Earnings Call Transcript - OSUR Q2 2020

Operator, Operator

Good afternoon. With us today are Dr. Stephen Tang, President and Chief Executive Officer; and Mr. Roberto Cuca, Chief Financial Officer. Steve will provide an overview of our quarterly highlights, including an update on our COVID programs. Roberto will review the second quarter financials, and Steve will then provide updates on our other business areas and strategy. We will then open up the call for questions. Before I turn the call over to Dr. Tang, you should know that this call may contain certain forward-looking statements, including statements with respect to revenues, expenses, profitability, earnings or loss per share and other financial performance, product development, performance, shipments and markets, business plans, regulatory filings and approvals, expectations and strategies. Actual results could be significantly different. Factors that could affect results are discussed more fully in the company's SEC filings, including its registration statement, its annual report on Form 10-K for the year ended December 31, 2019, its quarterly reports on Form 10-Q and its other SEC filings. Although forward-looking statements help to provide complete information about future processes, listeners should keep in mind that forward-looking statements are based solely on information available to management as of today. The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. With that, I will turn the call over to our CEO, Dr. Steve Tang.

Steve Tang, CEO

Thank you, Jeanne. On today's call, in addition to our customary overview of business operations and financial performance, I'm going to walk you through why we believe our antigen and antibody tests under development for COVID-19 are extremely well positioned to serve the needs of the testing market and to present an enormous revenue opportunity for OraSure. We think our biggest challenge after obtaining emergency use authorization from the FDA may very well be how to manufacture enough devices to keep pace with demand. We will also be reviewing our segments and highlighting how COVID-19 has helped or hindered various aspects of our business. The net takeaway on our financial performance for the remainder of the year is that we believe the back half of the year is looking very strong. As a result, we expect the company to post year-over-year revenue growth and to further execute on our innovation growth strategy. For those of you not familiar with OraSure, we are experts in rapid point-of-care testing for infectious disease, sample collection, and stabilization for molecular testing, and laboratory and bioinformatic services for microbiome analysis. These capabilities position us well to respond to the global testing needs the COVID-19 pandemic has created. We have a long and proven track record of applying our scientific and technological expertise to developing innovative sample collection kits and accurate tests for infectious diseases. We've been able to respond quickly to the COVID-19 pandemic, working with regulators like the FDA and other stakeholders while scaling up for global markets. We have existing broad, well-established channels of distribution across global public health, laboratories, employers, hospitals, physician offices, pharmacies, and direct-to-consumer. And as we discussed last quarter, some existing products are already addressing certain aspects of the COVID-19 testing market. We're leveraging our expertise to address the COVID-19 pandemic in three specific ways. First, our sample collection devices are being used for the collection, both in-home and professional settings, and transported samples for COVID-19 molecular tests. In addition, we're developing two COVID-19 tests that we believe could be key contributors to the existing testing paradigm: the OraQuick Coronavirus Rapid Antigen Self-Test and the OraSure SARS-CoV-2 oral fluid antibody test. Additionally, we are applying our operational expertise and experience to substantially ramp up our manufacturing capacity to meet existing and anticipated demand on all three fronts. Roberto will be providing additional details on this later in the call. But first, I'd like to take a step back to review the current state of the pandemic and OraSure's place in the international response. To date, there are more than 18 million total confirmed COVID-19 cases in the world, with more than 4 million cases in the United States alone according to Johns Hopkins University. Sadly, numerous U.S. states are currently experiencing a summer surge of cases, hospitalizations, and deaths. Central to the debate about how to best reduce the spread of the virus and alleviate the misery of millions of people is testing, which a recent Rockefeller Foundation report cites as 'the only way out of the present disaster.' The foundation notes that widespread testing to detect asymptomatic individuals is crucial to containing the spread of the pandemic in workplaces, schools, and communities and specifically calls for point-of-care antigen tests to increase testing capacity, speed, and convenience. As a leading company with more than 20 years of proprietary knowledge in oral fluid testing, swab collection and rapid in-home results, and with our broad, well-established global distribution channels, we are well-positioned to become a substantial contributor to reducing the spread of COVID-19. The timing too is fortuitous as we enter the fall season when students return to school while we continue to try to reopen our economies and our communities that face the compounding problems of seasonal flu. We expect to bring important new diagnostic tools to the market. Further, while we are hopeful for a vaccine very soon, it's important to understand that vaccines may not be 100% effective. Some people may decide not to get vaccinated, and manufacturing distribution capacities may not provide worldwide coverage. For these reasons, we believe expanding testing options will be needed over the long term. The antigen test we're developing, the OraQuick Coronavirus Rapid Antigen Self-Test, would quickly detect active COVID-19 infection at the point of sample collection with no instrumentation needed to interpret results and no need to transport samples to the