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Orasure Technologies (OSUR)
NASDAQ:OSUR
Risk Overview Q2, 2025
Risk Distribution
25% Legal & Regulatory
22% Finance & Corporate
15% Tech & Innovation
15% Macro & Political
13% Ability to Sell
9% Production
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Orasure Technologies Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2025
Main Risk Category
Legal & Regulatory
With 17 Risks
Legal & Regulatory
With 17 Risks
Number of Disclosed Risks
67
-1
From last reportS&P 500 Average: 31
67
-1
From last reportS&P 500 Average: 31
Recent Changes
1Risks added
0Risks removed
0Risks changed
Since Jun 2025
1Risks added
0Risks removed
0Risks changed
Since Jun 2025
Number of Risk Changed
0
-1
From last reportS&P 500 Average: 3
0
-1
From last reportS&P 500 Average: 3
See the risk highlights of Orasure Technologies in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 67
Legal & Regulatory
Total Risks: 17/67 (25%)Above Sector Average
Regulation10 | 14.9%
Regulation - Risk 1
Marketing of the Company's COVID-19 Tests and Collection Kits Under EUAs from the FDA Is Subject To Certain Limitations and the Company Is Required To Maintain Compliance with the Terms of the EUA, Among Other Things, and the Continuance of the EUAs Is Subject To Government Discretion.Regulation - Risk 2
The Company's U.S. Government Contracts Require Compliance With Numerous Laws and Increases Its Risk and Liability.From time to time, the Company receives funding from the U.S. government and sells some of its products to the federal government. Historically, the Company has sold a number of its products to the government under contracts with the General Services Administration and the Veterans Administration.
In September 2022, the Company entered into an $8.6 million contract with BARDA to develop a second generation Ebola test on the OraQuick testing platform, which was subsequently modified in September 2023 to add an additional $6.8 in funding to be used to obtain the appropriate regulatory approvals. Also in September, 2022, the Company was selected to provide its OraQuick In-Home HIV tests in support of the CDC "Together Take me Home," HIV self-test program. Under the program, the CDC is expected to provide $41.5 million over a five-year period to support community testing. During the third quarter of 2022, the Company entered into a contract with the Defense Logistics Agency ("DLA") for the second procurement of the Company's InteliSwab COVID-19 Rapid Test for OTC use. During the same quarter, the Company entered into a contract with the BARDA to provide it with up to $13.6 million in funding to obtain an FDA 510(k) clearance and CLIA waiver for the Company's InteliSwab test. The Company continued development work and analytical testing on this test throughout 2023. However, in early 2024, the Company has communicated to BARDA that it does not intend to pursue further development of this product. In September 2021, the Company entered into a contract with the U.S. DOD in coordination with the HHS for $109 million in funding to build additional manufacturing capacity in the United States for the Company's InteliSwab test.
As a result of the Company's U.S. government funding and product sales to the U.S. government, it must comply with laws and regulations relating to the award, administration and performance of U.S. government contracts. U.S. government contracts typically contain a number of extraordinary provisions that would not typically be found in commercial contracts and which may create a disadvantage and additional risks to the Company as compared to competitors that do not rely on government contracts. For example, the government has the right to terminate one or more of these contracts at its convenience even if the Company has not defaulted in any of its obligations.
As a U.S. government contractor, the Company is subject to increased risks of investigation, criminal prosecution and other legal actions and liabilities to which purely private sector companies are not. The results of any such actions could adversely impact the Company's business and have an adverse effect on its consolidated financial performance.
A violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of the Company's contracts, as well as suspension or debarment. The suspension or debarment in any particular case may be limited to the facility, contract or subsidiary involved in the violation or could be applied to the Company's entire enterprise in certain severe circumstances. Even a narrow scope suspension or debarment could result in negative publicity that could adversely affect the Company's ability to renew contracts and to secure new contracts, both with the U.S. government and private customers, which could materially and adversely affect the Company's business and results of operations. Fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow rules relating to billing on cost-plus contracts, receiving or paying kickbacks, or filing false claims, among other potential violations. In addition, the Company could suffer serious reputational harm and the value of its common stock could be negatively affected if allegations of impropriety related to such contracts are made against it.
Regulation - Risk 3
The Company's Inability to Respond to Changes in Regulatory Requirements Could Adversely Affect Its Business.The Company believes that its products and procedures are in material compliance with all applicable FDA regulations, ISO requirements, and other applicable regulatory requirements, but the regulations regarding the manufacture and sale of its products, the QSR and ISO requirements, and other requirements may be unclear and are subject to change. Newly promulgated regulations could require changes to the Company's products, necessitate additional clinical trials or procedures, or make it impractical or impossible for it to market its products for certain uses, in certain markets, or at all. The FDA and other regulatory authorities also have the ability to change the requirements for obtaining product approval or clearance and/or impose new or additional requirements as part of the approval or clearance process. These changes or new or additional requirements may occur after the completion of substantial clinical work and other costly development activities. The implementation of such changes or new or additional requirements may result in additional clinical trials and substantial additional costs and could delay or make it more difficult or complicated to obtain approvals and sell the Company's products.
In addition, from time to time, legislation is drafted, introduced, passed in Congress and signed into law that could significantly change the statutory provisions governing the approval, manufacturing, and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations, guidance and policies are often revised or reinterpreted by the FDA in ways that may significantly affect the manner in which our products are regulated and marketed. The Company cannot predict the effect, if any, that these changes might have on its business, financial condition or results of operations.
Regulation - Risk 4
Failure to Comply With FDA or Other Regulatory Requirements May Require the Company to Suspend Production or Sale of Its Products or Institute a Recall Which Could Result in Higher Costs and a Loss of Revenues.Regulation by the FDA and other federal, state and foreign regulatory agencies impacts many aspects of the Company's operations and the operations of its suppliers and distributors, including manufacturing, labeling, packaging, adverse event reporting, recalls, distribution, storage, advertising, promotion and recordkeeping. The Company is subject to routine inspection by the FDA and other agencies to determine compliance with QSR and FDA regulatory requirements in the United States and other applicable regulations worldwide, including but not limited to ISO standards. The Company believes that its facilities and procedures are in material compliance with the FDA requirements and ISO standards, but the regulations may be unclear and are subject to change, and the Company cannot be sure that the FDA or other regulators will agree with its compliance with these requirements. The FDA and foreign regulatory agencies may require post-marketing testing and surveillance to monitor the performance of approved or cleared products or impose conditions on any product clearances or approvals that could restrict the distribution or commercial applications of those products. Regulatory agencies may impose restrictions on the Company or its distributors' advertising and promotional activities or preclude these activities altogether if a noncompliance is believed to exist. In addition, the subsequent discovery of previously unknown problems with a product may result in restrictions on the product or additional regulatory actions, including withdrawal of the product from the market.
Failure to comply with the applicable requirements of the FDA can result in, among other things, 483 notices, warning letters, administrative or judicially imposed sanctions such as injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, refusal to grant PMA approval for devices, withdrawal of product registrations, marketing clearances or approvals, or criminal prosecution. The ability of the Company's suppliers to supply critical components or materials and of its distributors to sell its products could also be adversely affected if their operations are determined to be out of compliance. Such actions by the FDA and other regulatory bodies could adversely affect the Company's revenues, costs and results of operations.
Some of the Company's products, particularly those sold by DNAG, are sold for research purposes in the U.S. The Company does not promote these products for clinical diagnostic use and they are labeled "For Research Use Only" ("RUO"). If the FDA were to disagree with the Company's RUO designation of a product, the Company could be forced to recall and/or stop selling the product until appropriate regulatory clearance or approval has been obtained.
In the ordinary course of business, the Company must frequently make subjective judgments with respect to compliance with applicable laws and regulations. If regulators subsequently disagree with the manner in which the Company has sought to comply with these regulations, it could be subjected to substantial civil and criminal penalties, as well as product recall, seizure or injunction with respect to the sale of its products. The assessment of any civil and criminal penalties against the Company could severely impair its reputation within the industry and any limitation on its ability to manufacture and market its products could have a material adverse effect on the Company's business.
Regulation - Risk 5
The Need to Obtain Regulatory Approvals, Clearances, Authorizations or Certifications Could Increase the Company's Costs and Adversely Affect Its Financial Performance.Many of the Company's proposed and existing products and services are subject to regulation by the FDA and other governmental or public health agencies. In particular, the Company is subject to strict governmental controls on the development, manufacture, labeling, distribution and marketing of its products. The Company's practice is to train its employees on the legal requirements applicable to its business, including the requirements of the FDA and other relevant agencies.
The process of obtaining required approvals, clearances, other premarket authorizations or certifications can involve lengthy and detailed laboratory testing, human clinical trials, sampling activities and other costly, time-consuming procedures. These approvals, clearances, other premarket authorizations or certifications can require the submission of a large amount of clinical data which can be expensive and may require significant time to obtain. It is also possible that a product will not perform at a level needed to generate the clinical data required to obtain such premarket authorizations or certifications. The submission of an application to the FDA or other regulatory authority does not guarantee that an authorization to market or import the product or a laboratory certification will be received. A regulatory authority may impose requirements as a condition to granting an approval, clearance, premarket authorization or certification that may include significant restrictions or limitations. The regulatory authority may delay or refuse to grant premarket authorization or certification, even though a product has been approved or registered without restrictions or limitations in another country or by another agency. Delays in receipt or failure to receive such approvals, clearances, premarket authorization or certification could have a material adverse effect on the Company's business, financial condition and results of operations.
