Good day everyone and welcome to the OraSure Technologies 2008 second quarter financial results conference call and simultaneous webcast. As a reminder, today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. (Operator instructions) For opening remarks and introductions, I will now turn this call over to Judy Clarke at OraSure Technologies. Please go ahead.

Good afternoon everyone and thank you for joining us today. I would like to begin by telling you that OraSure Technologies issued a press release at approximately 4:00 p.m. Eastern Time today regarding our 2008 second quarter financial results and certain other matters. The press release is available to you on our website at www.orasure.com or by calling 610-882-1820. If you go to our website, the press release can be accessed by opening the Investor Relations page and clicking on the link for News Releases. This call is also available real-time on our website and will be archived there for seven days. Alternatively, you can listen to an archive of this call until midnight, August 12, 2008 by calling 800-642-1687 for domestic or 706-645-9291 for international. The access code is 56781070. With us today are Doug Michels, President and Chief Executive Officer; and Ron Spair, Chief Operating Officer and Chief Financial Officer. Doug and Ron will begin with opening statements which will be followed with question and answer sessions. Before I turn the call over to Doug, I must also remind you that this call may contain certain forward looking statements, including statements with respect to revenues, expenses, profitability, earnings per share and other financial performance, product development performance, shipments and markets and regulatory filings and approvals. Actual results could be significantly different. Factors that could affect results are discussed more fully in the SEC filings of OraSure Technologies, including its annual report on Form 10-K for the year ended December 31, 2007, its quarterly report on Form 10-Q and its other SEC filings. Although forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements may not be reliable. The company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances after this call. With that, I'd like to turn the call over to Doug Michels.

Okay, thank you, Judy, and good afternoon everyone and welcome to our second quarter 2008 conference call. In our press release issued earlier today, we announced our second quarter results and provided an update of our third quarter financial guidance. Ron Spair will review both of these in a few minutes. Our second quarter revenues were in line with our guidance and we did a bit better than our guidance on the bottom line. As Ron will further explain, we are changing our policy for updating forward-looking guidance beginning with this call to provide a forecast for only the next quarter, in this case, the third quarter. Following Ron’s remarks, I will address the recently-reported performance issues involving our OraQuick test and then describe additional business developments including the progress we are making in our major clinical and development programs. We will then conclude the call by opening the floor for your questions. Before turning the call over to Ron, I would like to address two other announcements which we made earlier today. Before today’s call, we issued a second press release announcing a share repurchase program. Under this program, we may purchase up to $25 million of our common stock based on market conditions, at times and prices to be determined in our discretion. Our Board of Directors has authorized this repurchase program primarily because we think the price of our common stock does not reflect the earnings potential of the company. While we are working through near-term challenges in certain segments of our business, we are confident that achievement of the company’s long-term goals is still on track. Specifically, the replacement of lost revenue from the cryosurgical channel has been a significant challenge. Not surprisingly, when guidance was adjusted lower earlier this year, the stock sold off, putting…

Thanks, Doug. First, I'll start with a brief review of the second quarter results. Total revenues for Q2 were in line with guidance at $18.9 million. Increased sales of our OraQuick ADVANCE and insurance risk assessment products and higher product development revenues, were offset by expected decreases in revenues from our cryosurgical products and lower substance abuse testing sales. A 9% growth in our infectious disease revenues was the result of continued strong performance by our OraQuick ADVANCE HIV test in an increasingly competitive environment. Sales to public health during the quarter increased 25% over 2007 as a result of continued growth in our base business and incremental sales driven by the Centers for Disease Control and Prevention's efforts to increase HIV testing among populations disproportionately affected by HIV. International sales of OraQuick increased 36% compared to the same period in 2007, largely as a result of a 48% increase in revenues from Africa. Our sales to Abbott decreased 4% as a result of their ordering patterns for the US hospital market. Our cryosurgical revenues during Q2 experienced an overall decrease of 52% compared to 2007. This was expected because of the absence of US OTC sales in the current quarter, resulting from the termination of our distribution relationship with Prestige Brands at the end of 2007. Second quarter 2007 sales to Prestige were $983,000. Our international OTC sales for the second quarter of 2008 were $1.1 million, a 64% decrease from 2007 that resulted from reduced sales in Europe as well as the absence of sales in Mexico. As we explained during our first quarter conference call, our Latin American distributor, Genomma, reduced its purchasing level this year in response to an increase in return product from retailers due to overstocking during the winter months. Second quarter cryosurgical sales…