lab for analysis. Pending regulatory approvals and launch, individuals would be able to obtain the test, take it on their own, and read their own results a short time later. This could be invaluable to opening up economies, keeping them open, and enabling the safe return to work, school, and group events. We initially planned this test to receive an EUA for testing individuals who are either symptomatic or suspected of being infected and eventually for asymptomatic individuals. The test is built on the proven OraQuick lateral flow platform, which is a foundation for OraSure's current in-home and professional rapid diagnostics for HIV, professional HCV tests, and a 510(k)-cleared Ebola device. Versions of our HIV tests are already used by millions of people around the world each year. We are leveraging this expertise to bring the OraQuick coronavirus rapid antigen self-test to market. When we started test development, we intended to use oral fluid as a sample type, as in our HIV test. However, as research and development progressed, we found we could achieve greater sensitivity and the best possible accuracy by using samples collected with a simple, fast swab just inside the nostril. To be clear, this easily and comfortably self-collected lower nostril sample is very different from the use of the long nasal pharyngeal swabs you may have seen or even experienced yourself. Our solution would be a quick, painless swab that laypeople and medical professionals alike can easily administer anytime, anywhere. To date, there are no tests for active COVID-19 infection that provide a result shortly after sample collection and require no instrumentation. The Rockefeller Foundation report on testing specifically calls for rapid, convenient tests like the antigen test OraSure is developing to help get the 30 million tests per week many believe are needed by November to reduce the spread of COVID-19. This massive need is why we've been investing heavily in capacity expansion now in parallel with our clinical studies so we can be in a strong position upon authorization. The antigen test is currently in human clinical testing, which will provide the necessary real-use data to file for FDA emergency use authorization or EUA and enable us to bring this test widely to the market, targeting a Q4 launch. As we announced in April, we have received just over $700,000 from BARDA to help bring this test to EUA. We are also developing an enzyme-linked immunosorbent assay, ELISA, for the detection of human anti-SARS-CoV-2 antibodies in oral fluid specimens. This test is based on our existing ELISA microplate platform, which uses oral fluid samples to test for drugs of abuse, with the platform formulated to detect COVID-19 antibodies. To date, there are no oral fluid antibody tests commercially available with automated assays. With this test, human antibodies found in oral fluid would be collected easily and conveniently via a wand in a pad and eluted into our existing oral fluid specimen collection device buffer for storage and transport and later dispensed into the ELISA microplate for laboratory testing. Like our antigen test, our antibody test development is backed by BARDA, from whom we received over $600,000 in funding in June. We now expect to file for EUA for the ELISA test and subsequent launch in the fourth quarter, a slight delay from our initial timeline due to challenges in obtaining a sufficient number of positive clinical samples against which to run tests. We have since expanded the number of sites we use for clinical testing and are confident that this issue has been resolved. We recently completed the final product design and believe we will have an assay with expected high sensitivity that is currently in clinical testing. We are working to increase capacity ahead of FDA authorization and launch. I'll turn last to our molecular collections capabilities in COVID-19, which are already generating revenue. Our goal for this segment of our business is to broaden the reach of COVID-19 molecular testing by enabling non-invasive, reliable sample collection that can be done in a variety of supervised and unsupervised settings. We do this by collaborating with our customers, including reference labs, large diagnostic platform companies, academic institutions, and employer groups to validate our device with their assays. Our devices are currently being used in significant population screening programs by employer groups, government agencies, and educational institutions. The device is used for polymerase chain reaction or PCR testing, which detects genetic material of the COVID-19 virus. To date, three devices from our DNA Genotek subsidiary, including the ORAcollect RNA collection kit, OMNIgene ORAL saliva collection device, and Oragene Dx device, have been included in EUAs granted to four customers: Clinical Reference Laboratory or CRL; Biocerna; P23 Labs; and Phosphorous, permitting these devices to be used for supervised and unsupervised COVID-19 sample collection. To meet the regulatory requirements for inclusion in these EUAs, we have successfully demonstrated viral inactivation by our stabilization chemistry and consumer ease of use. To further increase the reach of molecular testing, we are also generating data to support additional global regulatory clearances for our products. We expect more customer EUAs incorporating our products to follow. We generated $8.5 million in revenue from COVID-19 use in our existing molecular collection products in the second quarter and expect continued strong contribution. We are excited about these three opportunities to address COVID-19 and expect to continue to see significant revenue from both the molecular solutions and infectious disease business units. Importantly, we expect the gains from these existing new COVID-19 products will offset any impact on our core business from the clients in both genomic research and the HIV and HCV testing markets resulting from COVID-19. We are continuing to grow by investing in COVID-19 and are putting ourselves in the position to come out of the pandemic stronger with opportunities across business areas. I will now turn the call over to Roberto for details on our quarterly financials and our efforts to expand our manufacturing capacity.