All in vitro diagnostic products that are to be sold in the EU must bear the CE mark indicating conformance with the requirements of the relevant EU in vitro diagnostic medical devices legislation. The EU IVDR became applicable on May 26, 2022 and repealed the previous IVDD. There is a transitional period during which products that have a declaration of conformity issued under the IVDD prior to May 26, 2022 may continue to be placed on the EU market for a certain period before requiring certification under the EU IVDR, subject to compliance with certain requirements under the EU IVDR (see the section titled "Governmental Regulation - International" for further Information). The Company has obtained the CE mark for several of its existing products under the IVDD. It also intends to apply for CE marks for certain of its future products and is not aware of any material reason why it would be unable to obtain those marks. However, there can be no assurance that compliance with all provisions of the EU IVDR will be demonstrated and the CE mark will be obtained or maintained for all products that the Company desires to sell in the EU. The failure to obtain or maintain the CE mark for one or more of the Company's products could lead to the termination of strategic alliances and agreements for sales of those products in the EU and mean that the Company is unable to sell such products in the EU.
In addition, the Company or its distributors are often required to obtain premarket authorization or product registration with foreign governments or regulatory bodies before it can import and sell its products in foreign countries. The Company may also be required to obtain WHO pre-qualification or endorsement in order to sell certain products in international markets or enable its customers to access interested funding sources for its products. The Company may have difficulty obtaining such authorizations, registrations, pre-qualifications or endorsements and, if obtained, such authorizations, registrations, pre-qualifications or endorsements may contain restrictions that limit the Company's ability to market and sell its products in the relevant country. In addition, any change in the Company's arrangement with a foreign distributor could result in the loss of or delay in transfer of any applicable product registrations, thereby interrupting the Company's ability to sell those products in the affected markets.
Regulation - Risk 6
Changes in Healthcare Regulation Could Affect the Company's Revenues, Costs and Financial Condition.In recent years, there have been numerous initiatives at the federal and state level for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services in the United States. These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under government-funded programs, to minor modifications to existing programs. One example is the Patient Protection and Affordable Care Act, the federal healthcare reform law enacted in 2010 (the "Affordable Care Act"). Similar reforms may occur internationally.
Legislative and regulatory bodies are likely to continue to pursue healthcare reform initiatives in many forms and may continue to reduce funding in an effort to lower overall federal healthcare spending. The ultimate content and timing of changes to healthcare reform legislation and the resulting impact on the Company are impossible to predict. If significant reforms continue to be made to the healthcare system in the United States, or in other jurisdictions, those reforms may increase the Company's costs or otherwise have an adverse effect on its financial condition and results of operations.
Regulation - Risk 7
The Company Is Subject to Numerous Government Regulations in Addition to FDA Requirements, Which Could Increase the Company's Costs and Affect Its Operations.In addition to the FDA and other regulations described previously, laws and regulations in some states may restrict the Company's ability to sell products in those states. While the Company intends to work with state legislators and regulators to remove or modify any applicable restrictions, there is no guarantee it will be successful in these efforts.
The Company must also comply with numerous laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, disposal of hazardous substances, labor or employment practices and the configuration and operation of the websites through which it advertises its products. As a device manufacturer, the Company is required to report annually to the Centers for Medicare & Medicaid Services ("CMS") any payments or transfers of value it has made to physicians and teaching hospitals and any physician ownership or investment interest in the Company's business. In the U.S., before the Company can market a new medical device, or a new use of, or claim for, or significant modification to, an existing product, it generally must first receive either 510(k) clearance or De Novo authorization or approval of a PMA from the FDA. Similarly, most major markets for medical devices outside the U.S. also require clearance, approval, authorization or compliance with certain standards before a product can be commercially marketed. Compliance with these laws or any new or changed laws regulating the Company's business could result in substantial costs. Because of the number and extent of the laws and regulations affecting the Company's industry, and the number of governmental agencies whose actions could affect its operations, it is impossible to reliably predict the full nature and impact of these requirements. To the extent the costs and procedures associated with complying with these laws and requirements are substantial or it is determined that the Company does not comply, its business and results of operations could be adversely affected.
Regulation - Risk 8
The Company's International Sales Create Potential Exposure Under Anti-Corruption Laws.The Company has a policy in place prohibiting its employees, distributors and agents from engaging in corrupt business practices, including activities prohibited by the FCPA and similar foreign laws. In 2024, approximately $13.9 million of the Company's consolidated net revenues were generated from sales in a variety of foreign countries. These international activities subject the Company to the FCPA, the U.K. Bribery Act and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by business entities for the purpose of obtaining or retaining business. The Company has operations, enters into agreements with third parties, and makes sales in countries known to experience corruption. Further international expansion, including the acquisition of foreign entities, may create increased exposure to such practices. The Company's activities in these countries creates the risk of unauthorized payments or offers of payments by one of the Company's employees, consultants, sales agents or distributors that could be in violation of various laws, including the FCPA, even though these parties are not always subject to the Company's control. It is the Company's policy to implement safeguards to discourage these practices by its employees and distributors, including employee training, contracts requiring compliance with the FCPA and similar rules, and standard reviews of its distributors. However, the Company's existing safeguards and any future improvements may not prove to be effective, and its employees, consultants, sales agents or distributors may engage in conduct for which the Company might be held responsible. Violations of the FCPA and other laws may result in criminal or civil sanctions, which could be severe and the Company may be subject to other liabilities, which could negatively affect its reputation, business, results of operations and financial condition.
Regulation - Risk 9
FDA Regulation of Laboratory-Developed Tests and Genetic Testing Could Affect Demand For the Company's Products.The FDA has regulatory responsibility over instruments, test kits, reagents and other devices used to perform diagnostic testing by clinical laboratories. In the past, the FDA has taken the position that it has regulatory authority over laboratory-developed tests ("LDTs"), but has exercised enforcement discretion in not regulating most LDTs performed by high complexity CLIA-certified laboratories. LDTs are tests designed, developed, and performed in-house by a laboratory. Such laboratories are subject to regulation under CLIA but have not been subject to regulation by the FDA under the agency's medical device requirements. A significant portion of the total volume of genetic or molecular testing is performed with LDTs.
In mid-2010, the FDA announced that it would begin regulating LDTs, including laboratory developed molecular tests, and in October 2014 issued proposed guidance on the regulation of LDTs for public comment. On January 13, 2017, the FDA released a discussion paper synthesizing public comments on the 2014 draft guidance documents and outlining a possible approach to regulation of LDTs. The discussion paper has no legal status and does not represent a final version of the LDT draft guidance documents. The FDA worked with regulatory advocacy groups to bring forward legislative approaches specifically for in vitro diagnostic tests including LDTs. For example, in 2021, the Verifying Accurate, Leading-edge, IVCT Development ("VALID") Act was introduced to Congress and provided a framework to change IVDs and LDTs to in vitro clinical tests ("IVCTs"). The proposed regulation would give the FDA oversight of LDTs once it becomes law. In 2022, the VALID Act was incorporated into the Senate user fee bill but was not included in the year-end Consolidated Appropriations Act of 2022. Subsequently, the VALID Act was introduced to Congress again in March 2023.
On April 29, 2024, the FDA published a final rule on LDTs, in which FDA outlines its plan to end enforcement discretion for many LDTs in five stages over a four-year period.
- In Phase 1 (effective May 6, 2025), clinical laboratories would be required to comply with medical device reporting, correction/removal reporting, and certain quality systems complaint handling requirements.
- In Phase 2 (effective May 6, 2026), clinical laboratories would be required to comply with all other device requirements (e.g., establishment registration and device listing, labeling, investigational use requirements), except for remaining quality systems requirements and premarket review requirements.
- In Phase 3 (effective May 6, 2027), clinical laboratories would be required to comply with all remaining quality systems requirements.
- In Phase 4 (effective November 6, 2027), clinical laboratories would be required to comply with premarket submission requirements for high-risk tests (i.e., tests subject to FDA's premarket approval (PMA) requirement).
- In Phase 5 (effective May 6, 2028), clinical laboratories would be required to comply with premarket submission requirements for moderate- and low- risk tests (i.e., tests subject to de novo classification or the 510(k) requirement).
On May 29, 2024, the American Clinical Laboratory Association filed a lawsuit challenging the FDA's authority to regulate LDTs as medical devices under the FDCA. Subsequently, on August 19, 2024, the Association for Molecular Pathology filed a lawsuit similarly challenging FDA's final rule on LDTs. The outcomes of these lawsuits is uncertain at this time.
The Company's subsidiary, DNAG, sells its DNA collection systems to certain laboratories and other customers for use with LDTs. The FDA's increased regulation of LDTs could make it more difficult for laboratories and other customers to continue offering LDTs that involve genetic or molecular testing. This, in turn, could increase costs, delay the introduction of new LDTs and reduce demand for DNAG's products and adversely impact the Company's revenues.
In recent years, the Department of Justice indicted a number of telemedicine companies and cancer genetic testing laboratories for allegedly submitting fraudulent insurance claims to Medicare. A number of these companies were customers of DNAG. As a result of these activities, the FDA has issued letters to genetic testing laboratories indicating that it plans to increase oversight of this market which has caused some of these companies to stop providing testing options or to change how they are reporting the information provided by the testing. The activities have negatively affected this market and there is a risk that these enforcement actions will continue to negatively affect this market by forcing laboratories to either stop offering such services or restricting the use of such services. Such a reduction in testing could result in decreased sales of the Company's DNA collection devices.
Regulation - Risk 10
Federal and State Laws Pertaining to Healthcare Fraud and Abuse Could Adversely Affect the Company's Business, Financial Condition and Results of Operations.The Company is subject to various federal and state laws targeting fraud and abuse in the healthcare industry, including anti-kickback laws, false claims laws, laws constraining the sales, marketing and promotion of medical devices by limiting the kinds of financial arrangements that manufacturers of these products may enter into with physicians, hospitals, laboratories and other potential purchasers of medical devices, and laws requiring the reporting of certain transactions between manufacturers and healthcare professionals. Violations of these laws are punishable by criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in government healthcare programs such as Medicare and Medicaid. Many of the existing requirements have not been definitively interpreted by state authorities or courts, and available guidance is limited. Unless and until the Company is in full compliance with these laws, it could face enforcement action and fines and other penalties, and could receive adverse publicity, all of which could materially harm its business. In addition, changes in or evolving interpretations of these laws, regulations, or administrative or judicial interpretations, may require the Company to change its business practices or subject its business practices to legal challenges, which could have a material adverse effect on its business, financial condition and results of operations.
