What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-02-23 · 177 added, 156 removed, 456 unchanged (42% of the section changed)

All references to “the Company,” “we,” “our” and “us” in this Annual Report refer to QuidelOrtho Corporation (“QuidelOrtho”) and its subsidiaries.

References to “fiscal year 2022” in this Annual Report refer to the Company’s fiscal year ended January 1, 2023.

Our mission is to develop and manufacture intelligent diagnostic solutions that transform the power of diagnostics into a healthier future for everyone.

Our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine helps clinicians and patients make better informed decisions across the globe.

References to “fiscal year 2023” in this Annual Report refer to the Company’s fiscal year ended December 31, 2023.

Our vision is to advance diagnostics to power a healthier future.

With our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, we aim to provide clarity to clinicians and patients to help create better health outcomes.

Our global infrastructure and commercial reach support our customers across more than 130 countries and territories with quality diagnostics, a broad test portfolio and market-leading service.

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We currently sell our products directly to end users through a direct sales force and through a network of distributors, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, urgent care clinics, leading universities, retail clinics, pharmacies, wellness screening centers, other point-of-care (“POC”) settings, blood banks and donor centers, as well as for individual, non-professional, over-the-counter (“OTC”) use.

We reached significant new markets as we introduced our QuickVue ® At-Home OTC COVID-19 test for at-home consumer use, school districts, health departments and many other locations.

We reached new markets as we introduced our QuickVue ® At-Home OTC COVID-19 test for at-home consumer use, school districts, health departments and many other locations.

On May 27, 2022, pursuant to a Business Combination Agreement entered into as of December 22, 2021 (the “BCA”), by and among Quidel Corporation (“Quidel”), Ortho Clinical Diagnostics Holdings plc (“Ortho”), QuidelOrtho (formerly Coronado Topco, Inc.), Orca Holdco, Inc., Laguna Merger Sub, Inc.

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The High Court of Justice of England and Wales (the “Court”) sanctioned the Ortho Scheme on May 26, 2022 and a sealed order of the Court was delivered to the Registrar of Companies at Companies House on May 27, 2022, satisfying the final condition to closing of the Combinations.

Beginning in the second quarter of 2022, in connection with the Combinations and in order to manage our business to better align with the market dynamics of the specific geographic regions in which we operate, we changed the manner in which we review our performance and allocate resources.

As a result, we changed from one reportable segment to the following three geographically-based reportable segments:

North America;

Europe, the Middle East and Africa (“EMEA”);

For additional information about the Combinations, refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 2.

Business Combination.”

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate, with our reportable segments being North America, Europe, the Middle East and Africa (“EMEA”), and China.

Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” We generate our revenue primarily in the following business units:

Labs, Transfusion Medicine, Point of Care and Molecular Diagnostics.

Information concerning revenues attributable to our reportable segments and business units is set forth in Note 4 and Note 5 to the Consolidated Financial Statements.

Information concerning revenues attributable to our reportable segments and business units is set forth in Part II, Item 8, “Financial Statements and Supplementary Data—Note 4.

Revenue” and “Financial Statements and Supplementary Data—Note 5.

Segment and Geographic Information.”

Business Units and Products

In connection with the Combinations, we reorganized our former product categories into four business units.

Revenues from our former Specialized Diagnostic Solutions product category have been included in a new Labs business unit described below.

Our former Rapid Immunoassay and Cardiometabolic Immunoassay product categories now represent our Point of Care business unit.

The Molecular Diagnostics business unit represents the former Molecular Diagnostic Solutions product category.

In addition, we added a Transfusion Medicine business unit.

We provide diagnostic testing solutions under various brand names, including, among others, the following:

AdenoPlus ™ , BIOVUE ® , D3 ® , ELVIRA ® , ELVIS ® , FastPoint ® , FreshCells ™ , InflammaDry ® , Lyra ® , MicroVue ™ , Ortho ® , Ortho Clinical Diagnostics ® , Ortho Vision ™ , Quidel ® , QuickVue, QuickVue+ ® , QVue ™ , ReadyCells ® , Savanna ® , Sofia ® , Solana ® , Thyretain ® , Triage ® , Virena ® and Vitros ® .

Solely for convenience, in some cases, the trademarks, service marks and trade names referred to in this Annual Report are listed without the applicable ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.

Following the Combinations, we generate product revenue in the following business units:

AdenoPlus ™ , BIOVUE ® , FreshCells ™ , InflammaDry ® , Lyra ® , MeterPro ® , MicroVue ™ , Ortho ® , Ortho Clinical Diagnostics ® , Ortho Connect ™ , Ortho Plus ® , Ortho Vision ® , QuickVue, Quidel ® , QuidelOrtho ™ , QVue ™ , Savanna ® , Sofia ® , Solana ® , Thyretain ® , Triage ® , Virena ® and Vitros ® .

Solely for convenience, in some cases, the trademarks, service marks and trade names referred to in this Annual Report are listed without the applicable ® and ™ symbols, but we intend to enforce our rights to these trademarks, service marks and trade names.