Roberto Cuca, CFO

Thank you, Steve. Net product and service revenues for the three months ending June 30, 2020, dropped 24% compared to the same period in 2019, largely due to decreased sales of our genomics products caused by the timing of orders from one of our largest genomics customers and the effects of the COVID-19 pandemic. Additionally, sales of our domestic HIV, HCV, risk assessment, and microbiome products fell due to reduced research and testing linked to the pandemic, alongside a decline in cryosurgical sales. These declines were somewhat offset by revenues from COVID-19 testing and increased laboratory services. International sales of our OraQuick HIV products decreased by 28% when compared to the second quarter of 2019 due to shipment delays, which pushed deliveries from the end of the second quarter to early in the third quarter. Importantly, despite this shipment timing issue, the core international HIV Self-Test business continues to exhibit robust double-digit growth year-to-date. Total product and service revenues for our DNA Genotek business unit reached $18.1 million in the second quarter of 2020, marking a 4% increase from the second quarter of 2019, which included $8.5 million in sales of oral fluid collection devices for COVID-19 molecular testing. Total laboratory service revenue for the second quarter of 2020 was $2.2 million, up from $1.2 million in the same quarter of 2019. Revenues from laboratory services in 2020 included contributions from both of the company’s laboratory services subsidiaries now operating as Diversigen. As stated in our press release, we are not offering financial guidance for the full year at this moment due to the unpredictable effects of the COVID-19 pandemic on our operations. However, we want to provide some insights into our business expectations. For the full year, we anticipate that, excluding cryosurgical revenues from 2019, non-COVID-19 revenues in infectious disease and molecular collections will decline in 2020 compared to the previous year. Nevertheless, we expect that our COVID-19 sample collection products and testing sales will more than compensate for this year-on-year decline in our non-COVID-19 business lines, resulting in total revenues being higher in 2020 than in 2019. Most of this revenue will be driven by our molecular solutions business unit, which has already generated $8.5 million in COVID-19 related revenues in the second quarter of this year. We expect the recently completed second quarter to be the lowest revenue quarter of the year, and we project that non-COVID-19 revenues will be stable or improve across each business unit in the third and fourth quarters compared to the second quarter, with added contributions from COVID-19 product sales. Notably, during our first quarter earnings call on May 6, we noted expectations for $3.6 million in molecular collections related to COVID-19, and we ended the quarter with $8.5 million in these sales. This indicates that sales increased throughout the second quarter, and we anticipate that revenues for these products will significantly rise in the third and fourth quarters. Turning to our manufacturing capacity, as previously mentioned, we are investing to extensively increase the number of tests and collection devices we can supply in response to the pandemic. Currently, we manufacture three product lines for COVID-19 molecular sample collection at a rate of about 35 million units per year, with 7 to 8 million units expected for non-COVID-19 applications. Ongoing capital expenditures in the molecular solutions business unit aim to expand this capacity to approximately 75 million units annually by the second quarter of next year, and further to 80 million units annually by the third quarter. Regarding our in-development antigen test based on the OraQuick rapid test platform, we currently produce around 35 million OraQuick tests annually, with about half allocated for HIV, HCV, and Ebola testing. New lines are being installed at our sites that will boost this capability to around 55 million tests annually by the first quarter of next year, and to 70 million tests per year by the third quarter of 2021. For our antibody test, we currently have a capacity of only 10 million units per year, of which approximately 3 million units are designated for existing products. We plan to double this capacity by installing lines at a third-party site, though this requires a longer lead time, with completion expected by the fourth quarter of 2021. To support these expansions, we plan to hire over 150 additional full-time employees to manage the increased product volume. We are also exploring partnerships or sublicensing opportunities with third parties to further enhance our capability to meet expected demand across all areas, in addition to the capacity expansions mentioned. In summary, we ended the second quarter with a strong financial position, no debt, and $265.8 million in cash, which includes $95 million in net proceeds from an equity offering in June, positioning us well to support future growth.

