Apr 24, 2013
Operator
Welcome to the Quidel Corporation First Quarter 2013 Earnings 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'd now like to turn the call over to Mr.
Randy Steward, Chief Financial Officer. Please go ahead.
Randy Steward
Thank you, operator and good afternoon everyone. 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 significantly 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 well 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 23, 2013. Quidel undertakes no obligation to revise or update any statements to reflects 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 March 31, 2013. 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 first quarter and provide updates on our product development pipeline. I will briefly discuss our financial results and will open the call for your questions.
I will now hand the call over to Doug for his comments.
Doug Bryant
Thank you, Randy. Total revenues for the first quarter of 2013 were $62 million, 63% increase over revenues in the first quarter of 2012.
The rise in revenue was driven primarily by increased fluid testing which continued from strong demand in the fourth quarter well under February until this year’s epidemic (inaudible). As a result we experienced increased demand across the entire range of our respiratory test formats including QuickVue and Sofia Quidel molecular and DFAs D3 Ultra.
In the quarter we achieved 28% operating margin while continuing our investment in R&D and in our commercial organization. For today’s call, I will focus mainly on the two programs most likely to create near term growth Sofia and AmpliVue and we will comment only briefly on the other programs.
Let’s begin with Sofia. The good news in the quarter is that we were able to demonstrate that the Sofia platform clearly does address unmet needs and as a commercially desirable product.
Customers appear to like both the objectivity and the improved sensitivity of the Sofia flu assay. Our U.S.
sales organization and principle distribution partner were able to generate significant demand for the instrument and Sofia influenza A+B test cartridges. Unfortunately we were unable to fully supply the demand for the test cartridges and actually purposely slowed our Sofia instrument installations.
At this point we have now cleared the backorder for cartridges are manufacturing at maximum capacity and our shipping instruments and building cartridges in preparation for the next flu epidemic whenever that occurs. In terms of pipeline Group A Strep, RSV and hCG are all currently under review at the FDA and any other comment I could make regarding those three products will be speculative.
I think however, that we can safely assume that we will be selling one or more perhaps all three of these products in the back half of this year. Regarding AmpliVue, we received FDA clearance for our first assay for C.
difficile in December and the moderate complexity clear designation in early Q1. Three months or so into the launch we can say that customer receptivity to the handheld disposable molecular platform format has been good and assay performance in customer hands is good and at least equivalent to the prominent molecular C.
diff assays. We are encouraged by what we see in the field so far and are now more confident that our investment in the development of additional AmpliVue assays for an infectious disease targets like HSV Pertussis, Group B Strep, Trichomonas and others is warranted.
The other programs are proceeding as well and I will provide a few bullets regarding our progress in the quarter. We did receive FDA clearance for Quidel molecular real-time PCR for an RSV human metapneumovirus combination assay.
The assay uses the same easy-to-use format as our real-time PCR influenza assay and in fact employs the same thermal cycling conditions which enables both two-plex assays to be run on the same play. We also received FDA clearance for Quidel molecular real-time PCR assay for the detection directly of C.
difficile without the need for an upfront extraction step. And in the quarter we received CE Mark for the Quidel molecular HSV 1 and 2 VZV test a three-plex real-time PCR assay for the detection of Herpes Simplex Virus types 1 and 2 and Varicella-Zoster Virus in lesions.
We also made progress with Savannah in the quarter per our discussion during our Analyst Day presentation we are on track with both the instrument and the HIV test cartridge and still expect to be in Africa in 2015. And are confident that we will meet or exceed our cost of goods sold targets.
Overall, we had a good productive quarter. I said before the 2013 will be a critical year for us, a year of truth and we have much to prove.
The good news is that we are off to a very good start. Our company is completely focused on the two things that matter namely Sofia and molecular.
Our regulatory and R&D teams are focused on developing new assays, our manufacturing teams are delivering quality products and our commercial group is energized with lots of great products to sell. We are proud of what we have managed to accomplish and are excited about the opportunities that lie ahead.
And now Randy will report the first quarter financials and then we will take your questions.
Randy Steward
Thank you, Doug. As Doug mentioned in his opening remarks total revenues for the first quarter of 2013 were $62 million an increase of 63% as compared to $38 million in the first quarter of 2012.
We realize a 68% increase in domestic revenues and 35% growth internationally. Global infectious disease revenues which include QuickVue, Sofia and Molecular products were $49.4 million in the first quarter of 2013 up 87% from $26.4 million in the first quarter of 2012.