We generate product revenue in the following business units:

Business Unit Focus

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Sample-to-result molecular instruments and tests for syndromic infectious disease diagnostics

Point of Care Instruments and tests to provide rapid results across a broad continuum of POC settings, including tests for professional healthcare providers and tests that can be taken at home

Point of Care Instruments and tests to provide rapid results across a broad continuum of POC settings, including tests for professional healthcare providers and tests that can be performed at home

Tests that are run on a range of portable, POC analyzers

Tests that are visually read

Transfusion Medicine Immunohematology instruments and tests used for blood typing and antibody identification to help ensure patient-donor compatibility in blood transfusions

Transfusion Medicine Immunohematology instruments and tests used for blood typing and antibody identification to help confirm patient-donor compatibility in blood transfusions

Donor screening instruments and tests used for blood and plasma screening for infectious diseases for global customers

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Vitros Platform Seven clinical chemistry, immunoassay and integrated (combined chemistry and immunoassay) systems for use in centralized, higher-throughput (hospitals and laboratories) and decentralized, lower-throughput (physician offices, clinics and specialty settings) testing sites

XT Platform VITROS XT 7600 integrated system and VITROS XT 3400 clinical chemistry analyzer for use with new XT chemistry slides, combining two tests that are frequently used together, offering advancements over prior generations:

XT Platform Vitros XT 7600 integrated system and Vitros XT 3400 clinical chemistry analyzer for use with new XT chemistry slides, combining pairs of tests that are frequently used together onto single slides, offering advancements over prior generations:

• 40% greater test throughput when using XT slides;

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• designed to offer high reliability with a 98% up-time guarantee for e-connected U.S.

Vitros Results Management Advanced informatics software product designed for laboratories of all sizes.

It is focused on automating a number of repetitive manual tasks such as sample auto-validation, quality control management, moving averages, STAT sample management, sample archiving, and the development and deployment of advanced rules to help laboratories easily manage their patient populations

Vitros Automation Solutions A flexible and scalable track-based system that combines Vitros analyzers with a number of robotic modules to help laboratories enhance their operations by reducing or eliminating repetitive and redundant laboratory tasks and the total number of human interventions required to complete typical laboratory testing

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Lyra Open platform, real-time PCR assays for high throughput, high quality molecular testing to detect and identify infectious diseases, offering room-temperature storage, reduced processing time, and ready-to-use reagent configurations

Solana Simplified molecular testing platform using our proprietary isothermal helicase-dependent amplification (“HDA”) technology that is easy to run and can process 12 patient samples at the same time

Savanna CE-marked, multiplex, real-time PCR platform, with customizable flexible syndromic panels that run up to 12 unique analytes from a single patient sample in less than 25 minutes

Solana Simplified molecular testing platform using our proprietary isothermal helicase-dependent amplification technology that is easy to run and can process 12 patient samples at the same time

Savanna CE-marked, 510(k) approved, multiplex, real-time PCR platform, with customizable flexible syndromic panels that run up to 12 unique analytes from a single patient sample in less than 25 minutes

Savanna RVP4 assay offers simultaneous qualitative detection and differentiation of influenza A, influenza B, respiratory syncytial virus (“RSV”), and SARS-CoV-2 RNA isolated from human nasal or nasopharyngeal swabs

Adenovirus, Bordetella, Clostridium Difficile (organism), HSV 1+2/VZV, Influenza A+B, Parainfluenza Virus, RSV, Respiratory Viral Panel (Flu A+B, RSV, hMPV), Respiratory Viral Panel 4 (Flu A+B), SARS-CoV-2, Strep A, Strep B, Strep Complete, Trichomonas

Respiratory Adenovirus, Bordetella Pertussis, Influenza A+B, Parainfluenza Virus, RSV, Respiratory Viral Panel (Flu A+B, RSV, hMPV), Respiratory Viral Panel 4 (Flu A+B), SARS-CoV-2, Strep A, Strep Complete

Non-respiratory Clostridium Difficile (organism), HSV 1+2/VZV, Group Strep B, Trichomonas

POINT OF CARE

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Rapid Immunoassay

Sofia, Sofia 2

and Sofia Q Easy-to-use, rapid testing using lateral-flow technology and advanced fluorescent immunoassay (“FIA”) chemistry

Sofia and Sofia 2 Easy-to-use, rapid testing using lateral-flow technology and advanced fluorescent immunoassay (“FIA”) chemistry

Combines unique software and Sofia FIA tests to yield automatic, objective results that are readily available on the instrument’s screen, in a hard-copy printout and in a transmissible electronic form that can network via a lab information system to hospital and medical center databases

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Sofia 2 systems include additional benefits and features, such as enhanced optics for improved performance and speed, at a cost point that better addresses the lower-volume segment of the diagnostic testing market

Emergency use authorization (“EUA”) to market Sofia Q platform that offers similar features and benefits as the other Sofia analyzers in a smaller and less expensive format