Steve Tang, CEO

Thank you, Roberto. As Roberto mentioned, we're seeing both headwinds and tailwinds in our core businesses due to the COVID-19 endemic but continue to execute across our diagnostics, sample collection and service business lines. Taking a deeper dive into our HIV business. The pandemic has had a negative impact on HIV testing nationwide as in-person testing programs have been forced to pause or shut down in an effort to comply with social distancing requirements. Overall, professional HIV testing in the U.S. declined 50% to 70% since the pandemic began, according to the Centers for Disease Control and Prevention. However, our over-the-counter HIV in-home test has been able to offset declines in professional testing to some extent as public health agencies are providing our in-home self-test to their clients. Consequently, our sales decline of 28% was far less than the 50% to 70% estimate by the CDC. During the past few months, several government agencies have recommended that organizations establish HIV self-testing programs to immediately address the challenges posed by COVID-19 and in-person HIV testing. These agencies, which include the CDC and the Department of Health and Human Services, have also guided federally supported organizations to use grant money for HIV self-test kits. OraSure is working in collaboration with government agencies and public health organizations to ensure that those who need HIV tests are able to get them. The federal government's initiative, Ending the HIV Epidemic: A Plan for America, has set a bold goal of ending the HIV epidemic in the United States by 2030. We've been encouraged to see proposals to significantly increase federal funding for this initiative in fiscal year 2021. Accessing the difficult-to-reach populations will be key to achieving this goal, and rapid testing that can be brought into communities is seen as an important tool. With the only FDA-approved in-home self-test in the market, OraSure is well positioned to play a key role in the Plan for America and capitalize on the market opportunity it represents. Launching innovative efforts like Rapid HIV self-testing programs will be critical in our continuing fight to end the HIV epidemic, particularly in the face of COVID-19. Augmenting our efforts in the HIV market is our recent acquisition of UrSure, Inc., the company developing and commercializing products that measure adherence to medications that prevent and treat HIV. This cash transaction closed in July and supports our strategy of expanding our core offerings to include additional diagnostic products, particularly point-of-care tests that complement our current infectious disease portfolio and pipeline. We will be able to offer a full HIV portfolio that covers the spectrum from screening to treatment adherence, two pillars of the Plan for America initiative. Beyond HIV, we have the first and only FDA-approved CLIA-waived rapid HCV test. Our revenue in this area was affected significantly in the second quarter as a result of COVID-19, but we anticipate an eventual return to more normal levels of revenue after the pandemic begins to resolve and test sites are reopened. Similarly, we see long-term opportunities in our substance abuse testing business in future periods as federal guidelines now prevent oral fluid drug testing. Moving on to our sample collection products and laboratory services businesses outside of COVID-19. We are seeing a continual increase in demand for saliva collection devices among customers who historically use a mix of blood and saliva samples, as in-clinic sample collection of blood remains difficult. We continue to launch new collection devices, expanding our range of sample types and analytes to meet the needs of research and academic institutions. For example, our OMNImet GUT collection kit for metabolomics, launched in June, is the first and only commercially available research-use-only device for in-home self-collection of fecal samples for metabolomics. Despite year-over-year growth, our service business remains challenged by the shutdown of university labs and other sample access delays due to COVID-19. However, there are some encouraging developments that will set the stage for future opportunities. We continue to build on relationships and execute clinical studies with pharmaceutical and biotechnology companies. Additionally, we have several small ongoing pilot studies in the direct-to-consumer wellness area and believe this will be a growth opportunity. From an industry perspective, several microbiome therapeutic companies, including Rebiotix and Vedanta, have reported positive results from the clinical trials and Seres Therapeutics is expected to report in late Q3 2020. These are all considered bellwethers for the industry, as positive results will continue to drive investment in microbiome research. Given our industry-leading capabilities, we are well positioned here. I'd also like to give a brief update on our Novosanis subsidiary. We continue to see advancements in the validation of first-void urine as a valuable tool in the detection of various cancers and recently achieved CE-IVD marking for our new small volume Colli-Pee devices compatible with several large automated diagnostic platforms. Complementing our internal growth is a strong business development strategy. We are aiming for significant increases in revenue through organic and acquisitions. We are using our robust balance sheet to create revenue and shareholder value. COVID-19 has certainly complicated the business development picture, but it's also opened up new opportunities in technology and infectious disease for us to explore and pursue. So let me assure you that we are not sitting on the sidelines. We continue to engage in the pursuit of business development opportunities that are accretive to our innovation growth strategy, and we remain committed to doing the right deal for the right price at the right time for our company and our shareholders. In closing, we are honored to be part of the fight against COVID-19 and apply our expertise to filling unmet needs in the testing paradigm while continuing to execute across our core business. Given our ongoing initiatives to scale up our production capacity, we are confident that we will be able to deliver substantially increased volumes of COVID-19 collection and testing products while ensuring they meet the highest quality standards as we contribute to the fight against this global crisis. We wish everyone and their families good health and look forward to providing future updates. And with that, I will open the call up for your questions.

