Contents
Ortho
Introduction:
Ortho Clinical Diagnostics is an in vitro diagnostic company that manufactures blood
testing products and diagnostic equipment. Ortho in the medical field he serves two major
industries. Immunohaematology provides a means of ensuring that transfusion recipients
receive suitable and compatible blood. Johnson and Johnson acquired the Clinical Diagnostics
Division of Eastman Kodak in 1994 (forming Johnson & Johnson Clinical Diagnostics)
and merged with Ortho Diagnostic Systems in 1997. Ortho’s global headquarters are located in
Raritan, New Jersey, and its global R&D center are located in Rochester, New York. In
2014, the Carlyle Group acquired the company from Johnson & Johnson for $4.15 billion.
Ortho Clinical Diagnostics operated as an independent company until it was acquired by Quidel
Corporation on May 27, 2022, for $ 6 billion.
Company Overview:
Ortho Clinical Diagnostics was founded in 1939 and is headquartered in Raritan,
New Jersey. With an established track record of providing quality
products and services to hospital networks, clinical laboratories, and
blood banks worldwide, Ortho’s innovative technology ensures reliable and accurate
tests. increase. Over his 80 years, Ortho has remained a pioneering leader in the IVD field. By
bringing to market many of the world’s first diagnostic tests, Ortho
has helped millions of physicians identify and understand emerging diseases and disorders. The
company, which affects more than 800,000 patients every day, introduced the first blood bank
product to determine Rh+ or Rh blood types, saving millions of lives. Ortho also
introduced its patented dry slide technology and received emergency use authorization from
the U.S. Food and Drug Administration, launching the first high-volume antibody and
antigen test for COVID-19.
Rochester-based Activities and Accomplishment:
Ortho operates three facilities in Rochester, a Global Center of Excellence for Research
& Development, and two manufacturing facilities. Ortho manufactures micro slides and
fluidic technologies in Rochester, maintains various support functions at his
locations on them, and provides employment for approximately 1,200 Rochester-based
teammates. The increased location has significantly increased employment and economic
opportunities in Rochester and the surrounding area. Ortho recently announced his $53.7
million contract from the Biomedical Advanced Research and Development Authority for
COVID-19 testing, expanding its manufacturing and diagnostic testing solutions
to provide greater manufacturing capacity. I support you. This not only serves as a pivotal
moment in the global fight against COVID-19 but also supports Rochester’s economy
and community.
According to a Community standpoint:
From a community standpoint, Ortho serves as an active contributor and support system to
Rochester. The company actively participates in community events such as blood drives,
American Heart Association Heart Walk, and United Way Day of Caring. Ortho played a pivotal
role in being one of the first to develop COVID-19 antibody tests right here in Rochester, for use
around the world. It also focused on its employees, including those at the Rochester facilities,
providing employment opportunities in the community. Ortho is proud to have no layoffs or
furloughs associated with the COVID19 pandemic. Ortho’s consistent history of annual salary
increases, and bonus eligibility has allowed both the company and its employees to consistently
contribute to the prosperity and growth of the Greater Rochester area. Worldwide, more than
800,000 patients are impacted by Ortho’s tests each day – the kind of tests that are created in
Rochester where the Ortho team continues to further this important work Because Every Test is
a Life.
History:
1939: Ortho Products, Inc., is formed in Linden, New Jersey, as a division of Johnson & Johnson.
1944: Philip Levine, in the field of hematology, joins Ortho Products to continue his research
into the mechanics of the Rh system in human blood.
1997: Ortho Diagnostics Systems and Johnson & Johnson Clinical Diagnostics merge and begin
operating as Ortho Clinical Diagnostics.
2001: Ortho becomes the first diagnostic company to receive US FDA approval for automated
random access hepatitis tests.
2006: Ortho launches the first FDA-licensed test to screen blood donations for exposure to
Chagas disease.
2014: The Carlyle Group acquires Ortho Clinical Diagnostics for $4.15 billion.
2015: Ortho receives FDA clearance for its ORTHO VISION Analyzer, which automates the full
range of immunohematology testing and helps improve the safety of blood transfusions by
reducing laboratories’ reliance on manual methods.
2017: FDA approves Ortho’s HIV Combo test for the Vitros immunodiagnostic system. The test
detects both HIV-1 and HIV-2 antibodies and the p24 antigen, and enables detection of HIV-1
acute infection earlier than previous as says.
Business Operation:
Ortho produces in-vitro diagnostics equipment and associated assays and reagents, serving the
clinical laboratories and immunohematology sectors of the medical field. Ortho sells its
products in more than 125 countries and is targeting emerging markets for future growth.