Litigation & Legal Liabilities2 | 3.0%
Litigation & Legal Liabilities - Risk 1
The Company May Face Product Liability Claims for Injuries Resulting From the Use of Its Products.Litigation & Legal Liabilities - Risk 2
The Company's U.S. Government Contracts and Related Administrative Processes Are Subject to Audits and Cost Adjustments by the Federal Government.Federal government agencies can audit and investigate government contracts and the administrative processes and systems of government contractors. These agencies can review the Company's performance on government contracts, pricing practices, cost structure, and compliance with applicable laws, regulations and standards. They can also review the Company's compliance with government regulations and policies and the adequacy of its internal control systems and policies, including its purchasing, accounting, estimating, compensation and management information processes and systems. Any costs found to be improperly allocated to a specific government contract, unallowable or unreasonable will not be reimbursed, and any such costs already reimbursed may be required to be refunded and certain penalties may be imposed. Adjustments arising from government audits and reviews could have a material adverse effect on the Company's business, financial condition, results of operations and prospects.
Moreover, if any administrative process or system related to such contracts is found not to comply with governmental requirements, the Company may be subjected to government scrutiny that could delay or otherwise adversely affect its ability to compete for or perform government contracts or collect its revenue in a timely manner. An unfavorable outcome of an audit of the Company's government contracts could adversely affect its results of operations.
Taxation & Government Incentives3 | 4.5%
Taxation & Government Incentives - Risk 1
The Company is Subject to Risks Related to Government Funding and Customer Ordering.Taxation & Government Incentives - Risk 2
Changes in tax laws or in their implementation or interpretation may adversely affect us or our investors.Added
The rules dealing with the U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service, or IRS, and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application), including with respect to net operating losses and research and development tax credits, could adversely affect us or holders of our common stock. In recent years, many changes have been made and changes are likely to continue to occur in the future. For example, recent legislation that was signed into law on July 4, 2025 made significant changes to U.S. federal tax law.
It cannot be predicted whether, when, in what form, or with what effective dates, new tax laws may be enacted, or regulations and rulings may be enacted, promulgated or issued under existing or new tax laws, which could result in an increase in our or our stockholders' tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.
Taxation & Government Incentives - Risk 3
Reductions in Government Funding and Research Budgets Could Adversely Affect the Company's Business and Financial Results.The Company sells its OraQuick ADVANCE HIV-1/2 and OraQuick HCV tests into the U.S. public health market which consists of state, county and other governmental public health agencies, community based organizations, service organizations and similar entities. It also sells these products into the hospital market. Many of these customers depend to a significant degree on grants or funding provided by governmental agencies to run their operations including programs that use the Company's products. In international markets, the Company often sell products such as its OraQuick HIV Self-Test to or through foreign governmental agencies or parties funded by such agencies.
Many of the Company's sample management solutions are sold to researchers at academic institutions, pharmaceutical and biotechnology companies, government laboratories and private foundations. Many research customers are dependent for their funding on grants from U.S. governmental agencies such as the NIH and agencies in other countries to pay for the products and services they purchase. These research customers also purchase the Company's single order fulfillment services.
Government funding is subject to the political process, which is inherently fluid and unpredictable. Under the Trump administration, the NIH announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect costs. Indirect costs represented more than 25% of total grant dollars awarded by the NIH in 2023. Our research customers may face increased financial pressure due to this change or any future caps on indirect costs. While, as of the date of this filing, the order has been temporarily stayed, there can be no assurance that it will not take effect or that other adverse actions will not be taken. Further, our revenue may be adversely affected if our research customers delay purchases as a result of uncertainties surrounding the approval of government budget proposals, including reduced allocations to government agencies, such as the NIH.
The Company has also received government funding for certain research and development projects, including, most recently, through the Rapid Response Partnership Vehicle ("RRVP") for the development of a Marburg Virus Disease ("MVD") rapid antigen test. The level of available government grants or funding in the U.S. and elsewhere is unpredictable and may be affected by various factors including economic conditions, legislative and regulatory developments, political changes, civil unrest and changing priorities for research and development activities. Further, government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to government agencies in the U.S. and other countries that fund life sciences research and development activities. Any reduction or delay in government or other funding as a result of legislative or regulatory changes or other factors, could cause the Company's customers to delay, reduce or forego purchases of its products and services.
Environmental / Social2 | 3.0%
Environmental / Social - Risk 1
Failure to Comply With Data Protection Requirements or Privacy Laws Could Increase the Company's Costs.Environmental / Social - Risk 2
Failure to Comply With Privacy, Security and Breach Notification Regulations May Increase the Company's Costs.In the past, the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA") has generally affected the Company indirectly, as the Company is generally neither a Covered Entity nor a Business Associate, as further defined under HIPAA, to Covered Entities. The Company has in place certain administrative, technical and physical safeguards to protect the privacy and security of consumers' personal information and endeavors to comply with all applicable state and federal laws with respect to the protection of consumers' personal information. The Company is required to comply with varying state privacy, security and breach reporting laws. If it does not comply with existing or new laws and regulations related to properly transferring data containing consumers' personal information, it could be subject to monetary fines, civil penalties or criminal sanctions. In addition to other federal and state laws that protect the privacy and security of consumers' personal information, the Company may be subject to enforcement and interpretations by various governmental authorities and courts resulting in complex compliance issues. Moreover, the potential for enforcement action against the Company is now greater, as the U.S. Department of Health and Human Services (HHS) can take action directly against Business Associates. Thus, while the Company believes it is and will be in compliance with all required HIPAA standards, there is no guarantee that the government will agree. Enforcement actions can be costly and interrupt regular operations of the Company's business. For example, it could incur damages under state laws pursuant to an action brought by a private party for the wrongful use or disclosure of consumers' personal information.
Finance & Corporate
Total Risks: 15/67 (22%)Below Sector Average
Share Price & Shareholder Rights4 | 6.0%
Share Price & Shareholder Rights - Risk 1
Future Sales of Shares of the Company's Common Stock Could Adversely Affect the Trading Price of Its Common Stock and Its Ability to Raise Funds in New Equity Offerings.Share Price & Shareholder Rights - Risk 2
Certain Provisions in the Company's Certificate of Incorporation and Bylaws and Under Delaware Law Could Make a Third-Party Acquisition of the Company Difficult.The Company's Certificate of Incorporation and Bylaws contain provisions that could make it more difficult for a third party to acquire it, even if doing so would be beneficial to the Company's stockholders. The Company is also subject to certain provisions of Delaware law that could delay, deter or prevent a change in control of it. These provisions could limit the price investors might be willing to pay in the future for shares of the Company's Common Stock.
Share Price & Shareholder Rights - Risk 3
Future Sales of the Company's Common Stock by Existing Stockholders, Executive Officers or Directors Could Depress the Market Price of Its Common Stock and Make It More Difficult for the Company to Sell Stock in the Future.Sales of the Company's Common Stock in the public market, or the perception that such sales may occur, could negatively impact the market price of its Common Stock. The Company is unable to estimate the number of shares of its Common Stock that may actually be resold in the public market since this will depend on the market price for its Common Stock, the individual circumstances of the sellers and other factors.
The Company has a number of institutional stockholders that own significant blocks of its Common Stock. If one or more of these stockholders sell large portions of their holdings in a relatively short time, for liquidity or other reasons, the prevailing market price of the Company's Common Stock could be negatively affected. In addition, it is possible that one or more of the Company's executive officers or non-employee members of its Board of Directors could sell shares of its Common Stock during an open trading window or pursuant to a 10b5-1 sales plan under the Company's Insider Trading Policy. These transactions and the perceived reasons for these transactions could have a negative effect on the prevailing market price of the Company's Common Stock.
Share Price & Shareholder Rights - Risk 4
The Company's Stock Price Could Continue to be Volatile.The Company's stock price has been volatile, has fluctuated substantially in the past, may be volatile in the future and could experience substantial declines. The following factors, among others, could have a significant impact on the market for the Company's Common Stock:
- The performance of the Company's business, including its efforts to increase sales of OraQuick HIV, HCV and sample management solutions and its OraQuick In-Home HIV test and HIV Self-Test;- Future announcements concerning the Company and its products or services, including with respect to significant acquisitions, strategic collaborations and joint ventures;- Ability to achieve the expected benefits, enhanced revenue growth and synergies from strategic acquisitions, including the Company's recent acquisition of Sherlock;- Clinical results with respect to the Company's products or services or those of its competitors;- The status of clinical studies and pending submissions for required regulatory approvals;- The announcement of regulatory or enforcement actions by the FDA or other agencies against the Company, its products or services, or one or more of its customers;- The gain or loss of significant contracts and availability of funding for the purchase of the Company's products and services;- Delays in the development, regulatory approval or commercialization of new or enhanced products or services;- Legislative developments and industry or competitive trends;- Biological or medical discoveries;- Disputes or developments with key customers, distributors or suppliers;- Developments in patent or other proprietary rights;- Litigation or threatened litigation;- Complaints or concerns about the performance or safety of the Company's products and publicity about those issues, including publicity expressed through social media or otherwise over the internet;- Failure to achieve, or changes in, financial estimates by securities analysts and comments or opinions about the Company by securities analysts or major stockholders;- Governmental regulation;- Changes in the level of competition;- Loss of or declines in sales to major distributors or customers or changes in the mix of products sold;- Period-to-period fluctuations in the Company's operating results;- Additions or departures of key personnel;- General market and economic conditions; and - Terrorist attacks, civil unrest, war and national disasters, including pandemics.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the market price of the Company's Common Stock, as well as the stock of many companies in the diagnostics and life sciences industries. Often, price fluctuations are unrelated to the operating performance of the specific companies whose stock is affected.
In the past, following periods of volatility in the market price of a company's stock, securities class action litigation has occurred against the issuing company. If the Company were subject to this type of litigation in the future, it could incur substantial costs and experience a subsequent diversion of management's attention and resources, each of which could have a material adverse effect on the Company's revenue and earnings. Any adverse determination in this type of litigation could also subject the Company to significant liabilities.