Frank Takkinen, Analyst

Congrats on all the solid progress this quarter so far. A couple of questions from me today. Starting with the antigen test. Just curious if you could take a little deeper dive on why you decided to switch that to nostril collection from the original oral swab collection. And then as a follow-up to that, assuming development stays on track from here on out, can you give us a little background on different milestones you're looking for between now and the fourth quarter launch, whether that's EUA submission, if that will be announced? And then how long you expect EUA to take given the high influx of EUA submissions?

Steve Tang, CEO

Sure. Let me begin by addressing your question, Frank, and feel free to ask for clarification if I miss anything. Initially, we intended to use an oral fluid test, but we followed the science. It showed that nasal swabs, which are still convenient, painless, and can be self-administered, provided a higher viral load and better accuracy for our tests. We are currently testing this in clinical trials. Our next internal milestone is a prototype block, which should be ready in a few weeks. We have accounted for the timeline for FDA approval to EUA, which is why we are aiming for a launch in the fourth quarter. As long as the FDA timeline remains on track, we are very optimistic about our product. Drawing from our experience with our HIV product and the BARDA-funded Ebola rapid antigen test, we believe we can apply that expertise to this antigen test. We are confident, which is why we've announced increased capacity for our various products, including the antigen product, to ensure we have supply ready for the fourth-quarter launch. If I didn’t cover everything or you have more questions, please let me know, Frank.

Frank Takkinen, Analyst

No, that's great. I just had one more question on the antigen test. I guess a two-parter on the antigen test. Could you talk about some of the different end markets you are in communications with? And if there's been any contract sizing been discussed, whether it's back to work or back to school? I saw with some of your different EUAs you got on the collection side, but some of the end markets. And then could you also touch on how you were thinking about pricing?

Steve Tang, CEO

Certainly. We have not disclosed pricing yet, but we believe it will align with our current product portfolio and be competitive in the market. Discussions about use cases and applications have informed our increases in production capacity for all products, including the antigen test and sample collection methods like saliva, oral fluids, and nasal swabs, along with the antibody test. That's why we're making a strong push to enhance our capacity and share updates with you today. Regarding use cases, the rapid antigen test will be a first-of-its-kind product that addresses two key aspects: convenience and accuracy, allowing for self-collection and immediate results. This combination supports applications for returning to work and school. We have received interest from large employers, K-12 schools, universities, and government agencies, indicating a broad distribution of potential large buyers, which is why we've increased our capacity. This product aims to solve the current testing challenge of timing between sampling and receiving test results. We will be refining our approach and addressing inbound demand in the coming months.

Frank Takkinen, Analyst

Great. And if I could just move to the collection side of the business. Could you talk a little bit about the size of the different testing or the testing capacity of the different companies that you have gotten EUAs with: Biocerna, P23, Phosphorous, and CRL? Just kind of curious on which one of those are driving a lot of that COVID-related collection revenue. And if it's CRL, how do you expect that to impact the revenues going forward?

Steve Tang, CEO

Sure. So CRL is by far the biggest among our customers that have announced an EUA. They're one of the biggest private reference labs in the country. And so I think that bodes well for how we are looking at revenue for the rest of the year for our molecular sample collection kits. So I can't really speak in detail about how the size of the EUAs, the size of the labs that have received EUAs, plays in. But I can share with you that there are several more EUAs in process as well as strong working relationships with labs that are using our sample collection device that may or may not need an EUA. So that's a bottoms-up revenue build that has caused us to look for additional capacity overall and project those revenues favorably for the rest of the year.