QuickVue Broad portfolio of rapid, visually read, lateral flow immunoassay products to diagnose a wide variety of infectious diseases and medical conditions, including the QuickVue At-Home OTC COVID-19 test, a leading at-home COVID-19 product available through many retail and online outlets

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Triage MeterPro Portable, rapid testing platform offering a comprehensive menu of tests for diagnosis of critical diseases and health conditions, as well as the detection of certain drugs of abuse

Aids in the diagnosis, assessment and risk stratification of patients having critical care issues, including congestive heart failure, acute coronary syndromes and acute myocardial infarction, and can reduce hospital admissions and improve clinical and economic outcomes

Aids in the diagnosis, assessment and risk stratification of patients having critical care issues, including congestive heart failure, acute coronary syndromes and acute myocardial infarction, which may reduce hospital admissions and potentially improve clinical and economic outcomes

Triage B-type Natriuretic Peptide (“BNP”) test for use on Beckman Coulter (“Beckman”) lab analyzers (“BNP Business”) in connection with the transition of the BNP Business to Beckman

Cardiac BNP, Creatine Kinase-MB, D-Dimer, hsTroponin, Myoglobin, Troponin I ES

Cardiac BNP, NT-proBNP, Creatine Kinase-MB, D-Dimer, hsTroponin, Myoglobin, Troponin I ES

Drugs of Abuse Amphetamines, Barbiturates, Benzodiazepines, Cocaine, Methadone Metabolite (EDDP), Methamphetamines, Opiates, PCP, THC/Cannabinoids, Tricyclic Antidepressants

Eye Health Acute Conjunctivitis, MMP-9 (a key inflammatory marker for dry eye)

Infectious Diseases Adenoviral Conjunctivitis, Anti-SARS-CoV-2 IgG, Campylobacter, Chlamydia, Clostridium Difficile (organism), H.

Respiratory Infectious Diseases Anti-SARS-CoV-2 IgG, Influenza A+B, Influenza A+B & SARS-CoV-2 Ag, RSV, Strep A

Non-respiratory Infectious Diseases Adenoviral Conjunctivitis, Campylobacter, Chlamydia, Clostridium Difficile (organism), H.

pylori Ab, H.

pylori Ab (stool), Influenza A+B, Influenza A+B & SARS-CoV-2 Ag, Legionella, Lyme Disease, RSV, S.

pneumoniae, Strep A

pylori Ab (stool), Legionella, Lyme Disease, S.

Inflammatory Lactoferrin

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Donor Testing Serology Comprehensive set of infectious disease screens, including important tests for tropical diseases like Chagas that are critical for care in emerging markets

Services and Informatics

In addition to the products we provide, our services and informatics are a critical element of how we deliver value to our customers.

As of January 1, 2023, we had approximately 1,000 service teammates globally.

Global Services

In addition to the products we provide, our services are a critical element of how we deliver value to our customers.

As of December 31, 2023, we had approximately 1,000 service teammates globally.

We employ highly trained service professionals, including laboratory specialists with advanced qualifications.

Our highly valued suite of ORTHOCARE service offerings includes:

Our highly valued suite of solutions include:

• Guarantee 98% up-time to our e-connected U.S.

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• E-CONNECTIVITY Remote Monitoring Software−More than 80% of our installed base of Vitros 5600, XT 7600 and ORTHO VISION platforms are e-connected, enabling remote monitoring and improved analyzer availability.

• Laboratory Informatics−Solutions designed to deliver incremental value to the laboratory, including inventory planning, laboratory productivity metrics and technical documentation.

• ValuMetrix−A highly valued consulting service proven to increase laboratory workflow, productivity and laboratory service levels utilizing lean principles and process excellence.

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• Global Technical Solution Center−Seven technical solution centers delivering first-line support in over 15 languages, meaning we can resolve service issues remotely without an on-site visit approximately two-thirds of the time.

• Smart Service Mobile App−First-in-class technology enabled on iPhone and Android devices that allows our service teams to receive up-to-date analyzer health checks, proactive alerts and performance monitoring to help ensure the highest level of reliability is achieved.

• Training and Education−Flexible educational resources for the lifetime of the customer relationship, including virtual technical training, continuing education and professional development.

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This allows both parties to see the same thing at the same time and provide guided instruction leading to better and faster fix rates.

• Aquant AI−A field-based machine fed tool used to troubleshoot instrument issues with standardized solutions.

We also provide our Virena wireless cellular data management and surveillance system that operates as a cloud-based solution connecting Sofia and Solana instruments across a healthcare system and automatically transmitting de-identified test results to a secure database.

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Digital Solutions and Innovation

We are developing a growing portfolio of digital and data solutions, which we believe improve our customers’ clinical and operational outcomes.

Our focus is on enabling our customers to deliver smart, connected care across various clinical environments.

We strive to turn our instruments into data assets for healthcare providers, labs and policymakers through proprietary and third-party connectivity solutions, such as laboratory information systems and middleware partnerships and connectivity to our information systems.