Accounting & Financial Operations6 | 9.0%
Accounting & Financial Operations - Risk 1
The Company Has Experienced Losses in the Past and May Not Be Able to Again Achieve and Maintain Profitable Operations.Accounting & Financial Operations - Risk 2
Because the Company Does Not Intend to Pay Cash Dividends on Its Common Stock, an Investor in the Company's Common Stock Will Benefit Only if the Its Common Stock Appreciates in Value.The Company currently intends to retain its current earnings and future earnings, if any, to finance the expansion of its business and does not expect to pay any cash dividends on its Common Stock in the foreseeable future. As a result, the success of an investment in the Company's Common Stock will depend entirely upon any future appreciation. There is no guarantee that OraSure's Common Stock will appreciate in value or even maintain the price at which investors purchased their shares.
Accounting & Financial Operations - Risk 3
An Impairment of Goodwill and Intangible Assets Could Reduce the Company's Earnings.At December 31, 2024, the Company's consolidated balance sheet reflected approximately $40.3 million of goodwill and approximately $17.4 million of intangible assets. Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets. U.S. generally accepted accounting principles ("U.S. GAAP") require the Company to test goodwill for impairment on an annual basis or when events or circumstances occur indicating that goodwill might be impaired. Long-lived assets, such as intangible assets with finite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment review often cannot be done at the level of the individual asset and it must instead be applied to a group of assets. For the purpose of the Company's annual goodwill impairment testing based on the current circumstances of how the Company manages or business, this group of assets is the Company as a whole. If the Company determines that any of its goodwill or intangible assets were impaired, it will be required to take an immediate charge to earnings and its results of operations could be adversely affected. The Company recognized a pre-tax impairment charge of $8.5 million related to intangible assets during the year ended December 31, 2023, which is reported in loss on impairments in the Company's consolidated statement of operations.
Accounting & Financial Operations - Risk 4
The Company May Experience Fluctuations in Its Financial Results or Fail to Meet Its Financial Projections.The Company's operating results can fluctuate from quarter to quarter and year to year, which could cause its growth or financial performance to fall below the expectations of investors and securities analysts. The Company's financial projections for future periods are based on a number of assumptions, including estimated demand for its products. However, sales to its distributors and other customers may fall short of expectations because of lower than estimated demand or other factors, including continued volatility and disruption in economic conditions, increasing competition, seasonal fluctuations, changes in ordering patterns or business strategy, reduced governmental funding and other circumstances described elsewhere in this Annual Report. Infrequent, unusual or unexpected changes in revenues or costs could also contribute to the variability of the Company's financial results.
Customers in certain of the markets the Company serves often submit a high percentage of purchase orders in the third month of a calendar quarter. Although this can vary from quarter to quarter, many customers make purchase decisions late in a quarter due to budgetary or financial requirements. In addition, certain governmental customers must fully spend budgeted funds by the end of their fiscal year or risk losing these funds, which can contribute to fluctuations in the Company's sales from year-to-year. This can make it difficult to accurately forecast whether the Company will achieve its quarterly sales forecasts and can cause variability in its operating results.
In addition, the Company's products provide different contributions to its gross margin. Accordingly, its operating results could also fluctuate and be affected by the mix of products sold and the relative prices and gross margin contribution of those products. Failure to achieve operating results consistent with the expectations of investors and securities analysts could adversely affect the Company's reputation and the price of its Common Stock.
Accounting & Financial Operations - Risk 5
If the Company Fails To Establish and Maintain Proper And Effective Internal Control Over Financial Reporting, Its Operating Results and Its Ability to Operate Its Business Could Be Harmed.Ensuring that the Company has adequate internal financial and accounting controls and procedures in place so that it can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. The Company is required to comply with the requirements of the Sarbanes-Oxley Act of 2002, or SOX, which requires that it maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, the Company must perform system and process evaluation, document its controls and perform testing of its key controls over financial reporting to allow management and its independent public accounting firm to report on the effectiveness of its internal control over financial reporting, as required by Section 404 of SOX. The Company's testing, or the subsequent testing by its independent public accounting firm, may reveal deficiencies in its internal control over financial reporting that are deemed to be material weaknesses. For instance, management identified a material weakness in the Company's internal control over financial reporting related to customer pricing in the revenue recognition process and concluded that its disclosure controls and procedures were not effective due to the existence of the material weakness as of September 30, 2023, which has since been remediated. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
Accounting & Financial Operations - Risk 6
The Company's Revenues Could be Affected by Third-Party Reimbursement Policies and Potential Cost Constraints.The end-users of certain of the Company's products include hospitals, physicians and other healthcare providers. Use of the Company's products could be adversely impacted if these end-users do not receive adequate reimbursement for the cost of its products from their patients' healthcare insurers or payors. The Company's net sales could also be adversely affected by changes in reimbursement policies of governmental or private healthcare payors, including in particular the level of reimbursement for the Company's products.
In the United States, hospitals, physicians and other healthcare providers who purchase diagnostic products generally rely on third-party payors, such as private health insurance plans, Medicare and Medicaid, to reimburse all or part of the cost of the product and procedure. The overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services. Given the efforts to control and reduce healthcare costs in the United States in recent years, currently available levels of reimbursement may not continue to be available in the future for the Company's existing products or products under development. Third-party reimbursement and coverage may not be available or adequate in either the United States or international markets, current reimbursement amounts may be decreased in the future and future legislation, and regulation or reimbursement policies of third-party payors, may reduce the demand for the Company's products or its ability to sell its products on a profitable basis. In addition, the reimbursement approval process may delay the market introduction of the Company's products.
Debt & Financing1 | 1.5%
Debt & Financing - Risk 1
The Company May Require Future Additional Capital.Corporate Activity and Growth4 | 6.0%
Corporate Activity and Growth - Risk 1
Failure to Achieve the Company's Financial and Strategic Objectives Could Have a Material Adverse Impact on Its Business Prospects.Corporate Activity and Growth - Risk 2
We May Fail to Realize the Anticipated Benefits of the Acquisition of Sherlock.The success of the acquisition of Sherlock will depend on, among other things, our ability to combine our business with Sherlock in a manner that allows us to achieve developmental and operational synergies. The integration process could result in the loss of key employees, the disruption of our ongoing business or the ongoing business of Sherlock, or inconsistencies in standards, controls, procedures, or policies, in each case, that could adversely affect our ability to achieve the anticipated benefits of the acquisition. Integration efforts between the two companies will also divert management's attention from our core business and other opportunities that could have been beneficial to our stockholders. An inability to realize the full extent of, or any of, the anticipated benefits of the acquisition, as well as any delays encountered in the integration process, could have an adverse effect on our business and results of operations, which may affect the value of our common stock. If we are unable to achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer or cost more to realize than expected.
Corporate Activity and Growth - Risk 3
Acquisitions or Investments May Not Generate the Expected Benefits and Could Disrupt the Company's Ongoing Business, Distract Its Management, Increase Its Expenses and Adversely Affect Its Business.Since the beginning of 2019, the Company has acquired or made investments in several companies through which it has gained access to new technologies, products and services which are complementary to its existing business and aligned with its long-term business strategy. For example, in January 2024, the Company announced its investment and entry into wide ranging strategic distribution agreements with KKR Sapphiros L.P. ("Sapphiros"), and in December 2024, the Company acquired Sherlock Biosciences, Inc. ("Sherlock"), expanding the Company's product pipeline with the addition of
Sherlock's molecular diagnostics platform. The Company will likely continue to pursue strategic acquisitions or investments as a way to expand its business. These activities, and their impact on the Company's business, are subject to many risks, including the following:
- Suitable acquisitions or investments may not be found or consummated on terms or schedules that are satisfactory to the Company or consistent with its objectives;- The Company may be unsuccessful in competing for acquisitions with other entities, some of which have greater financial resources or may be better able to realize synergies with a potential target;- The benefits expected to be derived from an acquisition or investment may not materialize and could be affected by numerous factors, such as regulatory developments, insurance reimbursement, the Company's inexperience with new businesses or markets, general economic conditions and increased competition;- The Company may be unable to successfully integrate an acquired company's personnel, assets, management, information technology systems, accounting policies and practices, products, services and/or technology into the Company's business;- Worse than expected performance of an acquired business may result in the impairment of intangible assets;- Acquisitions may require substantial expense and management time and could disrupt the Company's business;- The Company may not be able to accurately forecast the performance or ultimate impact of an acquired business;- The Company may have difficulties in coordinating geographically separate organizations;- The Company may fail to successfully manage relationships with customers, distributors and suppliers of an acquired business;- An acquisition may result in a diversion of resources from the Company's existing products, business and technologies;- An acquisition and subsequent integration activities may require greater capital and other resources than originally anticipated at the time of acquisition;- To the extent the Company agrees to pay contingent consideration for an acquisition, if and how much of such consideration it is required to pay may be subject to dispute, resulting in the distraction of the Company's management team and the incurrence of legal costs;- An acquisition may result in employee anxiety, morale and/or engagement issues;- An acquisition may result in disparate information technology, internal control, financial reporting and record-keeping systems;- An acquisition may result in new partners or customers who may operate on terms and programs different than the Company's;- An acquisition may result in employees not familiar with the Company's operations;- An acquisition may result in new products and services, including the risk that any underlying intellectual property associated with such products and services may not have been adequately protected or that such products and services may infringe on the proprietary rights of others;- An acquisition may result in the incurrence of unexpected expenses, stockholder lawsuits, the dilution of the Company's earnings or its existing stockholders' percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from the seller(s) of the acquired business;- An acquisition may result in the loss of the Company's or the acquired company's key personnel, customers, distributors or suppliers; and - An acquisition of a foreign business may involve additional risks, including, but not limited to, foreign currency exposure, liability or restrictions under foreign laws or regulations, and the Company's inability to successfully assimilate differences in foreign business practices or overcome language or cultural barriers and other inherent risks of operating in unfamiliar legal and regulatory environments.