The improvement was primarily due to increased revenue of our influenza products. Influenza products were $28.4 million in the quarter as compared to $7.5 million last year.
The respiratory and general virology revenues from our cell based assays increased 29% over last year. Revenues for the women health category increased by 4% in the first quarter to $88.6 million led by an 8% increase in our pregnancy business.
Our gastrointestinal product category revenues were $1.5 million in the quarter compared to $1.6 million in the first quarter of 2012. Gross margin in the quarter of 2013, was 68% compared to 61% in the first quarter of 2012.
The gross margin improvement was favorably impacted by both product mix and higher volume due to the severity of the influenza in respiratory disease season this year as compared to last year. Total operating expenses were $25.3 million in the first quarter of 2013 as compared to $22.7 million for the first quarter of last year.
Research and development cost in the first quarter were $7.5 million compared to $8.5 million last year. Included in research and development expenses is a $1.1 million expense reimbursement from Life Technologies related to our previously disclosed assay development collaboration agreement.
We are currently estimating the collaboration agreement will have an impact of approximately $1 million in aggregate for the remainder of the year. Sales and marketing expenses in the quarter were $8.4 million compared to $6.5 million in the first quarter of last year.
As we discussed previously starting at the end of the first quarter of 2012, and continuing through the second quarter of last year, we made a significant investment in our sales organization to support new product growth including an increase in personnel. The sales and marketing increase on a year-over-year basis is mostly the result of this increase in the sales organization, as well as an increase in variable compensation due to the higher revenue.
As mentioned at the Analyst Day presentation in March, we expect full year sales and marketing expenses to be in the range of $33 million to $35 million. Expenses for G&A were $7.5 million in the first quarter compared to $5.9 million for same period last year, this increase is primarily due to the cost associated with the 2.3% medical device excise tax that went into effect in January of this year, this amount was $700, 000 in the quarter.
We also realized approximately $400,000 of professional services related to business development activities as well as an increase in incentive compensation. Stock-based compensation expenses for the three months of 2013 were $2.1 million and amortization of intangibles was $5.0 million.
Our tax rate for the first quarter was 27% as compared to 37% in the first quarter last year, included in the current quarter is a one-time benefit of $500,000 relating to the 2012 federal research and development credit. As you may recall, on January 3, 2013, the American Tax Payer Relief Act of 2012 was signed into law reinstating the federal research and development credit for both the 2012 and 2013 years.
Excluding the one-time discreet item from 2012, the estimated full year effective tax rate for 2013 is in the range of 30% to 32%, and includes the impact of a full-year research and development tax credit. Net income for the first quarter was $12.4 million or $0.36 per diluted share as compared to net income of $50,000 or $0.00 per diluted share for the first quarter of 2012.
On a non-GAAP basis excluding amortization of intangibles and stock compensation expense and including the benefits of the research and development tax credit in 2013 net income for the first quarter of 2013 was $17 million or $0.49 per diluted share compared to net income of $3.7 million or $0.11 cents per diluted share for the same period in 2012. Also in the first quarter, the company paid down the remaining $5 million outstanding on its senior credit facility.
At the end of the quarter, the company had $45.9 million in cash on its balance sheet. And with that we conclude our formal comments for today.
Operator we are now ready to open the call for questions.
Operator
(Operator Instructions). Your first question comes from the line of Bill Quirk with Piper Jaffray.
Please proceed.
Bill Quirk
Yeah, thanks and good afternoon guys.
Doug Bryant
Good afternoon.
Bill Quirk
So, first question, I guess I wanted to talk a little bit about the AmpliVue C. diff experience or realized it’s all new, but obviously Doug, you had some pretty positive comments to say.
Can you talk at all about perhaps initial placements, are you seeing competitive takeaways, are you seeing perhaps some accounts that are currently using, say rapid assays and converting over to molecular maybe you could expand a little bit on that? Thanks.
Doug Bryant
Sure, Bill. Initially our view is that the greatest need for the AmpliVue C.
diff product the handheld disposable molecular device with a non-molecular C. diff customer who was currently employing either EIA only or GDH followed by EIA.
That certainly has been true for the most part. But some of our earlier or some of our earlier closes for customers who are using one or more, I’m sorry one of the more prominent molecular methods and these customers have tended to be higher volume customers which we did not anticipate.