Building on this interoperability, we offer a number of solutions to simplify and automate the testing and instrument management process, including ORTHO Connect, Ortho Plus and Virena.

We also plan to develop other digital solutions that turn test results into specific clinical insights and actions via physician or patient facing solutions, such as the QVue mobile application for COVID-19 at-home testing.

We are building our enterprise digital product strategy, platform and portfolio, which we believe helps improve our customers’ clinical and operational outcomes.

Our focus is on enabling our customers to deliver smart, connected care across a variety of clinical environments.

We strive to connect our instruments to healthcare providers, labs and policymakers through proprietary and third-party solutions, creating valuable data assets.

Our portfolio of workflow automation solutions, such as Ortho Connect, Ortho Plus and myVirena, help simplify the testing and instrument management process.

We are also actively developing other products designed to help personalize and elevate individual test results, such as the QVue companion mobile application for our COVID-19 at-home tests, potentially resulting in specific clinical insights or actions.

Our Strategic Capabilities and Competitive Strengths

There is significant competition in the development and marketing of IVD products, and innovation, product development, regulatory clearance to market and commercial introduction of new IVD technologies can occur rapidly.

There is significant competition in the development and marketing of in vitro diagnostic (“IVD”) products, and innovation, product development, regulatory clearance to market and commercial introduction of new IVD technologies can occur rapidly.

We believe that some of the most significant competitive factors in the rapid diagnostic market include convenience, speed to result, specimen flexibility, product menu, clinical needs, price, reimbursement levels, product performance and customer service, as well as effective distribution, advertising, promotion and brand recognition.

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There are several global companies with whom we compete, as well as regional and local companies focused on particular markets and/or technologies.

Our principal competitors include, among others, Abbott Laboratories, Thermo Fisher Scientific, Danaher, Siemens Healthineers, Diasorin, Bio-Rad, Hologic, Qiagen, bioMérieux and PerkinElmer.

Some of our principal competitors include, among others, Abbott Laboratories, Roche, Thermo Fisher Scientific, Danaher, Siemens Healthineers, Diasorin, Bio-Rad, Hologic, Qiagen, bioMérieux and Revitty.

Some of these competitors have substantially greater financial, marketing and other resources than we have.

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Over our more than 80 years supporting the IVD testing needs of our customers, we have developed deep and enduring relationships with our customers.

Our ORTHOCARE service program allows us to retain and grow our customer base by providing an industry-leading customer experience driven by quality of service, continuous innovation and access to a diverse product portfolio.

Our service program allows us to retain and grow our customer base by providing an industry-leading customer experience driven by quality of service, innovation and access to a diverse product portfolio.

Innovation and research and development (“R&D”) capabilities that address unmet needs in new and existing market segments.

We intend to continue to invest in the next generation of instrumentation for each of our business units while keeping abreast of emerging technologies and use-cases, some of which may lead to new business units or revenue streams.

We intend to invest in the next generation of instrumentation for each of our business units while keeping abreast of emerging technologies and use-cases, some of which may lead to new business units or revenue streams.

Our key strengths include new assay format development, new instrument systems development and the complex integration of the two.

In addition, to create new opportunities, manage costs and adapt to a rapidly changing industry, we also enter into strategic partnerships as part of our R&D process.

Operational scale driven by recent investments in U.S.

In addition, to create new opportunities, manage costs and adapt to a rapidly changing industry, we may also enter into strategic partnerships as part of our R&D process.

Operational scale driven by investments in U.S.

manufacturing capabilities and an extensive and balanced global commercial footprint across more than 130 countries.

We leverage our global footprint of approximately 2,900 commercial sales, service and regional marketing teammates to facilitate successful delivery of innovative solutions to meet our customers’ needs in both developed and emerging markets.

Leadership team dedicated to preserving a culture of employee focus and happiness.

Leadership team dedicated to preserving a culture of continuous improvement and employee happiness.

We understand that our success relies upon the talent and dedication of our employees.

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We strive to build meaningful connections with each other as we believe that employee happiness and business success are symbiotic.

Business Strategy

We are driven to transform diagnostics into action for more people in more places.

We strive to achieve this by serving several market segments throughout the healthcare continuum, from large labs to physicians’ offices.

While these care settings have historically been distinct and unrelated, healthcare is consolidating.

This consolidation translates into community systems consisting of labs, hospitals, physicians’ offices and urgent care clinics.

Success in one care setting creates new sales opportunities in another care setting within the same system.

As we look to the future, we see many opportunities for continued growth.

In the short term, our strategy is to invest in R&D to offer a broader test menu to more settings for more patients.

In the short term, our strategy is to invest in R&D to offer a broader test menu to more care settings for more patients.

Both routine and novel tests are important for leveraging our large and growing installed base of instruments in both laboratories and POC settings.