Thanks, Ron. And we will now discuss various strategic and other business matters. As you know, there were recent reports by the CDC and in the media regarding a slightly-elevated number of discordant results from the use of our OraQuick ADVANCE HIV test with oral fluid at several STD clinics operated by the New York City Department of Health and Mental Hygiene. While discordant results did occur at these clinics, we believe the public reporting of these events was not very balanced and did not present an accurate or complete picture of the performance of our test. I think you know that all screening tests generate a certain percentage of false positive results. This happens with our tests as well as the blood tests sold by our competitors. That is one of the reasons why specimens that screen positive for HIV must be confirmed by additional testing. Data from the STD clinics in New York for the period October 2007 to April 2008 showed an average specificity of 99.4% or two-tenths of a percent below the lower end of the expected range of specificity of 99.6% for our OraQuick ADVANCE test. In terms of overall accuracy, the deviation from expected performance occurred during a limited period of time at a small number of testing sites. As we previously announced, we have collected national surveillance data for approximately 400 sites and over 250,000 individual tests during the same time period as the New York City data. This data indicates that our tests performed at 99.8% specificity across the country, excluding the New York data. Moreover, specificity with oral fluid in the New York City STD clinics returned to 99.9% during the month of May with nearly 5,000 oral fluid tests performed. This performance is at the upper end of our FDA-approved…

(Operator instructions) And your first question comes from the line of Ed Shenkan with Needham & Company. Ed Shenkan – Needham & Company: Thanks, Ron and Doug. Are we doing financial questions first and then others, or just everything together?

Everything together. Ed Shenkan – Needham & Company: All right, good. The Walensky article from the Annals of Internal Medicine showed specificity of 96.9% with 849 patients. What implications do you think that is going to have on the OraQuick product going forward?

Ed, this study that was conducted at Brigham and Women’s was a study conducted in early 2007. It was actually presented earlier this year at a retrovirology conference. This was a study that was done on, as you indicate, a relatively small sample size. There were a number of individuals who refused confirmatory testing as part of this study, and you will also note that approximately half of those tests that went on for confirmatory testing were Western blot indeterminate. I think that like any study of this nature, you know, it has to be evaluated in the context of the national performance of the product and how the product is performing elsewhere. I highlighted in the previous comments, the study that was also presented in the Peer Review Journal in December of 2007, this was a study that was conducted at George Washington University Hospital, again an application of the OraQuick test with oral fluid. The study was conducted in late 2006. There were 2,500 or 2,486 subjects tested in this study and the specificity was 99.8%. You know I think all these things have to be taken in context and I don’t anticipate this is going to have any impact on the product. Like I said earlier, we have a robust system for monitoring and managing the performance of our products and all the data that we have indicates the product is performing exactly to its FDA-approved product claims. Ed Shenkan – Needham & Company: You mentioned on the OraSure product, you know, that you are doing a newer confirmatory test, different things going on there. Is there any change on your revenue expectations for that OraSure product, is there anything going on, other than what you mentioned here about it?