Frank Takkinen, Analyst

Perfect. And then if I could just squeeze one more in here, and I appreciate all the time.

Steve Tang, CEO

Frank, actually, if you could reenter the queue so we can get some other questions from other analysts, that would be great. Thanks.

Jacob Johnson, Analyst

Maybe just a quick follow-up on that last answer. From a housekeeping perspective, did you recognize any revenues from CRL in Q2? Or is that kind of a Q3 opportunity?

Steve Tang, CEO

I don't think so, go ahead Roberto, please.

Roberto Cuca, CFO

So thanks for the question, Jacob. So typically, we don't identify which customers have been contributing to our revenues. As Steve mentioned, one of the important points there is that we are actually selling a lot of product to customers that haven't announced EUAs, but we do have a broad footprint of customers, which gives us a lot of optimism for the second half of the year.

Jacob Johnson, Analyst

Okay. That's helpful. And then last week, I think the FDA released some guidance for nonlaboratory COVID testing that's requiring 90% sensitivity and 99% specificity. How does that impact your rapid test? Or does it not really impact what you're trying to do?

Steve Tang, CEO

So Jacob, are you referring to the template for over-the-counter products?

Jacob Johnson, Analyst

I believe so, yes. There was something the FDA released last week on

Steve Tang, CEO

Yes, we've clearly understood that since it's crucial to our overall product strategy for the rapid antigen test. We aren’t surprised by anything in those guidelines, and we have addressed all these issues previously with other products, especially our HIV in-home test. I believe we are well-positioned to meet these requirements.

Andrew Cooper, Analyst

As we consider the upcoming back to school and back to work period, can you provide insight into the timing of a Q4 launch? Specifically, when do you anticipate this will happen? Additionally, how do you plan to address the end market, given that the launch may occur after many schools have already returned students to campus?

Steve Tang, CEO

Yes. It's an interesting question because usually, we would see students back in school right after Labor Day, right, or if not earlier, in some parts of the country. The key here is not only back to school, but staying back in school. And that the presumption there is that there won't be any infections that effectively shut down the schools that would cause them to move to another plan to reopen using better ways of ascertaining who is infected and who is not, in some parts of the country, notably in Philadelphia, the school district will go virtual until November and then make a decision whether to come back. So I don't believe we're missing significant opportunity because I don't think there are any better solutions out there to mass test students, K-12 students as well as higher ed students, to bring them back safely to campus and keep them safe on campus. And so our launch in the fourth quarter, and the first fourth quarter begins in October, when we're trying to make it get full exposure to the quarter as much as possible, I think, gives us a sweet spot in the marketplace. So this will be a first-of-the-kind product and instrument-free rapid test. And so I think there's plenty of room in the marketplace to have some very exciting opportunities of size for us.

Andrew Cooper, Analyst

Okay. Great. That's really helpful. And I guess, maybe one on the collection side, asking a little bit different way. Last quarter, you talked about the $3.6 million line of sight turning into $8.5 million or so. Can you give us the number for sort of what you feel like you have good line of sight to in this quarter? Even if it's just with the EUAs or kind of all customers combined, is there any sort of number you could give us to give us a little bit better sense of how things are tracking from that perspective?

Steve Tang, CEO

So we haven't provided specific business unit line guidance. What I'll tell you is we expect it to be substantially greater than the $8.5 million that we achieved in the second quarter, but a lot of what the actual number becomes will depend on the timing of our manufacturing and of orders coming in. So for the same reasons that we're not providing full year guidance, there's some unpredictability around this. So we can't give you a specific number.

Andrew Cooper, Analyst

Sure. And maybe just one more. But as we think about the template that was referenced and sort of the decisions of where this product is being sold, is there anything you can share in terms of how you think about the launch and pushing this into the market, especially as capacity ramps? Is it more of a clinical setting to start or more of a professional setting, I should say, and we should think about ASPs at sort of that level before you really ramp and then have the capacity to sell more to the broad consumer? Or is there a different way to be thinking about this?

