as you know C. difficile test have ranged at the low end in the 20s to the high end in the 30s for those molecular assays. Our expectation for share, I can’t really comment on, I will say that the market again is not very evolved to most testing for C. difficile in Europe is done by cytotoxicity assays, as well as GDH followed by EIA testing. And so there is an opportunity I think that is probably equivalent to the opportunity in the U.S. but over some period of time. And unlike here in the U.S. we’re probably not behind in terms of approaching the market there.

And then given the level of pay down the obligations and the new credit facilities, are you looking for more M&A in the future?

Given the product pipeline that we are working on, we’re not highly focused on M&A activity. Obviously, there could be opportunistic things that arise from time to time and we continue to look at those. I will say that because of the position that we find ourselves in, anything that we would do would need to be accretive almost immediately and so that obviously limits the number of things that we look at.

Your next question comes from the line of Brian Weinstein, William Blair & Company. Matt - William Blair & Company: Hi guys this is actually Matt in for Brian. Thanks for taking question. So, just quickly thinking about all current customers are coming online Sofia and customers that aren't coming online, what sort of feedback are you getting from customers you currently have in terms of simply like to see on the menu? And then sort of feedback from customers who are coming online, sort of what’s the push back you’re getting there? Thanks.

In terms of customers that have already acquired Sofia, I would say in the hospital segment most are looking forward to RSV and Strep and that’s good because those products are eminent. On the physician side, interestingly enough flu is of interest. I think Strep is also interesting, RSV less so. And I do think that there is the mainframe objectively read hCG product. In terms of pushback from customers, at this stage we’re not really seeing a lot so far. Matt - William Blair & Company: And then the new startups that you are getting do you any sense of whether that’s share gain or feature customers that are new to flu testing? Thanks guys.

That’s a great question Matt. Predominantly, they are takeaways from competitors, although I would say some number less than 10% are brand new startups, in other words customers that previous released a recent history have not performed rapid flu testing. So, we are seeing a little bit of market expansion there.

Your next question comes from the line Shaun Rodriguez, Cowen.

So for Sofia, what do you view as the key drivers of incremental revenues there for the one year term products, but hey, I am thinking flu, Strep, RSV and hCG just in term of particular indications or application that the platform might be opening up?

Objectivity is the number one stated reason that our sales people relate to us and in addition the data for flu are clearly better than our existing products and therefore the competitive products that are in the market. Connectivity for some customers is an issue, the ability to download the data somewhere whether to extract it through the SD card or to interface directly to either an EMR or laboratory information system. But interestingly in a physician side, the number one driver is next generation technology and the ability to objectively read the answer.

And heading into this flu season, how do you think about contributions from outside U.S. markets from the open box products and the DSA products. Basically trying to get an idea for how do you think you’ve got opportunities outside of the U.S. rapid platform?

Yes. Let me start with DSA product line, we have had success in Asia and particular in China with our DSA products. We do see an opportunity for Bobcat as well there in China but also other markets. We have had some experience already in a couple of key markets with Bobcat and we’re very much interested in getting that product into that market. In terms of the real-time PCR assays, I would say that our success there so far has been somewhat limited but recognizing that our menus also quite small. We’d like to have a bit more critical mess though that we can sell a buddle of PCR assays on those Life thermal cycles in particularly but others as well. And I think we’ll have a bit of bundle to promote in 2013 and we look forward to seeing how well we can do. But I will caveat that by saying that that so far with the limited menu, our success has been somewhat, well, it’s been soft.

Okay. And last for me at least for now. With the potential of the first molecular clearway flu product coming on the market over the next year, so if you just share your thoughts on how such a platform might fit into the market relative to the traditional lateral flow Sofia and some of the lab based molecular offerings out there? Thank you.

Well first, I would say that I’m not absolutely convinced that a molecular product would be clearable depending on what the steps are. If we're talking about things like the automated platforms that are out there, I think the time of the result is going to be problematic. Certainly anything that's PCR based is probably going to take too long in a physician's office to be viable. So what we see is a continuation of the need to infectious disease to have some including flu in that 15 minute or less window. Now having said that, if there were something as easy as Sofia to run and you could do it in under 15 minutes there is a potential that you could see some share shift. Although, it certainly would be very expensive to perform on a health care system to perform molecular assays in the same volume that you see in the rapid category.