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Given the rapid pace of change and deep expertise needed within some of these areas, we expect to leverage third-party partnerships and acquisitions to reduce some of the technical and commercial risks and potentially increase our speed to market with innovative offerings.

As a result of the Combinations, we have increased leverage, cash and optionality.

We intend to use a portion of such cash for additional R&D investments.

We may also pursue potential business development opportunities, partnerships and acquisitions to support our strategic initiatives.

We intend to pursue strategic opportunities that could result in new and relevant technologies and capabilities, or accelerate our commercial growth in attractive end-markets and geographies.

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Our R&D team is comprised of a balanced mix of experienced professionals with years of experience in the diagnostics industry and recently trained technologists, and together, they have know-how and technical capabilities in key areas, such as biomedical science, information technology (“IT”) and engineering.

Key strengths of our team include new assay format development, new

instrument systems development and the complex integration of the two.

Key strengths of our team include new assay format development, new instrument systems development and the complex integration of the two.

In addition, in order to create new opportunities, manage costs and adapt to a rapidly changing industry, we also plan to enter into strategic partnerships as part of our R&D process.

R&D expenses were $190.5 million for fiscal year 2022, which includes the impact of Ortho’s operations from the date of the Combinations.

R&D expenses were $95.7 million, and $84.3 million for fiscal years 2021 and 2020, respectively.

R&D expenses were $246.8 million for fiscal year 2023, $190.5 million for fiscal year 2022, which includes the impact of Ortho’s operations from the date of the Combinations, and $95.7 million for fiscal year 2021.

We anticipate significant investment of our financial resources to product and technology R&D in the foreseeable future.

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Our current business strategy is designed to serve the continuum of healthcare delivery needs globally, from POC clinicians located in doctor’s office practices, to moderately complex POLs, and to highly complex hospitals, laboratories and blood and plasma centers.

We are also increasingly prioritizing retail and online outlets, such as large pharmacies, to market and distribute our QuickVue At-Home OTC COVID-19 tests.

We are also increasingly prioritizing retail and online outlets, such as large pharmacies, to market and distribute our QuickVue At-Home OTC COVID-19 tests and other respiratory products.

Within the inherent operational diversity of these various segments, we focus on differentiating ourselves and enhancing our market leadership by specializing in the diagnosis and monitoring of select disease states, conditions and wellness categories.

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Our global team strives to deliver best-in-class customer service and support by surrounding our customers with devoted and experienced professionals.

Our call center team and laboratory specialists serve as the first line of contact for our customers and are available to provide customer training and ongoing customer support.

Our call center team and field application specialists serve as the first line of contact for our customers and are available to provide customer training and ongoing customer support.

In addition, our network of field engineers is responsible for installing our instruments and providing onsite customer support if necessary.

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We derive a significant portion of our total revenues from a few customers and distributors.

Two of our customers, including one of our distributors, which is considered to be among the market leaders, exceeded 10% of our total revenues for fiscal year 2022.

In fiscal year 2021, one distributor exceeded 10% of our total revenues.

In fiscal year 2020, four of our distributors exceeded 10% of our total revenues.

See Note 4 to the Consolidated Financial Statements.

No customer individually accounted for more than 10% of our Total revenues for fiscal year 2023.

See Part II, Item 8, “Financial Statements and Supplementary Data—Note 4.

Revenue” for more information.

Manufacturing

Our manufacturing operations benefit from our broad global footprint, scale and workforce capabilities.

We believe our plant capacity and available space are sufficient to accommodate growth, maintain quality and help ensure continuity.

Our primary manufacturing facilities are located in San Diego, California, Carlsbad, California, Athens, Ohio, Raritan, New Jersey, Rochester, New York, Pompano Beach, Florida, Pencoed, Wales and Galway, Ireland.

We believe our plant capacity and available space are sufficient to accommodate growth, maintain quality and support continuity.

manufacturing facilities are located in San Diego, California, Carlsbad, California, Athens, Ohio, Raritan, New Jersey, Rochester, New York, Pompano Beach, Florida, and Pencoed, Wales.

Our McKellar Court, San Diego, California and our Carlsbad, California lateral flow manufacturing facilities consist of laboratories devoted to tissue culture, cell culture, protein purification or immunochemistry, and production areas dedicated to manufacturing and assembly.

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Our Summers Ridge, San Diego, California facility consists of laboratories that are involved in mammalian cell culture, bacterial fermentation, protein purification and modification, as well as other techniques involved in immunoassay reagent manufacturing.

These reagents are used in the manufacture of devices made at this facility and some are also supplied to Beckman as key active ingredients for BNP products that run on Beckman analyzers.

In addition, this facility has production areas dedicated to creating and processing plastic components that are subsequently transformed into finished devices (cardiac and drugs of abuse products) using customized manufacturing equipment, including specialized automation.

This facility has production areas dedicated to creating and processing plastic components that are subsequently transformed into finished devices (cardiac and drugs of abuse products) using customized manufacturing equipment, including specialized automation.

This facility is certified to ISO 13485:2016 and MDSAP medical device standards.