The occurrence of one or more of the above or other factors may prevent the Company from achieving all or a significant part of the benefits expected from an acquisition or investment. This may adversely affect the Company's financial condition, results of operations and ability to grow its business or otherwise achieve its financial and strategic objectives.
Corporate Activity and Growth - Risk 4
The Company May Need Strategic Partners to Assist in Developing and Commercializing Some of Its Products.Although the Company may elect to pursue some product opportunities independently, opportunities that require a technology controlled by a third party, a significant level of investment for development and commercialization or a distribution network beyond its existing sales force may necessitate involving one or more strategic partners. Further, the Company's ability to enter into agreements with additional strategic partners depends in part on convincing them that its products can help achieve and accelerate their goals and efforts. The Company's strategy for development and commercialization of products may entail entering into arrangements with distributors or other corporate parties, universities, research laboratories, government agencies, licensees and others. Relying on collaborative relationships could be risky to the Company's business for a number of reasons, including:
- The Company may be required to transfer material rights to such strategic collaborators, government agencies, licensees and others;- The Company's collaborators may not devote sufficient resources or attach a sufficiently high priority to the success of its collaboration;- The Company's collaborators may not obtain regulatory approvals necessary to continue the collaborations in a timely manner;- The Company has limited access to its collaborator's confidential corporate information and sudden unexpected changes in ownership or strategy or other material events affecting a collaborator of which the Company is not made aware of in a timely manner, or at all, could adversely impact the Company's relationship;- The Company's collaborators may be acquired by another company, sell the part of their business related to the Company's collaboration, decide to terminate the Company's collaborative arrangement or become insolvent;- The Company's collaborators may develop technologies or components competitive with its products;- The Company's collaborators may fail to deliver technologies or components that satisfy market requirements or such products may fail to perform properly;- Disagreements with collaborators could result in the termination of the relationship or litigation;- Collaborators may not have sufficient capital resources; and - The Company may not be able to negotiate future collaborative arrangements, or renewals of existing collaborative agreements, on acceptable terms or at all.
While the Company generally expects that its collaborative partners will have an economic motivation to succeed in performing their contractual responsibilities, there is no assurance that they will do so, either at the level required or at all, and the amount and timing of resources to be devoted to these activities will be controlled by others. Reliance on strategic agreements can also make it difficult to accurately forecast the Company's future revenues or operating results. There can be no assurance that the expected revenues or profits will be fully derived from such arrangements.
Tech & Innovation
Total Risks: 10/67 (15%)Below Sector Average
Innovation / R&D3 | 4.5%
Innovation / R&D - Risk 1
New or Changed Testing Guidelines Could Affect Sales of the Company's Diagnostic Products.Innovation / R&D - Risk 2
The Company's Research, Development and Commercialization Efforts May Not Succeed and Its Competitors May Develop and Commercialize More Effective or Successful Offerings.In order to remain competitive, the Company must regularly commit substantial resources to research and development and the commercialization of new or enhanced products and services. The research and development process generally takes a significant amount of time from inception to commercial launch. This process is conducted in various stages. During each stage there is a substantial risk that the Company will not achieve its goals on a timely basis, or at all, and it may have to abandon a new or enhanced product or service in which it has invested substantial time and money.
Successful products and services can require significant development and investment, including testing to demonstrate their performance capabilities, cost-effectiveness or other benefits prior to commercialization. Regulatory approval or clearance must be obtained before most products may be sold and additional development efforts on these products may be required before any regulatory authority will review them. As noted above, regulatory authorities may not issue such approvals, clearances or certifications or may substantially delay or condition such action. Even if a product is developed and all applicable regulatory approvals, clearance or certifications are obtained, there may be little or no market for the product and entry into or development of new markets for the Company's products and services may require an investment of substantial resources, such as new employees, offices and manufacturing facilities. Moreover, the Company may spend a significant amount of money on manufacturing facilities, advertising or other activities and fail to develop a market for the product or service. Other factors that could affect the success of the Company's efforts include its ability to manufacture products in a cost-effective manner and whether it can obtain necessary intellectual property rights and protection in the markets where the product or service is sold.
If the Company fails to develop and gain commercial acceptance for its products and services, or if competitors develop more effective products and services or a greater number of successful new products and services, customers may decide not to purchase the Company's products and services or may purchase and use products and services developed by its competitors. This would result in a loss of revenues and adversely affect the Company's results of operations, cash flow and business.
Innovation / R&D - Risk 3
If Acceptance and Adoption of Oral Fluid Testing and Collection Products Does Not Continue, the Company's Future Results May Suffer.The Company has made significant progress in gaining acceptance of oral fluid testing products, particularly for HIV testing in the public health, hospital, insurance and other markets. However, the degree of acceptance for these products is uncertain, and one or more markets may resist the adoption of oral fluid products as a replacement for other testing or collection methods in use today. As a result, there can be no assurance that the Company will be able to expand the use of its oral fluid testing products in these or other markets.
However, clinical reference laboratories and hospital-based laboratories currently provide the majority of diagnostic tests used by physicians and other healthcare providers in the U.S. In certain international markets such as Europe, diagnostic testing is performed primarily by centralized laboratories. The Company's future sales will depend, in part, on the Company's ability to expand market acceptance of rapid point-of-care testing by physicians, other healthcare providers and consumers and successfully compete against laboratory testing methods and products. Even if the Company can demonstrate that its products are more cost effective, save time, or have better performance or other benefits, physicians, other healthcare providers and consumers may resist changing to rapid point-of-care tests and instead may choose to obtain diagnostic results through laboratory tests. The Company's failure to achieve and expand market acceptance of its rapid point-of-care diagnostic tests with customers would have a negative effect on its future sales growth.
Trade Secrets2 | 3.0%
Trade Secrets - Risk 1
The Company's U.S. Government Contracts May Affect Its Intellectual Property Rights.Trade Secrets - Risk 2
The Company May Become Involved in Intellectual Property Disputes, Which Could Increase Its Costs and Limit or Eliminate Its Ability to Sell Products, Provide Services or Use Certain Technologies.From time to time, the Company has sought, and may in the future seek, to enforce its patents or other intellectual property rights through litigation. In addition, there are a large number of patents and patent applications in the Company's product and service areas, and additional patents may be issued to third parties relating to its product and service areas. The Company, its customers or its suppliers may be sued for infringement of patents or misappropriation of other intellectual property rights with respect to one or more of its products or services. Litigation in the Company's industry regarding patent and other intellectual property rights is prevalent and is expected to continue. The Company may also have disputes with parties that license patents to it if the Company believes the license is no longer needed for its products or services or the licensed patents are no longer valid or enforceable.
The Company's industry is characterized by a large number of patents, and the claims of these patents appear to overlap in many cases. As a result, there is a significant amount of uncertainty regarding the extent of patent protection and infringement. Companies may have pending patent applications, which are typically confidential for the first eighteen months following filing, that cover technologies the Company incorporates in its products or services. Accordingly, the Company may be subjected to substantial damages for past infringement or be required to modify its products or services or stop selling them if it is ultimately determined that its products or services infringe a third party's proprietary rights. In addition, governmental agencies could commence investigations or criminal proceedings against the Company's employees or the Company itself relating to claims of misuse or misappropriation of another party's proprietary rights.
Intellectual property litigation is costly. As such, the Company's involvement in litigation or other legal proceedings with respect to patents or other intellectual property and proprietary technology, either as a plaintiff or defendant, could adversely affect its revenues, market share, results of operations and business because:
- It could consume a substantial portion of managerial and financial resources;- Its outcome would be uncertain and a court may find that the Company's patents are invalid or unenforceable in response to claims by another party or that the third-party patent claims are valid and infringed by the Company's products or services;- An adverse outcome could subject the Company to the loss of the protection of its patents or to liability in the form of past royalty payments, penalties, reimbursement of litigation costs and legal fees, special and punitive damages, or future royalty payments, any of which could significantly affect the Company's future earnings;- Governmental agencies may commence investigations or criminal proceedings against the Company's employees, former employees and the Company itself relating to claims of misappropriation or misuse of another party's proprietary rights;- Failure to obtain a necessary license upon an adverse outcome could prevent the Company from selling its current products or services or other products or services it may develop or acquire;- The Company may be required to alter its product or services, given the proprietary rights of others;- The pendency of any litigation may in and of itself cause the Company's distributors and customers to reduce or terminate purchases of its products or services; and - A court could award a preliminary and/or permanent injunction, which would prevent the Company from selling its current or future products or services.
The Company may indemnify some customers and strategic partners under its agreements with such parties if its products, services or activities have actually or allegedly infringed upon, misappropriated or misused another party's proprietary rights. Further, the Company's products or services may contain technology provided to it by other parties, such as universities, contractors, suppliers, customers or collaborators, and it may have little or no ability to determine in advance whether such technology infringes the intellectual property rights of a third party. These other parties may also not be required or financially able to indemnify the Company in the event that an infringement or misappropriation claim is asserted against the Company.
The Company may also become involved in other types of disputes regarding intellectual property rights, including state, federal or foreign court litigation, and patent interference, patent reexamination, patent reissue, or trademark opposition proceedings in the United States Patent and Trademark Office. Opposition or revocation proceedings could be instituted in a foreign patent office as well. Under federal law, various forms of post issuance patent review proceedings have been authorized, including inter-parties review processes. These proceedings permit certain persons to challenge the validity of a patent on the grounds that it was known from the prior art. As a result of such proceedings several of the Company's patents have been successfully challenged. The filing of such proceedings, or the issuance of an adverse decision in such proceedings, could result in the loss of valuable patent rights that could have a material adverse effect on the Company's business, financial condition, results of operations and growth prospects. For more information, see Item 3. Legal Proceedings.