But I will also add Bill that the number of these customers is relatively few. So its still very early with C.
difficle, how well our non-molecular customer targeting our work, with this assay going forward and then the others and the future that we will deliver will need to carefully considered.
Bill Quirk
And so Doug, in terms of what’s driving the interest there, is it the price point, is it, you have the ease-of-use say relative to certain of the molecular products that how shall I say have perhaps are less user friendly?
Doug Bryant
It’s easy to use not necessarily easier doesn’t require an instrument that’s a major factor. It has somewhat of the cool factor its unique and its disposable.
And there clearly is a need to move to molecular I think, I think there is recognition in the marketplace. There is molecular testing for these hospital acquired infection is the state-of-the-art and the way to go.
And there is still a lot of customers that haven’t quite made the leap yet.
Bill Quirk
Very good. And then question on perhaps what maybe a new pipeline product, anything or any comment guys around Asian bird flu and whether or not you are working on something there?
Doug Bryant
Sure. First I will start by saying that Quidel doesn’t actually have a P3 facility and does not actually have the H7N9 virus.
So we are not working on anything specifically here. On the other hand, we have been contacted by a couple of different country government agencies that do have the virus and clinical samples and have been asked to participate and we have been asked to participate on a couple of different ex-U.S.
studies in Asia with both our antibody based products and our PCR Assay. Our antibody based test are targeted at a highly conserved region of the nucleoprotein of these -- of all influenza viruses.
So it’s highly likely that our antibodies will bind to this influenza virus. We will know how well our products perform on cultured islets at some point.
But I should caution, we should be careful in thinking about the potential for our QuickVue and Sofia products. As at present the H7N9 virus has not been transported human-to-human, it’s unlikely to be on these patients’ nasal passages in large quantities.
It’s therefore, uncertain whether any rapid test even Sofia would be sensitive at this stage at least until the virus mutates and its transmissible human-to-human. And then finally, I would say regarding our PCR product, we have looked at the sequences and see very high homology with H7N9 as it is today.
If we were to mutate and become transmissible human-to-human, while we are confident that we will detect it how well, we would detect it, would need to be demonstrated with actual clinical samples and so that’s sort of the overview of (inaudible) with respect to H7N9.
Bill Quirk
Great. Thanks very much guys.
Doug Bryant
Sure.
Randy Steward
Thank you.
Operator
Your next question comes from the line of Shaun Rodriguez with Cowen and Company. Please proceed.
Shaun Rodriguez
Hi, guys. Good afternoon.
Thanks for taking the question. On the Sofia manufacturing and your inability to keep up with the demand, I think you said you are back on track with the kits.
But just as a clarification, does that also mean that you’re caught up on placements as I think you’re holding off on placing until you could provide the kit demand as well?
Doug Bryant
We’re still shipping customer instruments and initial stocking of reagents. I would say that our main distribution partner at least historically throughout the first part of the launch has kits on hands.
So, we’re not shipping a lot of product at the moment in terms of cartridges but we are shipping instruments with the idea in mind to have customers who had demand for the instrument to be installed here this quarter.
Shaun Rodriguez
Okay, thanks. And related to that I think you said you’re now preparing yourself for the next time flu hits but again just to be clear, what is this mean for your confidence and your ability to or as to meet RSVs strep and HCG demand when those to get cleared?
Doug Bryant
The issue that we had in the fourth quarter and then our supply in the first quarter and those are unrelated.
Shaun Rodriguez
Okay.
Doug Bryant
We had a large amount of replacement product that needed to be shipped and therefore we were both replacing product as well as shipping new products to customers. And then recognizing that some of those customers were reordering product again in the middle of epidemic is what the issue was.
And so, we didn’t have the benefit as we do normally of building inventory which we pouch here prior to the season. So, I wouldn’t anticipate that we’re going to have a similar issue with any other products.
Shaun Rodriguez
Okay, thank you. And then on AmpliVue, I think it was back in January, I’m talking about the launch, you said that you really wanted to put a strong push ahead of the CVS meeting and by that time you would have a sense for where you are in that and that might inform you for -- on what you might need from a sales force perspective.
So given that we are there now, can you just provide us an update on this front?
Doug Bryant
Sure. C.
difficle customers are receptive to the format like the data that we’re presenting and some have signed two- to three-year purchase agreements. We’re ahead of our internal forecast in terms of the number of customers at this stage.
And so, I would categories it as so far so good. We also have a number of papers and poster s that we are presenting at CVS which are reflective of the assays performance and that’s pretty good for us as well.