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Packaging, warehousing and shipping logistics with cold chain storage capability are handled at this facility.

Our Raritan, New Jersey facility manufactures our in vitro diagnostic donor screening and immunohematology products that are distributed globally.

Our Raritan, New Jersey facility manufactures our IVD donor screening and immunohematology products that are distributed globally.

Manufacturing processes consist of formulation, filtration, filling, labeling, chemistry analysis, serological and microbial testing, as well as packaging.

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Warehousing, direct shipping and shipping logistics with cold chain storage capability are handled at this facility with products transported to our distribution facilities for onward handling to end customers.

Our Rochester, New York facility consists of three sites for slide manufacturing, fluid manufacturing and CNP equipment manufacturing.

This facility manufactures the slides and fluids used for clinical diagnostic assays run on our VITROS analyzers.

Our Rochester, New York facility consists of three sites for slide manufacturing, fluid manufacturing and CNP microwell and equipment manufacturing.

The Rochester sites manufacture the slides, microwells and fluids used for clinical diagnostic assays run on our Vitros analyzers.

Manufacturing capabilities include formulation, lyophilization, filling, coating, slitting, custom featuring, assembly and packaging, all under cGMPs.

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Warehousing and shipping logistics with cold chain storage capability are handled at this facility with products transported to our distribution facilities for onward handling to end customers.

Our Galway, Ireland facility manufactures in vitro diagnostic test kits.

This facility also provides sales and technical support and warehouses and distributes products from many of our manufacturing locations into the EMEA markets.

This facility operates under and is certified to ISO 13485:2016.

We seek to conduct our manufacturing in compliance with QMS regulatory requirements of the U.S., Australia, Brazil, Canada, Japan, Europe, South Korea and certain other countries.

Our manufacturing facilities have passed routine regulatory inspections confirming compliance with the QMS regulatory requirements.

We aim to conduct our manufacturing in compliance with QMS regulatory requirements of the U.S., Australia, Brazil, Canada, Japan, Europe, South Korea and certain other countries.

Our manufacturing facilities have passed routine regulatory inspections

confirming compliance with the QMS regulatory requirements.

Our facilities are registered with various regulatory bodies, including the FDA and other international and local public health and regulatory agencies.

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Some of our raw materials are available from a limited number of sources.

During 2022, we encountered some increasing pressures on raw material pricing.

During fiscal years 2023 and 2022, we encountered some increasing pressures on raw material pricing, though they were less severe in fiscal year 2023 than in 2022.

To help mitigate these supply chain challenges, we are (i) partnering with suppliers to invest in additional capacity and raw material inventory, (ii) diversifying our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components and (iii) creating redundancy in our global supply chain.

In addition, we routinely evaluate our supply chain for potential gaps and continue to take other steps intended to help address continuity.

For more information related to our supply chain, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of the COVID-19 Pandemic—Supply Chains,” Part I, Item 1A, “Risk Factors—Risks Relating to Our Business, Strategy and Operations—The COVID-19 global pandemic has adversely affected, and may continue to adversely affect, our business operations, strategy, financial performance and results of operations, the extent of which is uncertain and difficult to predict” and Part I, Item 1A, “Risk Factors—Risks Relating to Our Business, Strategy and Operations—Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results.”

For more information related to our supply chain, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supply Chains” and Part I, Item 1A, “Risk Factors—Risks Relating to Our Business, Strategy and Operations—Interruptions and delays in the supply of raw materials, components, equipment and other products and services could adversely affect our operations and financial results.”

Collaboration Arrangements

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Today, the most significant benefit to us under the Grifols Agreement is the manufacture and sale by us of HIV and Hepatitis tests, which are solely performed by us.

During the fiscal year ended January 1, 2023, the revenue associated with the use of this patented intellectual property was less than 1% of our total revenues and the expense associated with the antigens supplied to us by Grifols was less than 2% of our cost of goods sold.

During the fiscal year ended December 31, 2023, the revenue associated with the use of this patented intellectual property was less than 1% of our total revenues and the expense associated with the antigens supplied to us by Grifols was less than 2% of our cost of goods sold.

The initial 50-year term of the Grifols Agreement will expire on December 31, 2039, at which time it will automatically renew for successive five-year periods unless either party has notified the other at least five years in advance of such date that it wishes to terminate the Grifols Agreement.

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The Grifols Agreement may also be terminated by the non-breaching party if there is a breach or default of the agreement which is not cured during a 60-day cure period.

Sales of our respiratory products are subject to, and significantly affected by, the seasonal demands of the cold and flu seasons, typically prevalent during the fall and winter.

Historically, sales of our influenza products have varied from year to year in

volume and timing based, in large part, on the severity, length and timing of the onset of the cold and flu season.

Revenues from our respiratory products are subject to, and significantly affected by, the seasonal demands of the cold, flu and RSV seasons, which are typically more prevalent during the fall and winter.

Historically, revenues from our influenza products have varied from year to year based, in large part, on the severity, length and timing of the onset of the cold, flu and RSV seasons.

In addition, the SARS-CoV-2 virus may have similar seasonal demands and impacts on our revenues in the future.

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Pursuant to the U.S.

Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the regulations promulgated thereunder, the FDA regulates the preclinical and clinical testing, manufacture, labeling, distribution and promotion of medical devices.

Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the regulations promulgated

thereunder, the FDA regulates the preclinical and clinical testing, manufacture, labeling, distribution and promotion of medical devices.

In the U.S., medical devices are classified into one of three classes (Class I, II or III) depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness.

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Class III devices generally pose the highest risks, such as life sustaining, life supporting or some implantable devices, and are typically subject to premarket approval to ensure their safety and effectiveness.

Our current products are all Class I or II.

Our current products are generally Class I or II.

Certain of our Vitros immunodiagnostics are Class III.

While most Class I devices are exempt from the premarket notification requirement under Section 510(k) of the FDCA (“510(k)”), manufacturers of most Class II devices are required to submit to the FDA a premarket notification under 510(k) requesting permission to commercially distribute the device.

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Class III devices require approval of a PMA application evidencing safety and effectiveness of the device.

Data and content requirements for premarket submissions, including 510(k) notifications and PMAs, can change over time.

For example, beginning in March 2023, premarket submissions for “cyber devices” must contain certain information about device cybersecurity.

“Cyber devices” encompass any device that:

(1) includes software validated, installed or authorized by the sponsor as a device or in a device;

(2) has the ability to connect to the internet;

and (3) contains any technological characteristics validated, installed or authorized by the sponsor that could be vulnerable to cybersecurity threats.

We currently market the majority of our diagnostic products in the U.S.

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Department of Health and Human Services (“HHS”) has made a declaration of emergency justifying authorization of emergency use.

An EUA allows use in an emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions caused by emerging infectious disease threats when there are no adequate, approved and available alternatives.

The FDA may also waive otherwise applicable cGMPs requirements to accommodate emergency response needs.

An EUA allows use in a public health emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions caused by emerging infectious disease threats when there are no adequate, approved and available alternatives.

The FDA may also waive otherwise applicable cGMP requirements to accommodate emergency response needs.

Products subject to an EUA must still comply with the conditions of the EUA, including labeling and marketing requirements.

Moreover, the authorization to market products under an EUA is limited to the period of time the public health emergency declaration is in effect, as determined by HHS.

On February 4, 2020, the HHS Secretary determined that the novel coronavirus presented a public health emergency that has a significant potential to affect national security or the health and security of U.S.

citizens living abroad and declared that circumstances existed justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of the novel coronavirus that causes COVID-19.

All of our current products for testing for the COVID-19 virus are sold in the U.S.

Some of our current respiratory products were initially authorized by the FDA under EUAs and such EUAs remain in effect until the relevant EUA declaration under Section 564 of the FDCA is terminated or the FDA otherwise revokes a specific EUA.

If and when HHS publishes a notice of termination of such EUA declaration, and following the end of any applicable enforcement discretion period, we must comply with applicable FDCA requirements for these respiratory products, including as required, 510(k) notification or PMA submission.

The FDA’s Clinical Laboratory Improvement Amendment of 1988 (“CLIA”) regulates laboratory testing and requires clinical laboratories to be certified by their state, as well as the Centers for Medicare & Medicaid Services (“CMS”), before diagnostic testing can be conducted.

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We must also comply with Medical Device Reporting requirements, which mandates reporting to the FDA of any incident in which a device may have caused or contributed to a death or serious injury, or in which a device malfunctioned and, if the malfunction were to recur, would be likely to cause or contribute to a death or serious injury.

Labeling and promotional activities are also subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission (“FTC”).

and promotional activities are also subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission (“FTC”).

Current FDA enforcement policy prohibits the marketing of approved medical devices for unapproved uses.

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Certain of our blood screening products are regulated by the FDA as biological products, also called biologics.

In the U.S., biologics are subject to regulation under the FDCA and the Public Health Service Act (“PHSA”), and other federal, state, local and foreign statutes and regulations.

In the U.S., biologics are subject to regulation under the FDCA and the Public Health Service Act, and other federal, state, local and foreign statutes and regulations.

The process required by the FDA before biologics may be marketed in the U.S.

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The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may include limitations on the indicated uses for which such product may be marketed.

The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.

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The FDA may require one or more post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.

Any biologics manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic

reporting, product sampling and distribution, and advertising and promotion of the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

There also are continuing annual program fees for any marketed products.

Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

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Other potential consequences include, among other things:

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal of the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal by the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.

In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of biologics and medical devices.

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is typically in the European Union (“EU”), Australia, Brazil, Canada, China, Japan and the U.K.

EU regulations and directives generally classify healthcare products either as medicinal products, medical devices or IVD.

EU regulations and directives generally classify healthcare products either as medicinal products, medical devices or IVDs.