Cyber Security1 | 1.5%
Cyber Security - Risk 1
Cybersecurity Incidents and Other Disruptions Could Compromise the Company's Information, Expose It to Liability and Harm Its Reputation and Business.Technology4 | 6.0%
Technology - Risk 1
The Company Relies on Information Technology in Its Operations and Any Material Failure, Inadequacy, Interruption or Security Breach of that Technology Could Harm Its Ability to Efficiently Operate Its Business.Technology - Risk 2
The Use of New And Evolving Technologies, Such As Artificial Intelligence ("AI"), In Our Offerings May Present Risks And Challenges That Can Impact Our Business Including by Posing Security Risks to Our Confidential Information, Proprietary Information, and Personal Data.We may build and integrate AI into our business practices, and the evolving nature of AI technologies and the surrounding legal and regulatory environment presents risks and uncertainties that could affect our business. The use of AI technology can give rise to intellectual property risks, including compromises to proprietary intellectual property and intellectual property infringement. Additionally, we expect to see increasing government regulation related to artificial intelligence use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area. For example, in the U.S., a number of states have proposed and passed laws regulating various uses of AI. In Europe, the EU's Artificial Intelligence Act ("AI Act") - which entered into force on August 1, 2024 and, with some exceptions, will begin to apply as of August 2, 2026 - imposes significant obligations on providers and deployers of high-risk artificial intelligence systems, and encourages providers and deployers of artificial intelligence systems to account for EU ethical principles in their development and use of these systems. If we develop or deploy AI systems that are governed by these laws and regulations, we may be required to adopt higher standards of data quality, transparency, and human oversight, and adhere to specific and potentially burdensome and costly ethical, accountability, and administrative requirements. Even in the absence of dedicate AI laws and regulations, we may be subject to novel legal and business risks relating to our adoption of these new technologies. Our vendors may in turn incorporate AI tools into their own offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Technology - Risk 3
The Company's Success Depends on Its Ability to Protect Its Proprietary Technology.The Company's industry places considerable importance on obtaining patent, trademark and trade secret protection, as well as other intellectual property rights, for new technologies, products and processes. The Company's success depends, in part, on its ability to develop and maintain a strong intellectual property portfolio or obtain licenses to patents and technologies, both in the United States and in other countries. If the Company cannot continue to develop, obtain and protect intellectual property rights, its revenues and profits could be adversely affected. Moreover, the Company's current and future licenses or other rights to patents and other technologies may not be adequate for the operation of its business.
As appropriate, the Company intends to file patent applications and obtain patent protection for its proprietary technology. These patent applications and patents will cover, as applicable, compositions of matter for the Company's products, methods of making those products, methods of using those products and apparatuses relating to the use or manufacture of those products.
The Company also relies on trade secrets, know-how and continuing technological advancements to protect its proprietary technology. The Company has entered, and will continue to enter, into confidentiality agreements with its employees, consultants, advisors and collaborators. The Company's employees and third-party consultants also sign agreements requiring that they assign to it interests in inventions and original expressions and any patents or copyrights arising from their work. However, these parties may not honor these agreements.
The Company cannot guarantee that the process of filing patents, the laws governing trade secrets and proprietary information, or any agreements the Company enters into with employees, consultants, advisors or collaborators will provide adequate protection of its intellectual property rights. For example, the Company's competitors may develop similar products without infringing on any of its intellectual property rights or design around its proprietary technologies. Employees, consultants and others who participate in the development of the Company's products may breach their agreements with it regarding its intellectual property, and the Company may not have adequate remedies for the breach. The Company also may not be able to effectively protect its intellectual property rights in some foreign countries, as many countries do not offer the same level of legal protection for intellectual property as the United States.
For a variety of reasons, the Company may decide not to file for patent, copyright or trademark protection outside of the U.S. The Company's trade secrets could become known through other unforeseen means. The absence of patent protection in certain parts of the Company's business may make it more difficult to protect its intellectual property. In addition, the Company's competitors may independently develop similar or alternative technologies or products that are equal or superior to its technology.
Moreover, issued patents remain in effect for a fixed period and after expiration will not provide protection of the inventions they cover. Once the Company's patents expire, it may be faced with increased competition, which could reduce its revenues. It may also not be able to successfully protect its rights to unpatented trade secrets and know-how.
Some of the Company's employees, including scientific and management personnel, were previously employed by competing companies. Although the Company encourages and expect all of its employees to abide by any confidentiality agreement with a prior employer, competing companies may allege trade secret violations and similar claims against the Company. In addition, some of these agreements may conflict with, or be subject to, the rights of third parties with whom the Company's employees, consultants or advisers have prior employment or consulting relationships. An adverse determination may limit or restrict the type of work that certain employees involved with such products may perform.
The Company may collaborate with universities and governmental research organizations or receive funding for its products from government agencies. As a result, one or more of these entities may acquire part of the rights to any inventions or technical information derived from the Company's collaboration or funding relationship with them.
To facilitate development and commercialization of a proprietary technology base, the Company may need to obtain licenses to patents or other proprietary rights from other parties. Obtaining and maintaining such licenses may require the payment of substantial amounts. In addition, if the Company is unable to obtain these types of licenses, its product development and commercialization efforts may be delayed or precluded. Moreover, some licenses may be nonexclusive, and therefore the Company's competitors may have access to the same technology also licensed to the Company.
Technology - Risk 4
The Increasing Prevalence of AI-based Software Presents New Risks and Could Adversely Affect Our Business and Reputation.AI-based software and software making use of AI functionality, which the Company uses in certain parts of its business, is increasingly being used in the healthcare industry, such as for research, marketing, and commercialization, and we expect to use technology that uses AI in the future. As with many developing technologies, AI-based software presents risks and challenges. For example, algorithms may be flawed; data sets may be insufficient, of poor quality or contain biased information; and inappropriate or controversial data practices could impair results. If the analyses that AI-based software assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability and brand or reputational harm. Use of AI-based software may also lead to cybersecurity risks or the release of confidential proprietary information, including personal data, which may impact our ability to realize the benefit of our intellectual property or violate our internal policies, data protection laws or contractual requirements. The use of AI-based software may also result in unauthorized access of personal data or the intellectual property of third parties. Since the use of AI is subject to new or evolving laws and regulations, compliance may impose operational costs and limit our ability to use AI-based software, and failure to comply may result in potential government actions, litigation, fines, penalties or adverse publicity.
Macro & Political
Total Risks: 10/67 (15%)Above Sector Average
Economy & Political Environment3 | 4.5%
Economy & Political Environment - Risk 1
Economic Volatility and Disruption Resulting from the COVID-19 Pandemic and any Future Pandemic and Health Crises Could Adversely Affect the Company's Business, Financial Performance, Results of Operations, Cash Flow and Financial Condition or Those of Its Customers and Suppliers.Economy & Political Environment - Risk 2
Increasing Geopolitical and Economic Risk and Tariffs Could Negatively Affect Our Ability to Maintain Sales at Existing LevelsThe imposition of tariffs, non-tariff barriers, and other import and export restrictions have contributed to increased global economic uncertainty. The rise of economic nationalism could make it more difficult for us to attract new customers, retain existing customers, continue to produce and source in an optimal manner, maintain our supply chain, or maintain sales at existing levels, both in the United States and in other countries. Geopolitical and economic risks, together with trade protectionism have increased over the past few years in many regions of the world, including in the United States. Any of these risks, ensuing retaliation, or the further deterioration of trade relations between countries could make our offerings more expensive or non-competitive in the affected countries. Growing tensions, protectionist trade policies, and tariffs may also lead to a fragmentation of the global economy, a general reduction of international trade in goods and services, and a reduction in the integration of financial markets, any of which could materially and adversely affect our business results, cash flows, financial condition, or prospects.
Economy & Political Environment - Risk 3
Rising Inflation Rates Could Negatively Impact the Company's Revenues and Profitability if Increases in the Prices of Its Products or a Decrease in Consumer Spending Results in Lower Sales. In Addition, if the Company's Costs Increase and the Company Is Not Able to Pass Along These Price Increases to Its Customers, Its Net Income Would Be Adversely Affected, and the Adverse Impact May Be Material.Inflation rates, particularly in the United States, increased in recent years and continue to be subject to volatility. Increased inflation may result in decreased demand for the Company's products and services, increased operating costs (including the Company's labor costs), reduced liquidity, and limitations on its ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve previously raised, and may again raise, interest rates in response to concerns about inflation. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks. In an inflationary environment, the Company may be unable to raise the sales prices of its products at or above the rate at which its costs increase, which could/would reduce its profit margins and have a material adverse effect on its financial results and net income. The Company may also experience lower than expected sales and potential adverse impacts on its competitive position if there is a decrease in consumer spending or a negative reaction to its pricing. A reduction in the Company's revenue would be detrimental to its profitability and financial condition and could also have an adverse impact on its future growth.
International Operations2 | 3.0%
International Operations - Risk 1
The Company's International Presence May Increase Its Risks and Expose Its Business to Regulatory, Cultural or Other Restraints.International Operations - Risk 2
The Company's Inability To Expand International Sales Could Adversely Affect its Business and Results of Operations.One of the Company's strategic priorities is to substantially expand its product sales internationally. An opportunity to accomplish this objective is with the sale of the Company's OraQuick HIV Self-Test in support of large self-testing programs in certain African countries and elsewhere. The Company's OraQuick HIV Self-Test is also currently available in six European countries: United Kingdom, Germany, France, Italy, Spain and Portugal. The Company is also working to expand international sales of its professional HIV and HCV products and its sample management solutions.
While the Company believes international sales of these and other products represent attractive long-term opportunities with significant growth potential, there is no guarantee that these opportunities will materialize, continue or increase. Among other factors, competition from competitive lower priced products and the uncertainties of available funding could negatively impact the success of these opportunities. If international sales of these products do not occur or increase or if the Company is otherwise unable to expand international sales of its products, the Company's revenues and results of operations could be negatively impacted.
In addition, market conditions in many countries often require that the Company's sell its products at a price below the typical U.S. or European pricing in order to participate in these markets. As a result, sales in certain countries may contribute lower profit margins to the Company's business. To the extent these international sales comprise a large or increasing part of the Company's business, the Company's gross margins will be negatively affected. In addition, the Company may have difficulty selling its products at a sufficiently low price to maintain or increase this business over the long term without funding support from public health entities, government agencies or other sources. If the Company is unable to obtain or continue this funding support at sufficient levels, or at all, its revenues and results of operations could be negatively affected.