Steve Tang, CEO

So let me take it from the perspective of how we'll sequence the EUAs, okay? So we're going to follow the FDA requirement for the initial EUA, which is to typically start with authorization for prescription use then followed by over-the-counter authorization. So given the latest discussions with FDA and the latest home use template, we're going to have a phased approach. So our initial launch will be into the professional market for testing symptomatic individuals or individuals that have come in contact with people infected with COVID-19 or suspected of COVID-19 infection. The second phase will be a prescription use self-test with the same intended use population as the professional product that I just mentioned. Then the third phase will be an over-the-counter product we'll be looking to obtain a claim for asymptomatic individuals. So the goal for the EUA is for the first two phases, so that's the professional use and then the prescription use self-test, to happen in the fourth quarter, and the OTC claim to happen soon thereafter. So once we're authorized to sell the rapid test at healthcare professionals, public health institutions will follow as well as employers, schools, and then consumers. And so you can see that phased approach opens up the market for a lot of different segments, market segments, and we'll address the pricing and volume issues from there.

Andrew Cooper, Analyst

Great. Just one more question on that. When we consider the process of obtaining over-the-counter EUA, do you believe the FDA will primarily look for evidence that an average person can use this without making mistakes, achieve a correct result, and know how to interpret that result? What steps are necessary to demonstrate this to ensure the FDA is comfortable with the application? If you could provide some insight on that, it would be appreciated.

Steve Tang, CEO

Sure. It's very similar, Andrew, to the process we went through in 2012 to get our then HIV product from professional use to over-the-counter use. So I think we're one of the few companies that have actually done that for diagnostic products for infectious disease. So I think that we understand those challenges, and we understand basically what the FDA is looking for. So I think that's why we're very confident.

Brandon Couillard, Analyst

Maybe one for you, Roberto. You pointed to expectations for positive revenue growth in the back half of the year. Can you just sort of speak to the level of visibility there? Was that a true statement for both the third and the fourth quarter? And could you quantify the magnitude of the HIV Self-Test order felt that moved into the third quarter?

Roberto Cuca, CFO

Sure. We anticipate that the second quarter will be the lowest revenue quarter of the year, and we expect the third and fourth quarters to maintain stable or increasing revenue for both business units. Additionally, we have our collections business, which generated $8.5 million in revenue during the second quarter, alongside our antigen and antibody test businesses that we plan to launch in the fourth quarter, contributing to our expected annual growth. Regarding the HIV shipments, our international orders have a longer lead time compared to domestic ones. In the first quarter, our HIV international business experienced minimal disruption. The order size shifting from the second to the third quarter would have brought us very close to flat compared to 2019 in the second quarter. There was some growth disruption in the second quarter due to COVID-19, but we expect improvements in the third and fourth quarters.

Brandon Couillard, Analyst

Okay. Then my second question is really just broadly around the utility of oral fluid for COVID-19 testing. Two of your existing DNAG customers, who probably know more about oral fluid than anyone, Helix and Color Genomics, have both rolled out their own COVID testing services that don't use oral fluid collection devices. Can you just sort of speak to the level of visibility or sustainability of those customers that are using those DNAG collection devices and the utility of that as a best-case collection sample?

Steve Tang, CEO

Yes. So in the case of the customers that you mentioned for molecular sample kits, just keep in mind that the challenge of stabilizing DNA for genomic analysis is quite a different challenge in stabilizing RNA for infectious disease analysis. So I don't think there's any read-through on the fact that we have been successful with our customers with saliva for molecular analysis. And so there's no real way to translate that. Having said that, we believe that oral fluid is an effective and appropriate sample type for many types of COVID-related diagnostics and screening tests. And we've noted that we've locked in a prototype for the antibody test that shows strong performance for oral fluids there. And we've also repeatedly seen that, technically, saliva collected with devices from DNA Genotek is an excellent sample type for collection, transport, and detection for the SARS-CoV-2 analysis, and that's supported by those multiple EUAs from independent laboratories. The vast majority of publication supports saliva as a good sample type alternative to nasopharyngeal swabs and supports the use of saliva for self-collection, which has the opportunity to significantly increase testing opportunities. So obviously, we are very bullish in this area, which is why we're investing CapEx to increase manufacturing to the numbers that Roberto shared earlier.

Operator, Operator

Your next question comes from an indiscernible source.

Steve Tang, CEO

We'd like to thank you for your participation on today's call and for your continued interest in OraSure. Have a great afternoon and evening, and please stay safe and be well.

Operator, Operator

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect.