Ladies and gentlemen, thank you for standing by. Welcome to the Quidel Corporation Fourth Quarter and Full Year 2010 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 would now like to turn the call over to Mr. John Radak. Please go ahead.

Thank you. This is John Radak, Chief Financial Officer at Quidel. Thank you for participating in today’s call. Joining me today is our President and Chief Executive Officer, Doug Bryant. Today Quidel released financial results for its three months ended December 31, 2010 as well as for the full year. If you have not received this news release or if you would like to be added to the company’s distribution list, please call Ruben Argueta at Quidel Corporation at 858-646-8023. 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, February 24, 2011. 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. For today’s call, I will report on the financial results for the quarter and year-to-date and speak to our financing activities. Doug will talk about our accomplishments in 2010, our near term growth drivers and things to watch for in 2011. We will then open the call to your questions. Total global revenues for the fourth quarter were $31.7 million compared to $66.6 million in the fourth quarter of 2009. The prior year period was abnormally high due to 2009 flu pandemic. DHI contributed $10.5 million of revenue in the quarter, partially offsetting the revenue decline. In the following comments on revenues, I will compare our business on a pro…

Thank you, John. Last year was an important year for us. Faced with a shortfall of revenues tied to the absence of a meaningful respiratory season, we still managed to achieve a great deal with respect to our three strategic imperatives, developing new products so that we can leverage our existing infrastructure, gaining better control of the distribution of our products and creating a molecular diagnostics franchise. During 2010, we completed the development of six new products QuickVue RSV 10, QuickVue Mononucleosis, RapidVue hCG, the immune complement markers, MicroVue Ba and Sclerostin, and a flu subtyping assay. To be fair, we did have one disappointment and that had expected to launch our second-generation FIT product for colorectal cancer screening mid-year. And as I said before, this project is currently on hold. To be specific, the clinical data did not support at 510(k) clearance. The scientific team that were assigned to the FIT product was moved to our next generation Strep A, which we did not want to delay. As scientists on our current project free up, we will examine restarting our next generation product. On the other hand, during the year we exceeded our expectations in the progress we made in the development of our next-generation rapid plan care platform, the development of the Bobcat, our internal name for an automated DFA slide reading instrument and the molecular diagnostic program. In addition, through the implementation of our inventory management program and the confidence our distribution partners have in our ability to deliver product, inventory levels at distribution partner sites for flu Strep and hCG were the lowest recent history as we exited 2010. Overall, despite the rough financial comparison with 2009, I am pleased with what our team accomplished in 2010. Of course I look forward to seeing what we…

(Operator Instructions) Our first question comes from the line of Ashim Anand with Natixis. Please proceed. Ashim Anand – Natixis: Thanks for taking my question. I was wondering John if you could provide breakdown for the reproductive segment in the other revenue category.

Sure. The women’s health segment revenues in the fourth quarter were 7.5 million, gastrointestinal was 1.7 and other was 1.1. Ashim Anand – Natixis: Wonderful. In terms of international revenues, if you can comment on how they are going? It looks like they are sort of lower than the second quarter of 2010, if I am correct, if you can kind of point to the dynamics over there?

I am sorry, repeat your question. They were lower than which quarter? Ashim Anand – Natixis: Second quarter of this year, of 2010, right.

They were about 11%. They made up about 11% of revenues in Q4 this year. Ashim Anand – Natixis: Okay. And any comments of how the RSV products has been tracking?

You are taking about the new RSV 10 or RSV in total? Ashim Anand – Natixis: Yeah, yeah, no – new RSV 10.

Hi Ashim, this is Doug. We manufactured the (inaudible) at the end of Q4, we began distributing to the channel Q1 2011. One major distributor in the hospital – the physicians’ office segment has this as part of one of its major programs and we have also launched in the hospital segment through our distributors there as well. Ashim Anand – Natixis: Okay. And finally if you guys would like to give us any updates on the M&A front, with the new equity raised you feel comfortable that you could go that part? If you would, what you might be looking for? Any comments on that?

Sure. With respect to the M&A front, we have or we continue to have an ongoing business development effort and we right early look at evaluating opportunities but at this time we don’t have anything further to disclose on that front. With respect to the use of proceeds of the offering as we indicated in the prospectus, we will use those for working capital needs, the acquisition of new technologies, similar to what we did with the North Western deal, the acquisition of diagnostic related companies like DHI and possibly repayment of debt.

And our next question comes from Jeff Frelick with Canaccord. Please proceed. Jeff Frelick – Canaccord: Great. Thanks guys. Doug, maybe with respect to just kind of some visibility from your field reports, at the end of 3Q you had mentioned that there might be some broader number of physicians ordering rapid flu test as a carryover from the pandemic. Are you guys noticing any follow through to that, either late 4Q, early 1Q, more physicians kind of stuck with it ordering rapid test from the pandemic base?

Let me tell you what we are seeing, what our sales guys – what we are actually seeing with respect to flu. First of all, clearly they are seeing that for the most part consistent with what you would see and expect as a result of CTC data that has been published. They did contact a number of physicians as you can imagine over the last couple of months. In fact over the last 6400 calls on physicians’ offices, we confirmed the following in terms of our physician in the market. First, 70.5% of those 6400 customers that we called on during that period were rapid point of care testers of flu. So about 70% of the type of customers we call and who are typically primary care physicians, internal medicine docs, Ob-Gyms and pediatricians. 50.5% of those rapid point of care testers for flu were QuickVue or Quidel’s customers. 46.8% of those customers were Bionix customers. Overall we see about a 55/45 split in terms of actually sales, in terms of market share. And I would conclude that we think there is probably about 55 to 70% adoption rate for flu now which is probably higher than we had expected before certainly in 2007 or 2008 and remember that we were speculating that as a result of the pandemic that the adoption rate would go up and some of what we have seen in 2009 would actually stick and that appears to be the case. Jeff Frelick – Canaccord: Great. It was helpful. And then what is the visibility on respiratory pull through with some flu on the early part of the quarter, are you seeing with respect to RSV?

Yeah, so interestingly the RSV season which typically begins December and goes through January has been somewhat robust and so we are actually showing pretty good results so far with that. I would also add that DHI sales which are very closely tied to when they see the patient much more closely than the way we currently expect with QuickVue product that shift to distribution, that has actually been going up. In addition and finally I would say that Strep A volumes have been significant.

And our next question comes from Ross Taylor with C.L. King. Please proceed. Ross Taylor – C.L. King: I had one topic I wanted to cover, just trying to understand the comments you have in the press about so far in 2011 and I think you made some comments also that I missed in your prepared remarks but when you say it is at similar level to what you saw in 2008, does that really just refer to the March 2008 quarter or does that include some of the sales you had in the fall of 2007 ahead of the season as well?

The comment, Ross, was more general in nature and suggested that a normal season in terms of total volume would be about that size. What we can say, and what John has said publicly before is that the flu – in a typical flu season we would do about 50 to $60 million in QuickVue A+B and A/B sales. In that, two thirds of that would be in Q1. And what we can tell you so far is that we are very much on track to achieve that in Q1. Ross Taylor – C.L. King: Okay. That’s really helpful. Thank you

I can also add a little bit because of what you see in terms of data the CTC data actually still show about 4.5% IOI which is fairly significant relatively to a baseline of 2.5% and when we look at the Google flu map, we still show a significant flu in U.S., Europe and Asia and I would say the two combined directionally indicate that we still are in a flu season for the most part in the Northern Hemisphere. And then I would add that last week the CTC reported that the percentage of cases that were positive for flu was about 35% and that actually is the eighth week in a row since week 51 that it has been above 20%. So what we are showing right now is that the season looks to be about like a 2008 season. And each season differs slightly in terms of when it starts and stops. And probably more detail than you needed but recall that in 2008 that season, it all happened during about a six week period of time, so it all happened in flurry. Whereas this appears to have started in week 51 and we are already in terms of the duration going probably longer than 2008 but right now frankly we are actually lower in terms of IOI percentage at the moment.