Ortho Clinical Diagnostics Faces Uncertain Merger and Inflation
Environment:
• Ortho Clinical Diagnostics went public in January 2021, raising $1.3 billion in gross
proceeds in an IPO.
• The firm provides diagnostics services primarily to hospital labs in the U.S.
• With the acquisition deal potentially on approval hold and Quidel’s sharp stock price
drop, the near-term future for OCDX is highly uncertain.
• Looking for more investing ideas like this one? Get them exclusively at IPO Edge.
A Quick take on Ortho Clinical Diagnostics Holdings:
Ortho Clinical Diagnostics (OCD) went public in January 2021, raising approximately $1.3
billion in gross proceeds from an IPO that was priced at $17.00 per share. The firm provides
diagnostics services primarily to hospital labs in the U.S. With the acquisition deal potentially on
approval hold and Quidel’s sharp stock price drop, the near-term future for OCDX is highly
uncertain. Given these uncertainties, my outlook on OCDX at around $17.20 is a Hold.
Company:
Raritan, New Jersey-based Ortho Clinical was founded to develop a suite of services for clinical
laboratories in hospitals in the U.S. Management is headed by Chairman and CEO, Chris Smith,
who has been with the firm since 2019 and was previously CEO of Cochlear Limited and
previously held senior roles in a number of healthcare firms.
The company’s primary offerings include:
• Clinical Laboratories – Chemistry via in-vitro diagnostics
• Transfusion Medicine – Donor Screening services before blood transfusions
The company pursues customers among clinical laboratories and said it sells to more than 70%
of U.S. hospitals.
OCDX’s Market and Competition:
According to a 2020 market research report by Allied Market Research, the global market for in
vitro diagnostics was valued at an estimated $67.1 billion in 2019 and is expected to exceed $91
billion by 2027. This represents a forecast CAGR of 4.8% from 2020 to 2027. The main drivers
for this expected growth are a rise in chronic and infectious diseases combined with a growing
elderly population worldwide that is more susceptible to immunological disorders from
weakening immune systems. Also, an increased focus on personalized medicines as well as
continued innovation by market participants will increase demand over the longer term.
Major competitive or other industry participants in various business areas of the firm include:
• Roche (OTCQX: RHHBY)
• Abbott (ABT)
• Siemens Healthineers (OTCPK: SEMHF)
• Beckman Coulter (Danaher)
• Thermo Fisher Scientific (TMO)
• DiaSorin (OTCPK: DSRLF)
• Mindray
• bioMerieux (OTCPK:BMXMF)
• Bio-Rad (BIO)
• Grifols (GRFS)
• Immucor
• Fujirebio
Commentary on Ortho Clinical:
In its last earnings call, covering Q4 2021’s results, management highlighted its lack of heavy
reliance on COVID testing and therefore comparatively low ‘headwinds’ as a result of reduced
COVID assays in its broad portfolio of tests. The firm saw growth in its Clinical Labs and
Transfusion Medicine segments. By region, OCDX produced growth in all of its major regions,
with The Americas growing at 18% and Greater China growing at 12% year-over-year. However,
the firm has seen supply chain disruptions resulting in shortages of certain components and
inflation in freight and logistics aspects, which has ‘pushed out delivery of our instruments to
some customers.’ This reduced its Q4 installed base growth from a projected 5% to 3%.
Financial Results:
As to its financial results, Q4 recurring revenue grew by 6% as a result of strength in its clinical
chemistry, immunoassay, and donor screening segments. Total revenue for 2021 increased by
14% in constant currency versus 2020. Notably, the gross margin for the year was 50.7%, a 210
basis point increase, mostly due to currency translation, volume and lower manufacturing
costs.’ In December 2021, Ortho and Quidel announced the planned acquisition of Ortho at a
then price of $24.68 per share in a combination of cash and stock, which was a 25% premium
over Ortho’s closing price on the day prior to the announcement.
Ortho’s Economy according to Stock Exchange:
Since then, Ortho’s stock initially rose to $21.39 but has since dropped to around $17.20, a
reduction in the price of nearly 20%, erasing the premium to be paid by acquirer Quidel. Quidel’s
stock slide since the announcement has been even more dramatic, dropping nearly 43% in part
due to the dilution portion of the purchase price. Also, it appears the acquisition deal requires
Russian government approval, which if true, would likely slow the deal down significantly. OCDX
will also probably face even greater inflation pressures due to soaring gasoline prices as a result
of the Ukraine war and its effects. Already, Brent crude oil is above $130 per barrel and rising
fast. While OCDX has produced high and growing gross margins, operating in a European and
The Russian environment may present greater challenges to its future margin results. With the
acquisition deal potentially on approval hold and Quidel’s sharp stock price drop, the near-term
future for OCDX is highly uncertain. Given these uncertainties, my outlook on OCDX at around
$17.20 is a Hold.