So, I expect to create a little bit of buzz coming out of that meeting and I think that our sales guys would continue making calls and closing a pretty significant number of customers.
Operator
Your next question comes from the line of Steven Crowley with Craig-Hallum Capital Group. Please proceed.
Steven Crowley
Good afternoon gentlemen, congrats on the nice start to the year.
Doug Bryant
Thanks Steve.
Randy Steward
Thanks Steve.
Steven Crowley
On the topic of CVS, upcoming CVS. I was taking a spend through some of the abstracts or the presentations or the papers and there were number on Quidel molecular products both Quidel molecular assays and AmpliVue talking about the potential to avoid reflex testing under the two step method.
And is this just a front of the beginning of the push help us understand where we are in that mindset and how important these presentations are toward changing the mindset?
Doug Bryant
This is one of the early meetings of the year. It’s a meeting at which many key virologists are gathered, many of these we know and so do our competitors because these are key opinion leaders.
And you see pretty good representation of what the companies are planning on delivering at the marketplace at some point in the future. So, you’ll see a number of abstracts written both internally by companies but some also by customers and you’ll see a number of posters presented, you will see a number of presentations made.
And just overall it’s just earliest meeting of the year in which you’ll see a number of papers being presented.
Steven Crowley
Now in terms of the take away from a couple of these experiences and these trials about replacing a two-step algorithm with Quidel Molecular Assays, help me understand, how close you are to really seeing that happen in practice and in some volume that matters to the Quidel Molecular Assay product line?
Doug Bryant
My answer is probably redundant, right now it’s early. We made a lot of calls for closing customers daily.
Most of those customers are those customers using these two-step methodologies. In another words, they’re running EIA in the front-end, I’m sorry, GDH on the front-end and EIA on the back end and making a determination.
And then sometimes, those tests are further sent to other labs for reflex testing by molecular methods. So, those are primarily the customers that are switching to AmpliVue C.
diff at this point. Does that make sense?
Steven Crowley
Absolutely. And now in terms of Sofia and your installation activity now, what’s the major incentive, I mean what’s driving customers to install Sofia and now post to wind down a flu season?
Doug Bryant
There are still pent-up demand for the analyzers and the assay and part of the upcoming season. This is actually the perfect time for customers to get the instrument, get it installed, run their validations to know that.
And most customers do not like to do all that right in the middle of the season. So, you would have seen a number of customers who said, I can’t do it now because I’m right in the middle of the season, they are now installing the instrument in and the running their studies.
Sometimes are in contrived samples that they either had from a third party or that we help by manufacturing, sometimes by testing samples that they had archived.
Operator
Your next question comes from the line of Jeff Frelick with Canaccord. Please proceed.
Jeff Frelick
Yeah, good afternoon folks. So Doug, just on a follow-up on the AmpliVue, the customers that are converting to AmpliVue or they’re going to run it in a frontline format or they’re using as a reflex?
Doug Bryant
They’re running as a frontline format and that I was just pausing because I was wondering if that’s what Steve was asking me as well.
Jeff Frelick
Okay.
Doug Bryant
But customers so far are running it as a primary assay.
Jeff Frelick
Okay. Thanks for that clarification.
And then with respect to Sofia as the sales force starting to do some pre-selling and prep work ahead of the additional assays that are expected to roll out later this year, basically kind of leveraging that installed base priming them?
Doug Bryant
We can do some things but our sales force can’t do is talk about the assay performance characteristics and/or anything really about the assay either for RSV, HCG or strep because they’re frankly not cleared to be marketed. So, we can do some things in terms of studies being presented at some of these shows like the Clinical Virology Symposium, but face-to-face selling of these products to customers, we’re not doing.
Jeff Frelick
Okay. And then just last question, could you share the installed base of Sofia exiting the Q1 and the busy season?
Doug Bryant
We did announce before because we thought that you folks were ahead of certain expectation and we’re running well ahead of it. But it’s not our intent to do and update mainly because as they look at the screen there is a number of competitors who really just dine and know how many we have out there.
And so…
Jeff Frelick
Okay.
Doug Bryant
I don't want to make it that easy.
Jeff Frelick
How about just maybe mix between hospitals and POLs?
Randy Steward
It’s still running about 80% POLs, 20% hospital.
Jeff Frelick
Okay, great. I’ll jump back in the queue.
Thanks.
Operator
Your next question comes from the line of Brian Weinstein with William Blair. Please proceed.