Your next question comes from the line of Nicholas Jansen, Raymond James & Associates. Nicholas Jansen - Raymond James & Associates: First, in terms of just normal flu season, obviously it’s been a bumpy road, each of the last couple of years. What would you define is kind of a normal flu season so we can kind of better gauge performance relative to that target for both flip side of December quarter and the March Quarter, kind of a normalized number?

Around 15 million. Nicholas Jansen - Raymond James & Associates: And 15-35 split?

No. 50 and then you're saying 15-35 meaning… Nicholas Jansen - Raymond James & Associates: 4Q, 1Q?

Yes, we have said traditionally two-thirds in the first quarter. Nicholas Jansen - Raymond James & Associates: Okay.

And the remainder in the fourth quarter. Nicholas Jansen - Raymond James & Associates: And then looking at the voice (ph) agreement, how much reduction to R&D we would be anticipating for this over the next 12 to 24 months? Is it going to be a similar run rate that we saw in the third quarter or is it just obviously going to fluctuate with the development time way? Thanks.

It could fluctuate depending on how many assays that we've agreed on project plans and our success obviously in executing product development, so it could vary from time to time. Nicholas Jansen - Raymond James & Associates: But should we will be assuming a much lower, roughly a $5 to $6 million lower run rate of R&D going forward as a result of this collaboration? Or you don’t want to provide that little specific?

I think it’s too early to provide that. As soon as we have more clarity, we’ll obviously provide it. But at this stage, I would be guessing along with you on whether it would be that we would be reducing R&D expense by going forward. Nicholas Jansen - Raymond James & Associates: Okay. Than lastly for me and looking at, I think PSS is your distributor for Sofia, once they came on board I believe it was early in 3Q, how much of a dramatic turn did you see once they came on board? Thanks.

I’ll just characterize it by saying we’re pleased with the level of activity and their performance and they were helpful for sure.

(Operator Instructions) Your next question is a follow-up from the line of Steven Crowley, Craig-Hallum.

Hey guys. Thanks for taking my follow-ups. In terms of (inaudible) you mentioned that there was some growth there. Can you give us a sense for the extent of the growth and what’s percolating or not percolating along there?

Yes. We saw about a 6% increase Steve in over third quarter 2011. We do see in summer months a slow-down. So it doesn’t change our perspective that we think it’s going to be going forward low double-digit growth around the 10%, 11% but summer was little slow but that has been indicative over the last couple of years.

And then back on Sofia. In terms of, kind of, decipher your comments about the traction you’ve been able gain so far, I mean are we talking about hundreds of units, several 100 units that you’ve been able to seed and hopefully get in position for the onset of the flu season? What’s a right kind of way for us to calibrate the success you’ve had?

I’m having a difficult time Steve, because I really don’t want to give out the number mainly because I just don’t want to disclose to our competitors how many we’ve got out there. You know, I spend a lot of time trying to figure out how many competitive analyzers and various types are out there and I really just don’t want to make it that easy on our competitors to know exactly what we’re doing, what our strategies are. I would just say though that we’re comfortable with what we've done so far to date and we’re looking very much forward to the upcoming respiratory season; we’re also looking forward to the next three essays that we plan on launching here in the next few months.

And in the normal flu season, Sofia flu volume, I know what an average account, the elusive average account but can you help us understand one of these instruments that you’ve placed might drive in terms of consumable utilization since I am sure you had to make some assumptions for the placement agreements.

Well, our average customer is a difficult number to use, because we have a pretty big disparity between the very large customer and the small customer. You could probably guess that we’re not targeted at the small customer. So instead we are targeted at the larger customers. So, that’s the best thing I can tell you right now. Because I know you want to model this Steve and I know you want to take a guess at the number of analyzers and multiply it and try to figure out, how many those are share gain, how many of those are new, et cetera. But at this stage, I’d rather not get into that level of detail.

And this is all the time we have for today. Please proceed with your presentation on a closing remark.

Well, this concludes the call for today. Thanks everybody for your time and for your continued support. Take care.

Thank you.