Acquisition of Ortho:
Washington, DC – Global alternative asset manager The Carlyle Group completed the previously
announced acquisition of Ortho-Clinical Diagnostics, Inc. (OCD) for approximately $4 billion.
OCD, formerly a subsidiary of Johnson & Johnson, is a global provider of solutions for screening,
diagnosing, monitoring, and confirming diseases. Stephen H. Wise, Carlyle Managing Director,
said, “As a free-standing company with new leadership and accelerated investment in R&D,
OCD is well positioned to tap into the rising demand for sophisticated medical diagnostic products
and services worldwide. We have assembled a remarkable senior management team, led by Dr.
Martin D. Madaus, and we look forward to partnering with him in the years to come.” “We are
excited to lead OCD into a new era with a renewed focus on differentiated innovation that
targets customer needs,” said OCD Chairman and Chief Executive Officer Dr. Madaus. “Through
targeted reinvestment, and the addition of an executive leadership team with significant
diagnostics industry and management experience, we see tremendous opportunity to
transform OCD into a leading global player.”
OCD beginning:
Dr. Madaus, who assumes his leadership roles at OCD beginning today, has more than 25 years
of experience in the diagnostics and life science industries, and a consistent track record of
growing businesses. Dr. Madaus was most recently Executive Chairman of the Quanterix Board
of Directors and previously served as President, Chairman, and Chief Executive Officer of
Millipore Corp. Before joining Millipore, Dr. Madaus was President, Chief Executive Officer and
Head of North American Operations for Roche Diagnostics Corp. Dr. Madaus is a director of
Mettler Toledo and previously a director of Carlyle portfolio company PPD and Covidien. He has
a doctor of veterinary medicine degree from the University of Munich, Germany and a
doctorate in veterinary medicine from the Veterinary School of Hanover, Germany.
Johnson & Johnson Completes Divestiture Of Ortho-Clinical
Diagnostics To The Carlyle Group:
Johnson & Johnson (NYSE: JNJ) announced that it has completed the divestiture of its OrthoClinical Diagnostics business to The Carlyle Group for approximately $4 billion, subject to
customary adjustments. Under the terms of the transaction, The Carlyle Group has acquired the
Ortho-Clinical Diagnostics business, a global provider of solutions for screening, diagnosing,
monitoring, and confirming diseases. The Ortho-Clinical Diagnostics business generated net
sales of approximately $1.9 billion in 2013. Johnson & Johnson will discuss the financial impact
of this divestiture during its scheduled quarterly earnings call on July 15, 2014.
About Ortho Clinical Diagnostic, Inc:
Ortho-Clinical Diagnostics, Inc. delivers high-quality in vitro diagnostic products that give
healthcare professionals around the world the knowledge they need to make better treatment
decisions sooner. The company serves the global transfusion medicine community with donor
screening and blood typing products to help ensure every patient receives blood that is safe,
the right type, and in the right unit. Ortho-Clinical Diagnostics also brings sophisticated
information management, testing technologies, and automation and interpretation tools to
clinical laboratories worldwide to help them run more efficiently and improve patient care.
About J & J:
Caring for the world, one person at a time… inspires and unites the people of Johnson &
Johnson. We embrace research and science – bringing innovative ideas, products, and services to
advance the health and well-being of people. Our approximately 125,000 employees at more
than 270 Johnson & Johnson operating companies work with partners in healthcare to touch
the lives of over a billion people every day, throughout the world.