And our next question comes from Steven Crowley with Craig-Hallum. Please proceed. Steven Crowley – Craig Hallum: Hey guys. I will join with you in waving good bye to 2010 and looking forward to 2011. That was really useful color on the set up for flu and you talking about the whole season and how it seems to be pushed more into first quarter. I mean the clear math there it is not hard to get yourself into the mid-30s for flu test sales in the first quarter and modest in Q4 from what I can discern just working with the numbers here it is certainly less than $5 million than the flu sales in Q4, is that correct implication from the numbers in the discussion?

For 2010 Steve? Steven Crowley – Craig Hallum: Yeah, Q4 ‘10.

That’s about right. Steven Crowley – Craig Hallum: Okay. So there is obviously a pretty sizeable step in flu dictated by the CTC data in the market reality and the market share stuff you are talking about.

Plus I would add the way that we distribute products. We made a clear and conscious decision to change the way we manage our inventory and our distribution partners have a great deal of confidence of the product and they have managed their inventories down accordingly. So we didn’t see any flu in Q4 until week 51 and 52. So we didn’t ship a lot of product. Steven Crowley – Craig Hallum: Great. That bodes well for this quarter. In terms of the Thyretain business, can you give us as little bit of clarification for what’s happening? You threw out growth rate number, does that imply for the whole year that Thyretain was 5.5 million or little below that or closer to 6, I don’t know what we are comparing against.

Yeah, it is about right Steve. Steven Crowley – Craig Hallum: So low 5s or high 5s?

You are asking whether it is close – it is probably close – I would describe it closer to 5. Steven Crowley – Craig Hallum: Okay. Now you instituted a number of marketing initiatives and at last check it seemed like you were seeing some follow up in terms of prescription orders and uptick of the Thyretain test. I am not sure that the numbers – those numbers necessarily would validate that but are you seeing an uptick in scripts for Thyretain and what are the prospects for ‘11 with Thyretain?

As I said before we grew Thyretain in 2010 over 2009 about 17% and we continue to expect that we are going to accelerate that. Our sales guys, the 30 guys we have on the ground, calling on primary care physicians et cetera reports significant agreement by doctors to begin testing for TSI when presented with patients who have Graves’ disease. How quickly that translates into actual laboratory testing depends on a number of factors, one of which is how many women actually present to physicians with those symptoms and so we will evaluate that over the next quarter or so and see how well the data that we get from our sales team actually ties to big reference lab orders of our product. And I would also that this is a demand creation exercise that we are hopeful and can create a market that should exit. We will continue to spend on the program at least through 2012. But at the end of the day Steve as you know we have three major programs that are our growth drivers, the molecular programs, the Bobcat, and the fluorescent reader. Those are the main engines and we are treating Thyretain as a nice to have an absolute upside should we be able to make it happen. The difficulty with any demand creation product like this is that we are looking for an inflection point and we can’t predict when that is going to come. Once we hit and it accelerates it could be a very robust business, until that it is difficult and we continue to slug it away one doctor at a time, one CME accredited presentation at a time, one reference article at a time et cetera. So we will keep plying our way but we really don’t have any number specifically in mind, honestly internally until we hit that inflection point, then we will worry about forecasting a bigger number.

And our next question comes from the line of Scott Gleason with Stephens. Please proceed. Scott Gleason – Stephens: Hi Doug and John, thanks for taking my questions. Doug, I guess to start off with, can you maybe talk a little a bit about the second generation lateral flow product, and I don’t know if at this time you guys are willing to kind of give out any more information on kind of what the design will look like, time to resolve the cost of the actual capital equipment fees and what the pricing on the test that might differ from kind of the current pricing paradigm.