Natural and Human Disruptions2 | 3.0%
Natural and Human Disruptions - Risk 1
Terrorist Attacks, Natural Disasters, Public Health Crises, Political Unrest or Other Catastrophic Events Outside of the Company's Control May Adversely Affect Its Business.Natural and Human Disruptions - Risk 2
The Company Expects Revenue Levels From its InteliSwab COVID-19 Rapid Test to Continue to Decline.The Company experienced a significant decline in revenues from InteliSwab COVID-19 Rapid Test sales in 2024 and expects revenues to continue to decline in 2025. The Company has seen a reduction in the prevalence of COVID-19 since the height of the pandemic, particularly following the expiration of the public health emergency declarations related to COVID-19 in mid-2023. The Company's revenues relating to the Company's COVID-19 testing products have declined, and it expects they will continue to decline in the future if the prevalence of COVID-19 remains low. Further, if the COVID-19 pandemic becomes a seasonal virus or experiences fluctuations in prevalence, the Company could experience fluctuations in its revenues associated with its InteliSwab COVID-19 Rapid Tests. While there is still limited demand for COVID-19 testing products, there is no guarantee that current or anticipated demand will continue, or if demand does continue, that the Company will be able to produce its InteliSwab COVID-19 Rapid Test in quantities to meet the demand. A significant decline in demand for the InteliSwab COVID-19 Rapid Test without a corresponding increase in the Company's other businesses could have a material, adverse effect on the Company's results of operations, cash flow and financial position.
Capital Markets3 | 4.5%
Capital Markets - Risk 1
Conditions in the Banking System and Financial Markets, Including the Failure of Banks and Financial Institutions, Could Have an Adverse Effect on the Company's Operations and Financial Results.Capital Markets - Risk 2
Recent Volatility In Capital Markets and Lower Market Prices For the Company's Securities May Affect Its Ability to Access New Capital Through Sales of Shares of Its Common Stock or Issuance Of Indebtedness, Which May Materially Harm Its Liquidity, Limit Its Ability to Grow Its Business, Pursue Acquisitions or Improve Its Operating Infrastructure and Restrict Its Ability to Compete in Its Markets.The Company's operations consume substantial amounts of cash, and it intends to continue to make significant investments to support its business growth, respond to business challenges or opportunities, develop new solutions, retain or expand its current levels of personnel, improve its existing solutions, enhance its operating infrastructure, and potentially acquire complementary businesses and technologies. The Company's future capital requirements may be significantly different from its current estimates and will depend on many factors, including the need to:
- finance unanticipated working capital requirements;- develop or enhance its technological infrastructure and its existing solutions;- pursue acquisitions or other strategic relationships; and - respond to competitive pressures.
Accordingly, the Company may need to pursue equity or debt financing to meet its capital needs. With uncertainty in the capital markets and other factors, such financing may not be available on terms favorable to the Company or at all. If the Company raises additional funds through further issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution, and any new equity securities the Company issues could have rights, preferences, and privileges superior to those of holders of its common stock. Any debt financing secured by the Company in the future could involve additional restrictive covenants relating to its capital-raising activities and other financial and operational matters, which may make it more difficult for it to obtain additional capital and to pursue business opportunities, including potential acquisitions. If the Company is unable to obtain adequate financing or financing on terms satisfactory to it, the Company could face significant limitations on its ability to invest in its operations and otherwise suffer harm to its business.
Capital Markets - Risk 3
Changes in Foreign Currency Exchange Rates Could Negatively Affect the Company's Operating Results.The Company's financial statements are stated in U.S. dollars and, historically, most of its international sales have also been denominated in U.S. dollars. As a result, in the past the Company's exposure to foreign currency exchange rate risk has not been material. Nonetheless, these sales are subject to currency risks since changes in the values of foreign currencies relative to the value of the U.S. dollar can render the Company's products comparatively more expensive. These exchange rate fluctuations could negatively impact international sales of the Company's products, as could changes in the general economic conditions in those markets.
In addition, the revenues and expenses of the Company's subsidiary, DNAG, are recorded in Canadian dollars and the revenues and expenses of its subsidiary Novosanis are recorded in Euros. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars for purposes of reporting consolidated financial results. The Company's expectation is that the businesses of its foreign subsidiaries will continue to grow and its exposure to foreign currency exchange rates may be more significant than in past years.
Exchange rate fluctuations may affect the revenues and expenses of the Company's foreign subsidiaries and the translation of those financial results into U.S. dollars. Favorable movement in exchange rates have benefited the Company in prior periods. However, where there are unfavorable currency exchange rate fluctuations, the Company's consolidated financial statements including its balance sheet, revenues and results of operations, could be negatively affected. In addition, fluctuations in exchange rates could affect year-to-year comparability of operating results. In the past, the Company has not generally entered into hedging instruments to manage its currency exchange rate risk, but it may need to do so in the future. However, the Company's attempts to hedge against these risks may not be successful. If the Company is unable to successfully hedge against unfavorable foreign currency exchange rate movements, its consolidated financial results may be adversely impacted.
Ability to Sell
Total Risks: 9/67 (13%)Above Sector Average
Competition2 | 3.0%
Competition - Risk 1
The Company Expects to Face Increasing Competition From Other Providers of Diagnostic Tests and Sample Collection Products.Competition - Risk 2
The Company's Ability to Sell Products Could be Adversely Affected by Competition From New and Existing Products and Services.The markets the Company serves are highly competitive and rapidly changing and it expects competition to intensify as technological advances are made and become more widely known, and as new products and services reach the market. Many of the Company's principal competitors have considerably greater financial, technical and marketing resources than it does. As new products and services enter the market, the Company's products and services may become obsolete or a competitor's products and services may be more effective or attractive or more effectively marketed and sold than the Company's. In addition, there can be no assurance that the Company's competitors will not succeed in obtaining regulatory approval for new products and services that would render the Company's technologies, products and services obsolete or otherwise commercially unattractive, or introduce or commercialize such products and services before the Company can do so. If the Company fails to convince its customers of the advantages and economic value of its products and services or otherwise maintain and enhance its competitive position, its customers may decide to use products and services developed by competitors which could result in a loss of revenues. These developments could have a material adverse effect on the Company's business, financial condition and results of operations.
The Company also faces competition from products that are sold at a lower price. Where this occurs, customers may choose to buy lower cost products from third parties or the Company may be forced to sell its products at a lower price, both of which could result in a loss of revenues or a lower gross margin contribution from the sale of its products. The Company may also be required to increase its marketing efforts in order to compete effectively, which would increase its costs.
Demand4 | 6.0%
Demand - Risk 1
Increases in Demand for the Company's Products and Services Could Require It to Expend Considerable Resources or Harm Its Customer Relationships if It Is Unable to Meet That Demand.Demand - Risk 2
Changes in the Genomics Market May Adversely Affect the Company's Business.The genomics market has been the largest component of the Company's overall sample management solutions business for some time and the major drivers of this market have been the consumer genomics segment, which offers products and services to consumers to provide them with personalized health and genealogical information, and the disease risk management segment which offers genetic testing through physicians for a variety of applications including prenatal testing, risk screening and pharmacogenomics. The ancestry portion of the consumer genomics market may be maturing and the Company's sales to customers with offerings in this market have been volatile. The Company's genomics revenues have also been volatile due to changes in promotional strategies and purchasing patterns by certain customers which serve the consumer ancestry and genetic testing market and cost cutting and de-stocking efforts at some of the Company's disease risk management customers. These trends in the ancestry testing market may continue and revenues in this market may continue to be volatile.
In an effort to increase the Company's molecular revenues, it has devoted increasing time and attention to expanding sales of its genomics products both domestically and internationally, with both new and existing accounts, including co-clearances and co-promotions with strategic partners. While the Company believes these new markets represent large growth opportunities, there is no assurance that it will be successful in capitalizing on these opportunities or that it will be able to increase the Company's product sales consistent with the Company's expectations. Factors include, but are not limited to, the market acceptance of the Company's products, available funding, cost containment strategies implemented by customers, increasing competition and regulatory constraints could limit sales of the Company's genomics products. To the extent that the Company is unsuccessful or limited in expanding the its business into new markets, the Company's revenues and results of operations could be negatively affected.
Despite these challenges, the Company believes there is significant growth opportunity for its genomics products in the area of research by biotechnology companies, animal genetics, and disease risk management, which includes genetic risk testing, prenatal testing, carrier screening, pharmacogenomics testing and population heath studies.
Demand - Risk 3
Customer Concentration Creates Risk for the Company's Business.One of the Company's customers accounted for approximately 24% of its net consolidated revenues for the year ended December 31, 2024. Certain parts of the Company's business may continue to have a high customer concentration and depend disproportionately on a few large customers. To the extent that such a large customers fail to meet their purchase commitments, change their ordering patterns or business strategies, or otherwise reduce their purchases or stop purchasing the Company's products, or if it experiences difficulty in meeting the high demand by these larger customers for its products, the Company's revenues and results of operations could be adversely affected.
Demand - Risk 4
Consolidation in the Healthcare Industry Could Adversely Affect the Company's Future Revenues and Operating Results.The healthcare industry has experienced a significant amount of consolidation. As a result of this consolidation, competition to provide goods and services to customers has increased. In addition, group purchasing organizations and integrated health delivery networks have served to concentrate purchasing decisions for some customers, which has also placed pricing pressure on medical device suppliers. The Company may not be able to compete successfully in such a consolidated industry. The Company believes industry consolidation may continue as companies attempt to strengthen or hold their market positions and as more companies are acquired or cease operating. Further consolidation in the industry could exert additional pressure on the prices of the Company's products.