No. You know, the OraSure revenues have been declining on a quarterly basis I would say, generally accurate statement, primarily we believe due to some cannibalization from the OraQuick rapid antibody test. But the OraSure collection device still remains a valuable tool for collecting a non-invasive sample, both in the public health sector as well as in the insurance testing market and we expect that that business will continue to be an important contributor for the foreseeable future. That is why we are working on validating and getting FDA approval for a replacement assay to be used with the oral fluid collector. Ed Shenkan – Needham & Company: And your guide for the third quarter of $16 million to $16.5 million; is that below what you were previously expecting? Just trying to figure out, you know, you withdraw your 2008 guide, trying to understand if it is because that 2008 guide was too high, or is that an incorrect conclusion to draw?

I think you know, since the last call there have been further developments in the business, including some delays and reduction in the total number of OraQuick devices being purchased pursuant to the CDC initiatives, continuing delays [ph] in the US marketplace for substance abuse testing as Doug talked about, and as I had mentioned, diversion of lower priced international products into the US professional Histofreezer marketplace. So, all in all, a combination that resulted in a lower number fro what our – currently than what our expectations had been previously. Ed Shenkan – Needham & Company: That is helpful. Thank you.

And your next question comes from the line of Aaron Lindberg with William Smith & Company. Aaron Lindberg – William Smith & Company: Thanks. What progress are you having in your dialogue with government bodies, HHS, CDC, NIDA, things like that, for funding for rapid HCV testing?

We have forged a very strong dialogue with NASTAD, the National Association of State and Territorial AIDS Directors were very supportive of advocating for increased funding for HCV prevention efforts. We are in discussions with the VA health system, who also are keenly interested in expanding HCV testing along with HIV testing. The Substance Abuse and Mental Health Services Agency is keenly interested in deploying rapid hepatitis-C testing into their patient population, which is disproportionately impacted by hepatitis-C, and so we have a lot of activities ongoing to ensure that once the product is made available, that people are going to be prepared to begin using it. Aaron Lindberg – William Smith & Company: Okay. To follow up on Ed’s question, what specifically is your strategy to proactively address the issues of specificity and false-positives? It is something we have talked about obviously for a long time on the call, this here are the things that have popped up from time to time, but can you help us understand what is your strategy for dealing with this, it is likely to continue to happen when you look at smaller sample sizes, but what can be done proactively to deal with it, because when it pops up in the press, it is certainly going to provide a challenging environment for you?

Right. And I think, you know, I want to just reemphasize that, first of all, we are talking about a very infrequent event. The product as we have disclosed and published data and share our surveillance data performs routinely at 99.8% specificity. We have been in dialogue with New York City and as we emphasized in May, their performance went right back to 99.9% specificity. So, as we go to investigate the cause of any reported false positives, we are dealing with a very, very small number of subjects in a very rare occurrence. Our test, performing at 99.8% specificity, is one of the highest performing assays in diagnostics, whether it is laboratory-based or rapid-testing based. That does not mean that we are not trying to identify what is going in those rare instances, and we are looking at patient-related factors, I mean, that becomes difficult because you have to call those patients back and generally health departments are somewhat reluctant to do that. The other option is to initiate a prospective study looking forward, but that would require tens of thousands of patients, subjects to get a statistically-relevant number of false positive test results with a product like ours that performs so well. So this is a very challenging issue, primarily because the test is so robust. Aaron Lindberg – William Smith & Company: Yes, I guess my question, what I'm really trying to focus on is really the PR aspect of it, not so much – I think I have a good grasp on what you do at the individual facilities and how do you go back and try to tackle it and sometimes it is challenging to get the information, but you know, in the media and on the competitive front, how do you deal with it there?

Well, and that is where I think we have to continue to do as good a job as we can to communicate, to share our surveillance data, to make sure people are aware of these studies like I referenced in the call from GW that was published in the Peer Review Journal. You know, these don’t get the same level of press coverage because it is not a sensational story, but they are equally relevant and I think reflective of how the product is performing. I think it is also important that we look at the specifics of – in this example, the Brigham & Women’s commentary, you know, they say that we continue to use this test in our study at Brigham & Women’s Health emergency department, we recognize that screening tests have trade-offs and this is a very valuable tool. The advantages are that it is easy to use, acceptable to patients, and has correctly identified cases of infection that we otherwise would have missed. So it has to all be taken together. We have got to do a better job communicating and we are committed to that, but the test is performing exceptionally well. Aaron Lindberg – William Smith & Company: Okay, one other quick one and I'll jump back in the queue here. In the NASTAD report, the highest-rated factor in determining which test to use is price. What is your strategy for maximizing your leadership position in the public health market?

You know, Aaron, I think the data also speaks for itself. While people will respond to a survey and say that the number one determinant for using a product is price, the fact is that 20 of the 23 jurisdictions in the most-recent CDC funding initiative used OraQuick as their frontline test; and as you know, it is not the least-expensive test. So how they respond to a survey and how they behave in actual practice has to do with the versatility of the test, the accuracy of the test, the ease of use, the patient acceptability of the test, the performance of the test, and of course price comes to play. So, it is all about value. And, I think that over the last several years, where we have competed with lower-priced assays, we have continued to demonstrate that we are delivering value to our customers; we are not resting on our laurels; that we continue to sell the value every day. So I think that the results speak for themselves, I think we are holding our own. Aaron Lindberg – William Smith & Company: Great, thanks. I'll jump back in the queue.

And your next question comes from the line of John Putnam with Dawson James Securities. John Putnam – Dawson James Securities: Yes, thanks. I wondered if you might elaborate a little bit on what is going on with Abbott and when you might expect to see some you know, increased sales to the hospital market.

You know Abbott’s out sales in June were the highest month that has been recorded since we have been in the relationship with them. That being said, as we have mentioned previously, we want to do a better job in the hospital market and we want Abbott to do a better job in the hospital market as well. One of the issues that we deal with that is very hard to quantify is a number of hospitals in the US market actually work in collaboration with their public health partners; to give you an example in Washington, D.C., where the D.C. Department of Health purchases tests from us directly and then they in turn distribute those at no cost to several hospitals. And we are seeing more of that take place, as hospitals work with public health departments to expand rapid testing and to implement routine screening in their emergency departments and the like. So, you know our data says that the hospital consumption of units is actually increasing more than what is showing up in our transfer to Abbott reports, and we will try to give as much visibility as we can to that as that trend increases, but the hospital business is strong, obviously we want all of our businesses to perform better. John Putnam – Dawson James Securities: So it sounds like you are competing with yourself here then.

No, actually what happens is when we sell into the public health market at a little higher ASP, so there is some benefit. John Putnam – Dawson James Securities: Okay, then talking about the CDC funding, where are we kind of in that cycle now, Doug?

Well, the incremental funding, the $35 million that was granted and distributed to the 23 jurisdictions back in September of 2007; that was to be spent October 1 through September 30, 2008. So we are inward through nine months of that. We have not seen the level of deployment nor consequently purchase of rapid tests that were originally expected out of that original CDC deployment. If you recall, when the CDC announced this program, they indicated that they were going to make $35 million available to 23 jurisdictions and their target was to test 1.5 million incremental individuals and they hope to yield an incremental 25,000 additional positives. Shortly after the grant was made, they reduced their expectations down to 1 million incremental individuals and approximately 20,000 newly-identified positives. As we projected, our 2008 revenues from this new initiative, we took what we believed at the time was a very conservative approach to forecasting. We actually discounted the expected number of tests that we would expect from the CDC program and we obviously factored in the percentage of sites that we believe were going to be using the OraQuick ADVANCE test for their screening programs. Unfortunately, where those jurisdictions are right now is we believe they are going to come in woefully short of that million units of incremental tests that they have committed to and receive funding for and why are they going to be short? I think part of it is just some deficiencies in execution; part of it is the fact that the CDC has indicated to those sites that they would be able to carry over those funds into the fourth quarter and into 2009. The CDC has also emphasized and committed to the jurisdictions that they will be refunded for fiscal year 2009. So, the accountability issue has not really been all that strong. You probably picked up out of the International AIDS conference in Mexico, the CDC just released their new estimates, where they indicated that estimated incidents of HIV infection is up 40% versus previously-reported estimates, and I think there is going to be – I know, we have already seen it from the Latino Commission on AIDS, the National Black Leadership Commission on AIDS, the Black AIDS Institute, there is enormous pressure on the CDC as well as the US government to make sure that the money follows the epidemic, and you know, all this money was targeted towards the heightened response to HIV/AIDS among African-Americans, and I think there is going to be congressional hearings relative to this and I think there is going to be a national call to action, which I think is a) is appropriate; and b) I think is going to be good for the company over the coming years. John Putnam – Dawson James Securities: Thanks very much.

And your next question comes from the line of Sean Pevik [ph] with SIG. Sean Pevik – SIG: Hey guys, how are you doing?

Hey, Sean, how are you, Sean? Sean Pevik – SIG: I'm good. With regards to your third quarter guidance, it is about $3 million below what you guys did this quarter. Is there something you can talk about more specifically in terms of one of the areas that you see impacting this and why we should see that decline so much?

I would say that the sequential revenue decline emanates primarily from the cryosurgery area, and that is from the impact that we see on both the domestic and international Histofreezer professional product as a result of this diversion issue that I spoke of, as well as at this moment in time, lack of visibility to orders in the international OTC marketplace, primarily with our partner, SSL in Europe. Sean Pevik – SIG: So this wasn’t necessarily anything you are seeing from the OraQuick product?

No, but I did mention that – and as Doug just elaborated on the timing and reduction of OraQuick devices purchased relative to the CDC initiative is below our expectations. Sean Pevik – SIG: Okay, and with regards to Hep-C; when is the earliest you guys see approval for this?

You know, we typically haven’t commented on expected approval dates, because that is out of our control. What we have indicated is – and you know, this goes back several calls I think, that we are going to submit the summer as I mentioned earlier; we still intend to have our submission in the next month as we have planned. Sean Pevik – SIG: So you submit in September for the PMA?

That is right. And then it is in the FDA’s hands as to – you know, review time and – we are very pleased, just so you know, with how the program has gone, we are crunching the data right now, it is a big data set; you know, we took five samples from – analyzed five samples from every subject, finger stick, venous whole blood, serum plasma and oral fluid, so we are dealing with more than 10,000 data points. Now that all has to be crunched and tabulated and analyzed and gift-submitted, but every indication is that the products performed consistent with the information we have shared in almost six of the AACC, most recently at the American Society of Microbiologists and we are looking forward to getting it all in and ultimately getting the product approved. Sean Pevik – SIG: Okay. One last quick question. Do you guys know the specificity of the competitors products for the HIV blood test, cheaper one?

Absolutely, and several of them are substantially below our oral fluid specificity. To give you an example, Trinity’s test is 99.7% with a very broad 95% confidence interval, 99.0% to 99.9%. MedMira’s test is 99.1% specific. And as with serum with plasma, it is even worse, 98.6%. The most recently approved laboratory-based test that came from Johnson & Johnson is the automated immunoassay, the vitro HIV test is 99.6% with a broad confidence interval and in their clinical data, the five false positives – of the five positives, only one of them confirmed. So they had 20% confirmation rate on their initial positives. So, you know, all these things – it all has to be understood in context. And you know, I think Aaron, you asked the question about you know the public relations and the publicity issue, we guys do a better job with that, but the test continues to perform exceptionally well. Obviously, we will let you know if it doesn’t, but we remain highly confident. Sean Pevik – SIG: What was the confidence interval for your product, again?

It is 99.6% to 99.9%. Sean Pevik – SIG: Okay, thank you.

Absolutely, thank you and I think that is going to wrap up the call tonight and I want to thank everybody for joining us, appreciate your comments and look forward to talking to you next quarter.

And this concludes today’s OraSure conference call. You may now disconnect.