Unidentified Analyst
Hi, guys, this is Matt in for Brian. Thanks for taking my question.
Last quarter, imagine that QuickVue in particular has benefited by the strong flu season but the commentary this quarter, I caught was that so high demand across the entire platform. Could you just maybe provide a bit more color on the first quarter flu versus fourth quarter flu?
Doug Bryant
First quarter flu, one of the – that’s the breakdown we had about we said that we were going to do 45% in Q4 and 55% in Q1. And the actual Randy ended up being 48%, 52% something like that.
So we probably were short of our forecast by about a week and most of the demand of course still so far for our flu products in terms of volume is for QuickVue. Although, I will say that we were pleased with how well we did with Sofia and we were also pleased with how well we did with the PCR product although our number of customers was very small each of those customers had fairly significant volume so overall I thought we did fine with respect to this respiratory season both in Q4 and Q1.
Did that help Matt?
Unidentified Analyst
Yes, thanks Doug. And then just one quick other one here.
The gross margin number that we saw I'm assuming the highest we’ve seen in a while, is that a number that we could think about for revenues up over $60 million just as sort of we parse together at the incremental revenue target for 2015 and the operating margin we might look at, in fact gross margin target reasonable for that revenue number moving forward?
Doug Bryant
The P&L certainly is leverageable and when your higher margin product is the one that’s responsible for the list, the answer to that question would be yes. But on average, it’s not that high what else can I say.
So it would be difficult to say above any dollar value.
Unidentified Analyst
Okay.
Doug Bryant
It depends on the mix and as they came in the second and third quarter since it’s not probably flu.
Unidentified Analyst
Right.
Doug Bryant
I'm going to suggest that it probably would not be at 68.
Randy Steward
We’ve certainly have said Matt that as you are saying in our strategic plan as we target a 30% operating margin we fully believe that we can achieve a 65% plus operating gross profit margin over the next few years.
Unidentified Analyst
Great. Thanks guys.
Operator
Your next question comes from the line of Nicholas Jansen with Raymond James & Associates. Please proceed.
Nicholas Jansen
Hey, guys two questions first on the incremental revenue you guys expect to get by 2015, I was wondering if you can maybe help us frame the opportunity in 2013 relative to kind of getting toward that target so we don’t trying to get ahead of ourselves with regards to some of that new product revenue contribution this year.
Doug Bryant
I don’t really think I can help you out specifically with 2013 as we don’t provide guidance necessarily. What I can say is a key driver to our ability to hit that $100 million incremental revenue in 2015 as the number of Sofia placements as I mentioned earlier we do have three new assays which could be cleared and time to have an impact in 2013.
And our model certainly says there will be some benefit but most of the real huge – most of the significant uptake would be with a big (bonus) of analyzers as we enter 2014. And I would add then we should see some acceleration of the top-line also as a result of both AmpliVue and in a similar manner with the Quidel Molecular PCR products.
Randy Steward
Nick I also think that our cannibalization rate is consistent with what we’ve said previously as well. So that’s following our kind of our long term modeling expectation.
Nicholas Jansen
Okay, that’s helpful. And then looking at kind of SG&A trends, I know the medical device tax hit harder this quarter because of the strong flu sales, I mean maybe you can kind of walk through your expectations for the balance of the year on SG&A I know you gave some commentary on sales and marketing.
Randy Steward
Yeah. I mean in the quarter there was probably as indicated maybe some one time expenses we don’t see incurring here in the back half of the year medical excise tax I think we said we thought was probably in the mid 2 million range.
We did see because of the profitability this quarter versus full year the incentive compensation was a little more this quarter than probably you’ll see in the out quarters.
Nicholas Jansen
Thanks so much.
Randy Steward
You bet.
Operator
(Operator Instructions). Your next question comes from the line of Ross Taylor with CL King.
Please proceed.
Ross Taylor
Hi, just had a couple of questions. First, can you elaborate at all in terms of what specifically might have caused some of your supply constraints with the Sofia cartridges and whether that might be a material issue going-forward or might spring up again?
Doug Bryant
That question was just asked a second ago.
Ross Taylor
Oh sorry missed that.
Doug Bryant
But maybe I can add a little bit of clarity. We manufactured both for new customers, customers reordering, customers starting up as well as replacement product.
We did all that as we are in the middle of the epidemic. So we didn’t have the advantage of building inventory prior to this season as we normally would.