Sure, I will do my best. That was as multi part question. The design of the product is a cassette based product that looks a little bit like our typical cassette based product. And that product, that cassette is inserted into a (inaudible) that is drawn into the instrument where the instrument reads the result of a fluorescent detection chemistry. The results are available in that 10 to 15 minute timeframe just as they are current with our test today. We expect the cost of capital to be insignificant when compared with major immunoassay chemistry instrumentation. Scott Gleason – Stephens: And now in terms of the actual pricing of the test and actually this would be a premium pricing product. Can you maybe give us any kind of color on kind of how you guys are thinking about that?

A lot of the ability to price at a premium depends on product performance. We’re encouraged with the beta side data and as I said we just started at the beginning of February the clinical trial data. So until we see the sum of all the data, it is impossible for me to know how much better this product will be. If you assume that it is better than if there is a potential for a price premium... Scott Gleason – Stephens: And then I guess Doug this is related to your commentary on Bobcat talking about the timing of the actual clinical trials. If there was a delay and you weren’t able to get enough samples for the different model types, would that have to be pushed back till next respiratory season or how are you guys king of thinking about that in terms of – from a turning standpoint?

There is no real delay in terms of the clinical trial endpoint because in this viral panel we have eight viruses that are actually present or prevalent, I should say, at different times of the year. For example, we don’t really expect to see a lot of parainfluenza at this time I don’t think, we don’t also expect to see a lot of Adeno but we would in the summer. So if we were to start at the end of March, let’s say, the clinical trial or we were to start at the end of April, it doesn’t make a whole lot of difference because the Bobcat trial was always going to have to be longer... Scott Gleason – Stephens: Okay. Douglas Bryant:...in order to see those samples. The fact that there is flu year around, also means that we could actually do the clinical for flu during the middle year as well, but as you can imagine it just becomes extremely hard to find all the positives that you need to find and that makes it all bit more expensive. So I’d rather start earlier rather than later but I don’t expect that it is going to affect when the complete the trial, if that makes sense? Scott Gleason – Stephens: Okay. Great. And then just one last question for John. If you think about pricing on flu test year-over-year, has there been any significant change either to the positive or the negative or that pricing remain relatively consistent with what we start in the pandemic period?

Well, recall during the pandemic period, we eliminated all of our promotional programs. We did a few this year so there will be a little bit of price pressure there but not significant. So we don’t really see a whole lot right now.

Our next question comes from Steven Crowley with Craig-Hallum. Please proceed. Steven Crowley – Craig Hallum: Great guys. Just a couple of quick follow ups. In terms of the whole thyroid testing franchise in autoimmune, in terms of your aspirations to have a bigger platform play there, is – are those aspirations dependent on you seeing that hockey stick or inflection point in Thyretain over the relative short term or do you have longer term things in motion to build out a platform there?

We began in this company in autoimmune business years ago and have been involved in that category for some time, so we continue to look at autoimmune. Of course we would love to see Thyretain be the flagship product and to be successful but we are also – we would remain interested in the autoimmune category just because we have a lot of expertise up in our Santa Clara facility. I should add Steve that we now have entered Phase II with our blocker, the flip side of the thyroid stimulating is the blocking antibodies, that project is now in Phase II as I just said, which means that it is fully funded and underway. So we expect to continue to invest in the area I’d just remark that it is not the only thing that we have that is upside of the company, the main drivers of course are the three major projects that we have ongoing now. Steven Crowley – Craig Hallum: Great. That’s helpful. And then for either you or John, on the expense side, you guys have telegraphed some higher R&D expenses in the first half of ‘11 and then probably you dropped back in the second half and in total how should we think about the upward propensity in R&D expense in 2011 versus all of 2010.

We said previously that we would be flat from year-to-year, 2010 to 2011. Since that description, we had 5.8 million in expense in Q4. It is down because of a couple of factors, one is the amount of expense that we had on Bobcat actually declined. We expect that to tick back up in Q1 however because we are starting off a number of clinical trials.

