Quidel-Ortho: A Merger of Contrasts

In 2021’s most notable IVD merger and acquisition, San-Diego, CA-based Quidel announced an acquisition of Raritan, N.J.-based Ortho Clinical Diagnostics. Both companies are in Kalorama’s IVD Market “Top Tier”  And they couldn’t be more different.  Quidel tends to sell to the clinic, Ortho Clinical to the hospital.  Quidel sells flu and respiratory infectious disease tests, Ortho Clinical is known for large analyzer systems that type blood, do mass antigen screening, and perform clinical chemistry tests with efficiency for healthcare systems.

Yet these differences should bode well for complementary business and cross-distribution.

They are both good names, and good at what they choose to do.  If you have received a rapid flu test recently, it might have been a Quidel.  If you got your blood typed in a hospital, it might have been Ortho.  Quidel sells products in point of care (POC) settings and Ortho Clinical is a well-known staple provider to traditional laboratories.

At six billion dollars, the deal is nearly 3 1/2 times Ortho’s revenues, per information from Kalorama’s The Worldwide Market for In Vitro Diagnostic Tests, 14th Edition.

A prediction that Quidel would buy Ortho a few years ago would have been greeted with incredulity, but COVID-19 has changed a lot of things.  Quidel recently enlarged by COVID-19 testing, while Ortho Clinical Diagnostics, one time a part of J&J, sought a buyer for years before going public in the beginning of 2021.  The events demonstrate the increased importance of point of care in testing.  The company that can get results at the point of care drives the future.  COVID-19 made that point visible, but it was always in the mix prior to the pandemic.  POC markets (and the companies that served them) grew faster than non-POC markets.   Quidel brings innovation and distribution in near-patient channels, Ortho Clinical brings in large clinical laboratories internationally, and a reputation for service (Ortho Clinical was a winner for Service and Support in IMV’s Service Trak awards – https://ir.orthoclinicaldiagnostics.com/news-releases/news-release-details/ortho-customers-rank-company-no-1-service-and-support-sixth).

And so Quidel Corporation and Ortho Clinical Diagnostics announced Dec. 23rd that they have entered into a definitive agreement in which Quidel will acquire Ortho, one of the world’s largest in vitro diagnostics companies, for $24.68 per share of common stock using a combination of cash and newly issued shares in the combined company. Ortho Clinical, which had been purchased from Johnson and Johnson by The Carlyle Group in 2014, debuted as an IPO at $17 per share in January of this year. The deal is worth  $6.0 billion. The transaction is expected to close during the first half of fiscal year 2022, subject to customary closing conditions.

A prediction that Quidel would buy Ortho a few years ago would have been greeted with incredulity, but COVID-19 has changed a lot of things.


In terms of products, the combined companies offerings will be diverse.  Quidel Corporation markets diagnostic applications in infectious diseases, women’s health and gastrointestinal diseases. The company sells its products for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, universities, retail clinics and wellness screening centers.  Ortho-Clinical Diagnostics produces in-vitro diagnostics equipment and associated assays and reagents. Ortho’s largest segment, Clinical Laboratories, develops clinical chemistry and immunoassay tests, targeting primarily small/medium size hospitals.

Their product lines, at least in Kalorama’s summary analysis, should not get in each others way.  Quidel’s products are marketed in the United States through a network of national and regional distributors, and a direct sales force. Internationally, it sells and markets primarily in Japan and Europe through distributor arrangements. Marketed under the Sofia, QuickVue, D3 Direct Detection and Thyretain brand names, as well as under the new Solana, AmpliVue and Lyra molecular diagnostic brands, Quidel’s QuickVue At-Home OTC COVID-19 Test is sold at more than 7,000 CVS Pharmacy locations across the United States.

Ortho markets immunohematology products used by blood banks and hospitals to determine patient-donor compatibility in blood transfusions. Ortho also develops and markets equipment and assays for blood and plasma screening for infectious diseases. More than 20 years ago, the company introduced the first test for the detection of antibodies to hepatitis C and has since remained a leader in the marketing and development of instrumentation and reagent systems for blood typing. Further automation of rare phenotyping using Ortho’s instrumentation is expected in the future.

The standard warning – in IVD as well as other industries we are sure, mergers beget mergers.  So it will be interesting to see who steps up to compete.