Right now for example for 2013 year-end we are already building both QuickVue product and Sofia product. So by October we will have all the products that we think that we’re going to need for the following season with safety stock, we didn’t have that advantage with Sofia.
Ross Taylor
Okay. And just with regards to the flu market I don’t know if you can talk to the competitive environment during the quarter.
Did you see much change in kind of pricing or market share shift among your various competitors and yourself?
Doug Bryant
Yeah, I don’t think we saw any specific change in competitive dynamics in this last season. I do know that several competitors are talking about new products and again we just talked earlier about these shows like CVS are good places to find out what these competitors are planning.
But for this last season we didn’t really see any significant share shift either way. And I really didn’t see any competitive dynamic that was strange or unusual.
Ross Taylor
Okay. And last question, just a modeling question, but amortization expense jumped up to about $5 million compared to $4.1 million in Q4, if I’m not mistaken.
I just wonder what’s driving that sequential increase?
Randy Steward
It’s driven Ross by the Alere settlement. As you know we - the accounting treatment we’ve indicated its $8 million for the full-year but we also take it as a percentage of sales and since the sales percent was a lot higher in Q1 this year versus last year there is a higher amortization amount.
Ross Taylor
Okay, got it. That makes sense.
Okay. Thanks very much.
Randy Steward
You’re welcome.
Operator
Your next question comes from the line of Steven Crowley with Craig-Hallum Capital Group. Please proceed.
Steven Crowley
Hi, guys. Thanks for taking a couple of follow-ups.
In terms of the sales force priority or the molecular diagnostics sales force priorities and opportunities obviously AmpliVue is a big priority. But it seems like you put more clubs in the bag around the Quidel Molecular product line especially with what you are doing with Life and their QuantStudio Dx platform and some of the opportunities that might present there.
How are you prioritizing those opportunities for your sales force?
Doug Bryant
For AmpliVue we are using our general sales force that the typical sales representative who has a geographic responsibility. For the Quidel Molecular PCR products, we are using a smaller specialist organization that’s targeted at the higher end customer who typically already has molecular lab.
So it’s almost two different sales forces. And we are targeting AmpliVue C.
diff based on the criterion that we talked about before that customers who aren’t currently doing molecular testing for the Quidel Molecular it’s basically targeted customer-by-customer based on what we know their needs to be.
Steven Crowley
And then in terms of Life and the opportunity to leverage what they are trying to do in diagnostics. Does that present as a pretty legitimate opportunity?
Doug Bryant
The most significant opportunity we believe in the future would be access to the QuantStudio Dx which is the new upgrade if you will to the 7500 Fast Dx. We have exclusive rights as we stated in one of our public filings.
And in addition, we’ve got access to certain IP that we thought was useful for developing quantitative PCR assays those were the two main things. In addition, as you know, we have the relationship in which we develop assays for them.
But in terms of commercial opportunity, we think that there will be customers at some stage, who will want to have some consolidation of menu onto a platform that could serve multiple purposes and I think the QuantStudio could be that analyzer.
Steven Crowley
That’s helpful. Now your 8-K filing with the buyback alterations moving it to $50 million is that just housekeeping or how should we interpret what you are doing there?
Doug Bryant
This little interpretation there Steve, we had already in place a buyback authorized that authorization was set to expire. Our board in the last board meeting suggested that we re-up it basically and revise it to a number that made more sense.
Steven Crowley
That’s helpful. Thanks.
Operator
Your next question comes from the line of Bill Quirk with Piper Jaffray. Please proceed.
Bill Quirk
Yeah. Thanks.
Just one quick follow-up for me and that is Doug and perhaps I misheard you but I thought you mentioned reiterating some of the pipeline timelines for Savannah. But then I thought, I heard you say Africa in 2015, did I hear you correctly or perhaps is I guess, our understanding (inaudible) Africa is 2014 and U.S.
and other developed worlds were 2015?
Doug Bryant
During the Analyst Day the presentation that we did suggested that we would have ongoing studies in analyzers in Africa by 2014. When I’m talking about 2015, I’m talking full launch.
Bill Quirk
Perfect. Thanks for the clarification.
Doug Bryant
Sure.
Operator
That is all the time, we have today. Please proceed with your presentation or any closing remarks.
Doug Bryant
Well, this concludes the call for today. Thank you for your time this afternoon and thanks to everybody for your continued support.
Thanks everybody.
Operator
Ladies and gentlemen, we thank you for your participation and ask that you please disconnect your lines. Good-bye.