Ortho Clinical Diagnostics to get a new owner:
There’s an ownership change coming for one of the Rochester area’s larger employers. The deal
involves Ortho Clinical Diagnostics, which operates three facilities in the Rochester area,
including two manufacturing facilities and an administrative building at the Canal Ponds
business park in Greece. Altogether, those operations employ about 1,200 people. Late last
week, the Quidel Corporation, a California-based healthcare diagnostics manufacturer reached
an agreement to buy Ortho Clinical Diagnostics for combined cash and stock deal valued at about
$6 billion. Quidel makes at-home rapid tests, including those used for COVID-19. Ortho Clinical,
which is headquartered in New Jersey, also makes products used for diagnosing diseases,
known as in-vitro diagnostics that are used by places like hospitals and clinical labs. Ortho
Clinical has longtime roots in the Rochester area, at one point, having been associated with
Eastman Kodak and Johnson and Johnson. Later, it was owned by a private investment firm,
and then it became a public company last January. A senior manager for corporate
communications, Elaine Colón, told WXXI News that “Ortho Rochester is and will remain an
important part of our manufacturing operation moving forward.” Ortho Clinical Chairman and
CEO Chris Smith said that “By bringing together Quidel’s point-of-care diagnostics with Ortho’s
vast global reach, there is a substantial opportunity to capitalize on the cross-selling
opportunities, move into attractive adjacent markets, and accelerate innovative product
expansion and the development of molecular technologies.” Douglas Bryant, President and CEO
of Quidel said that “The combination with Ortho will help solidify Quidel as a leader in the
diagnostics industry, bringing together innovative, complementary products, solutions, and
services that enhance the health and well-being of patients across the globe.” Bryant will serve
as Chairman and CEO of the combined company. The deal is expected to close during the first
half of the fiscal year 2022.
Some General Information about Ortho Clinical Diagnostic:
We are a pure-play in vitro diagnostics (“IVD”) business driven by our credo, “Because Every
The test is A Life.” Our solutions are central to the operations of hospitals, clinics, blood banks and
donor centers around the world, where they are used to help diagnose certain conditions, such
as cancer or heart attacks, and infectious diseases, such as hepatitis, HIV, and most recently,
COVID-19, where we have launched two antibody tests and an antigen test, and we are actively
expanding our menu of tests to address the global pandemic. The U.S. Food and Drug
Administration granted the company Emergency Use Authorization approvals in April 2020 for
its COVID-19 antibody and antigen tests. We have been pioneering life-impacting advances in
diagnostics for over 80 years, from our earliest work in blood typing to our innovation in
infectious diseases and our latest developments in laboratory solutions. In 2014, we were
acquired by The Carlyle Group from Johnson & Johnson and became an independent
the organization is solely focused on delivering high-quality IVD products and services to our
diagnostic customer base. At the time of the separation, our business had a global scale, a
reputation for high-quality products, a strong quality management system, and a research and
development team with extensive scientific expertise.
Ortho-Clinical Diagnostics, Inc. Announces Acquisition of Micro Typing
Systems, Inc:
Ortho-Clinical Diagnostics, Inc. (OCD), a Johnson & Johnson company, and Micro Typing
Systems, Inc. (MTS), a leading manufacturer of blood bank serology tests for the North
American market announced that MTS has been acquired by OCD. MTS is now a wholly owned
subsidiary of Ortho-Clinical Diagnostics, Inc. Located in Pompano Beach, Florida, MTS
manufactures a line of reagents and supplies distributed instruments known as the ID-Micro
Typing System(TM) (ID-MTS). ID-MTS is used in hospitals and donor centers to help to ensure
safe and effective blood transfusions.
OCD as a global leader:
OCD, the worldwide leader in the development and marketing of instrumentation and reagent
systems for transfusion medicine, has sold the Ortho BioVue System internationally and has
been the exclusive distributor of MTS Gel Technology in North America for over six years. These
two technologies enable customers to realize full automation and offer a cost-effective, easy-to-use system that provides significant benefits over testing methods traditionally used in blood
bank laboratories. Catherine M. Burzik, President, Ortho-Clinical Diagnostics, Inc., said, “OCD
has a 60-year heritage in immunohematology and transfusion medicine. We are committed to
playing a central role in helping to ensure the safety and availability of the nation’s blood
supply. Acquiring MTS positions OCD to expand new product offerings more rapidly in the
important North American market, where hospitals and donor centers need to transition to
more efficient and cost-effective automation platforms.”
Blood Banking Serology Products:
OCD is one of two remaining manufacturers providing blood banking serology products and
services to North American blood banks. The company recently spearheaded a program in the
The United States to raise awareness of the severely fragile state of the nation’s blood supply. The
effort led to the passage of the Benefits Improvement and Protection Act in December 2000.
This act restored $11.5 billion in Medicare funding and includes additional blood
reimbursement provisions. Bursik said that the company would continue efforts to bring long
overdue recognition to the state of the nation’s blood supply with policymakers and industry
councils.
“This acquisition underscores the company’s commitment to helping revitalize the stability of the
the blood supply in North America,” Burzik added. “By continuing to convert hospitals and donor
centers to ID-MTS technology and investing in additional automation upgrades and product
offerings, OCD will play an important role in helping the marketplace reduce operational and
labor costs while also improving transfusion medicine.