Yeah, in total, relative to 2010, we would expect R&D spend to be in total for the year up 1 to $2 million and then with significant portion of that being in Q1 and Q2 with as you said trailing down in Q3 and Q4.

And our next question comes from Brian Weinstein with William Blair & Company. Please proceed. Pete Vitali – William Blair & Company: Hi guys, it is actually Pete in for Brain.

Hi Pete. Pete Vitali – William Blair & Company: Most of my questions have been addressed but I was wondering if you guys had any thoughts about but the kind of the breakdown between the physician market and the hospital market on the Rapid side. How much of the risk of going towards the molecular testing?

It remains about the same in terms of testing between physicians and between hospitals as it has in years past, at least that’s what we’re seeing so far. I can tell you that in the hospital segment the molecular testing arena, it really is a completely different segment at least at this stage. Molecular diagnostics is still not mainstream today in terms of the diagnosis of flu, but as it progresses clearly we expect to be there and in fact that is part of our development program to develop molecular assays for respiratory diseases including flu.

Okay. And then just a quick ...

But today in many cases molecular diagnostic testing is in hospitals is used for reflex testing and in some cases for surveillance testing. And I can give you some data also Pete, that might be helpful. Our out sales of QuickVue insulin’s are A plus B thus far actually higher this year than they were in 2008 even though the IOI percentage right now at the moment is actually lower. So if there were a meaningful shift to molecular we would be seeing in our out sales now and we’re not seeing it.

Okay. Interesting. And then, I was wondering if you could give me any commentary on the DHI acquisition and how the accretion, dilution that kind of played out in the end for 2010?

I would say first that the DHI integration overall has gone extremely well, we had cost synergies identified, you may remember the chart of $0.11 and we actually achieved in the year $0.15. In addition to integrating the back-office function, we transitioned the fluorescent reader molecular antibody manufacturing for flu A and B, those duration happens over the DHI. We implemented a project to drive long-term manufacturing efficiencies and we also reorganized the DHI molecular group to actually support and develop the open box assays. So overall we’re thrilled with the integration, how well it’s gone and as I said Pete, on the actual cost synergies we actually delivered a little bit better than we had hoped.

And our next question comes from Daniel Owczarski with Avondale Partners. Please proceed. Daniel Owczarski – Avondale Partners: Yes, thanks. Hi, Doug. Hi, John.

Hey, Dan.

Hi, Dan. Daniel Owczarski – Avondale Partners: Just go back to the clinical trial discussion and you’ve got a number of them starting this year. How confident are you of the protocols and timelines behind these trials, given all the changes and giving restrictor FDA that we’re seeing especially when you’re coming up with pretty unique newer technologies?

We have held pre-IDE discussions with the FDA on each of the trials and we got very specific guidance on what they expect to see in order to demonstrate clinical equivalents and to achieve 510(k) clearance. So based on that and what we saw in the beta side so far for both the reader as well as our open box assays, at least for those two programs I can say quite confidently we’re in very good shape. Daniel Owczarski – Avondale Partners: Okay. And then with the new products that you launched in 2010, expanding the QuickVue line and some of the rapids. What are challenges to get those tests ordered by our customers, I’m assuming it’s straightforward getting the distributors to carry in but how do get those pulled through?

You put the nail on head there in terms of success with those products because they’re not huge products for us or for distribution. It’s important for us to rely up on our brand, equity and strength. It’s also important for us to support the distributor and the programs that they deem necessary in order to launch these products and we have a long history and a terrific relationship with these distribution partners. So we pretty much get what we agreed to in terms of the number of calls and the number of regional meetings, the number of things that are done on behalf of distributors for us. That’s kind of how we have to focus when it’s a smaller products and these very large distributors that we have to rely on. Daniel Owczarski – Avondale Partners: Thank you.

That is all the time we have today. Please proceed with your presentation or any closing remarks.

Well, this concludes the call for today. John and I thank you again for your time this afternoon and for your continued support. Take care everyone.