Sales & Marketing3 | 4.5%
Sales & Marketing - Risk 1
The Company's Failure to Maintain Existing Distribution Channels, or Develop New Distribution Channels, May Result in Lower Revenues.Sales & Marketing - Risk 2
The Company's Future Success Depends Upon Market Acceptance of its Existing and Future Products and Service Offerings.The Company's future success will depend, in part, on the market acceptance, and the timing of such acceptance, of products such as InteliSwab, OraQuick HIV Self-Test, OraQuick Ebola test and OMNIgene - GUT product offerings, and other new products or technologies that may be developed or acquired. In addition, the Company's future revenues will depend on market acceptance of new uses for the Company's saliva collection products, and the Company's new service offerings, such as Syphilis Health Check and OraQuick HCV Self-Test. To commercially market new uses of the Company's products and to achieve market acceptance, it will likely be required to undertake clinical studies to validate the new uses for its products and spend significant funds to complete product development and clinical studies and then undertake substantial marketing efforts to inform potential customers and the public of the existence and perceived benefits of these products and services. In addition, governmental funding may be needed to help complete development, obtain required regulatory approvals, clearances or EUAs and create market acceptance and expand the use of these products and services.
There may be limited evidence on which to evaluate the market reaction to products and services that may be developed and the Company's marketing efforts for new products and services or products with new uses may not be successful. The market for microbiome products and services is in its early stages and its future development and acceptance by the Company's customers is uncertain. Also, the Company continues to develop and seek 510(k) regulatory clearance for the InteliSwab tests, and it is uncertain whether it will be successful in the development and validation efforts or whether these products will prove effective, receive applicable regulatory approvals and gain widespread acceptance in the marketplace. As such, there can be no assurance that any products or services will obtain significant market acceptance and fill the market need that is perceived to exist on a timely basis, or at all. It is possible that the Company's expenses to develop and market any such products, including, without limitation the Company's InteliSwab tests, will exceed any benefit in revenues, which may be short-lived. In addition, other products that compete with the Company's may achieve 510(k) clearance earlier than the Company's do, providing market advantages.
Sales & Marketing - Risk 3
The Company's Product Sales Cycles Can be Lengthy, and May Depend on Public Funding, Which Can Cause Variability and Unpredictability in the Company's Operating Results.The sales cycles for certain of the Company's products can be lengthy and unpredictable, which makes it more difficult to accurately forecast revenues in a given period and may cause revenues and operating results to vary from period to period. Sales of the Company's products often involve purchasing decisions by large public and private institutions, may require many levels of approval and may be dependent on economic or political conditions and the availability of grants or funding from governmental or public health agencies which can vary from period to period in both amount and timing. For example, in past years the Company's OraQuick ADVANCE HIV-1/2 test has been purchased through bulk procurement or other funding provided by governmental agencies. The Company's OraQuick HCV test has been purchased by customers who receive government funding, and the Company believes increased funding from government agencies will be required to substantially increase the volume of HCV testing, especially in the public health market. There can be no assurance that purchases or funding from these agencies will occur or continue. In addition, government funding is subject to the political process, which is inherently fluid and unpredictable. For example, the National Institutes of Health ("NIH") announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect costs. While, as of the date of this filing, the order has been temporarily stayed, there can be no assurance that it will not take effect or that other adverse actions will not be taken. Further, our revenue may be adversely affected if our clients delay purchases as a result of uncertainties surrounding the approval of government budget proposals, including reduced allocations to government agencies. In addition, government funding is subject to the political process, which is inherently fluid and unpredictable. As a result, the Company may expend considerable resources on unsuccessful sales efforts or it may not be able to complete transactions at all or on a schedule and in an amount consistent with its objectives or previous order patterns.
Production
Total Risks: 6/67 (9%)Below Sector Average
Manufacturing3 | 4.5%
Manufacturing - Risk 1
Performance of the Company's Products May Affect Its Revenues, Stock Price and Reputation.Manufacturing - Risk 2
The Company's Business Will Suffer if It Does Not Effectively Manage Challenges to Its Manufacturing Processes and It May be Unable to Successfully Scale-Up Manufacturing of Its Products in Sufficient Quality and Quantity to Meet Demand, Which Would Negatively Impact Revenue Expectations.In the event of a sudden and significant increase in demand for the Company's products, challenges in the manufacture of products could adversely affect, the Company's operating efficiency and results of operations. Although the Company has expanded its manufacturing capacity, the Company faces risks, including with respect to expanding its overall production capacity, that could increase costs, divert management attention and reduce the Company's operating results, with no guarantee of success.
As the Company increases its manufacturing capacity to meet market demand or begin to manufacture new products at scale, it may face unanticipated manufacturing challenges as production volumes increase, new processes are implemented and new supplies of raw materials used in these products are secured. In addition, the Company could experience delays in production as it increases manufacturing capacity or begins to manufacture new products that may result in its inability to meet product demand as the products ordered by its customers being on back-order as initial production issues are addressed. If it experiences production delays or inefficiencies, a deterioration in the quality of the Company's products or other complications in managing changes to its manufacturing processes, including those that are designed to increase capacity, enhance efficiencies and reduce costs or that relate to new products or technologies, the Company may not achieve the benefits that it anticipates from these actions when expected, or at all, and the Company's operations could experience disruptions, the Company's manufacturing efficiency could suffer and the Company's business, financial condition and results of operations could be materially and adversely affected. Any such delays could allow the Company's competitors to seize market advantage, which could have a material, adverse effect on the Company's reputation, revenues, results of operations, cash flow and financial position.
Manufacturing - Risk 3
The Company's Inability to Manufacture Products in Accordance with Applicable Specifications, Performance Standards or Quality Requirements Could Adversely Affect Its Business.The materials and processes used to manufacture the Company's products must meet detailed specifications, performance standards and quality requirements to ensure its products will perform in accordance with their label claims, customers' expectations and applicable regulatory requirements. As a result, the Company's products and the materials used in their manufacture or assembly undergo regular inspections and quality testing. Factors such as defective materials or processes, mechanical failures, human errors, environmental conditions, changes in materials or production methods, and other events or conditions could cause the Company's products or the materials used to produce or assemble its products to fail inspections and quality testing or otherwise not perform in accordance with their label claims or the expectations of the Company's customers.
In February 2024, the FDA issued the Quality Management System Regulation (QMSR) Final Rule to amend the QSR, incorporating by reference the international standard for medical device quality management systems set by the
International Organization for Standardization (ISO), ISO 13485:2016. The rule will become effective on February 2, 2026. Until then, manufacturers are required to comply with the QSR. We believe that our facilities and procedures are in material compliance with the FDA's QSR requirements, the European Union's Quality Management Systems requirements, ISO 13485:2016, but the regulations are subject to change or may be unclear, and we cannot be sure that FDA investigators will agree with our compliance with the FDA's post-market requirements.
Any failure or delay in the Company's ability to meet the applicable specifications, performance standards, quality requirements or customer expectations could adversely affect its ability to manufacture and sell its products or comply with regulatory requirements. These events could, in turn, adversely affect the Company's revenues and results of operations.
Employment / Personnel1 | 1.5%
Employment / Personnel - Risk 1
If the Company Loses Key Personnel or Is Unable to Attract and Retain Qualified Personnel as Necessary, Its Business Could be Harmed.Supply Chain2 | 3.0%
Supply Chain - Risk 1
Certain of the Company's Products Depend on Components From a Sole-Source Supplier, the Loss of Which Would Cause the Company to be Unable to Deliver Such Products.Supply Chain - Risk 2
The Company's Business Results Depend on Its Ability to Manage Disruptions in Its Domestic and Global Supply Chains and Distribution Channels.The Company's ability to meet its customers' needs and achieve its financial objectives depends on its ability to maintain key manufacturing, supply and distribution arrangements. The loss or disruption of such manufacturing and supply arrangements could, in the future, interrupt the Company's ability to obtain necessary raw materials and manufacture its products. Such disruptions could result from labor disputes, financial liquidity, natural disasters, extreme weather conditions, public health emergencies and pandemics, supply constraints and general economic and political conditions that could limit the ability of the Company's suppliers to timely provide it with raw materials and components and distribute its products in a timely manner in accordance with applicable quality requirements. Disruptions in the global supply chain could also delay or preclude the ability of the Company's distributors to sell and deliver its products to customers.
The availability and price of these materials, parts, products and services are affected by a variety of factors beyond the Company's control, including the willingness of suppliers to sell into the medical device industry, changes in supply and demand, general economic conditions, labor costs, fuel-related transportation costs, liability concerns, climate change (including new and existing laws and regulations to address climate change), competition, import duties, tariffs, currency exchange rates, inflationary pressures and political uncertainty around the world. Recently, the United States and certain other countries from which we import materials have imposed or signaled a willingness to impose tariffs on goods coming into the United States and elsewhere. While we cannot be certain how this will impact our supply chain, the Company's suppliers often pass some of their cost increases on to it, and if such increased costs are sustained or increase further, its suppliers may pass further cost increases on to it. In addition, transportation costs have generally increased and may further increase if crude oil prices increase. The Company's transportation and service providers are typically able to pass any significant increases in oil prices on to it. The Company's costs may also be impacted by laws to increase minimum wages,including the potential increase to the federal minimum wage in the United States that has been recently proposed by the current administration.
The Company's ability to recover such increased costs may depend upon its ability to raise prices on its products. Due to the highly competitive nature of the healthcare industry and the cost-containment efforts of the Company's customers and third-party payers, the Company may be unable to pass along cost increases through higher prices. If the Company is unable to fully recover these costs through price increases or offset these increases through cost reductions, or it experiences terminations or interruption of its relationships with its suppliers, it could experience lower margins and profitability, and the Company's results of operations, financial condition and cash flows could be materially harmed.
In recent years, the global supply chain has experienced significant disruptions, resulting in shortages of labor and equipment. These conditions, if not mitigated or remedied in a timely manner, could delay or preclude delivery of raw materials needed to manufacture the Company's products or delivery of the Company's products to customers, particularly in international markets. This in turn could have an adverse impact on the Company's business, financial condition, results of operations or cash flows.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.