In order for medical devices to be placed on the European market or put into service, they must bear a CE marking.

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The transition period provided for in the EU MDR for existing certifications issued under the previous Medical Devices Directive will end on May 26, 2024.

For certain medical devices, the transition period was extended and is scheduled to end between December, 31, 2026 and December 31 2028, depending on the class of the device and the fulfillment of certain additional conditions (EU 2023/607).

The EU IVDR has been applicable since May 26, 2022.

In January 2022, the European Parliament and the Council adopted a staggered extension of its transition period, ranging from May 26, 2025 for high risk in vitro diagnostics to May 26, 2027 for lower risk in vitro diagnostics, and to May 26, 2028 for certain provisions concerning devices manufactured and used in health institutions (Regulation (EU) 2022/112).

In January 2022, the European Parliament and the Council adopted a staggered extension of its transition period, for certain existing certifications, ranging from May 26, 2025 for high risk IVDs, May 26, 2026 for medium risk IVDs, May 26, 2027 for lower risk IVDs, and to May 26, 2028 for certain provisions concerning devices manufactured and used in health institutions (EU 2022/112).

However, the transition periods might still be subject to change.

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Chinese regulations require registration of diagnostic products with China’s National Medical Products Administration (“NMPA,” formerly CFDA), including NMPA’s Announcement (No.

104, 2020), which provides an accelerated pathway for the localization of imported medical devices and IVD products in China by permitting (for certain classes or products) the same medical approval license previously approved by the mainland authorities to apply to provincial domestic enterprises in China, providing for the same product design and equivalent quality system that is traceable to the imported licensed product.

104, 2020), which provides an accelerated pathway for the localization of imported medical devices and IVD products in China by permitting (for certain classes or products) the same medical approval license previously approved by the mainland authorities to apply to foreign invested enterprises established in China by the licensee of such medical approval license, providing for the same product design and equivalent quality system that is traceable to the imported licensed product.

Additional clinical trials in China are typically required for registration purposes.

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Our products are subject to various healthcare-related laws regulating fraud and abuse, R&D, pricing, sales and marketing practices, and the privacy and security of health information.

Among other things, these laws and others generally (a) prohibit the provision of anything of value in exchange for the referral of patients or for the purchase, order, or recommendation of any item or service reimbursed by a federal healthcare program, including Medicare and Medicaid;

(b) require that claims for payment submitted to federal healthcare programs be truthful;

and (c) require the maintenance of certain government licenses and permits.

Specific health-care laws and regulations that we are subject to include:

Among other things, these laws and others generally:

(1) prohibit the provision of anything of value in exchange for the referral of patients or for the purchase, order, or recommendation of any item or service reimbursed by a federal healthcare program, including Medicare and Medicaid;

(2) require that claims for payment submitted to federal healthcare programs be truthful;

and (3) require the maintenance of certain government licenses and permits.

Specific health-care laws and regulations that we may be subject to include:

• the federal Physician Self-Referral Law, which prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, and prohibits the entity from presenting or causing to be presented claims to Medicare for those referred services;

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• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to item or services reimbursed by any third-party payor, including commercial insurers;

state laws requiring device companies to comply with specific compliance standards, restrict payments made to healthcare providers and other potential referral sources, and report information related to payments and other transfers of value to healthcare providers or marketing expenditures and state laws related to insurance fraud in the case of claims involving private insurers.

Data Privacy and Security Laws

We are subject to data privacy and security laws and regulations in numerous jurisdictions, as well as customer-imposed controls, as a result of having access to and processing confidential, personal and/or sensitive data in the course of our business.

Specific data privacy and security laws that we are subject to include:

• HIPAA, which imposes, among other things, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information.

Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA;

• the California Consumer Privacy Act of 2018 (“CCPA”), which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.

Further, the California Privacy Rights Act, which amends the CCPA, became operative on January 1, 2023 and imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for certain higher risk data processing, and opt outs for certain transfers of personal information and uses of sensitive data.

It also created a new California data protection agency authorized to issue substantive regulations, which are in the process of finalization, and could result in increased privacy and information security enforcement.

A similar law in Virginia also took effect January 1, 2023, and similar laws also have passed in other states, including Colorado, Utah, and Connecticut.

providers or marketing expenditures and state laws related to insurance fraud in the case of claims involving private insurers.

Privacy, Data Security and Data Protection Laws

We are subject to privacy, data security and data protection laws and regulations in numerous jurisdictions, as well as customer-imposed requirements, as a result of having access to and processing confidential, personal and/or sensitive information in the course of our business.

Specific privacy, data security and data protection laws that we and our customers may be subject to include:

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, which imposes, among other things, privacy, data security and security breach reporting obligations with respect to protected health information (“PHI”) on covered entities and business associates.

These requirements include entering into agreements that require business associates to protect PHI provided by the covered entity against improper use or disclosure, among other things;

following certain standards for the privacy of PHI, which limit the disclosure of a patient’s past, present or future physical or mental health or condition or information about a patient’s receipt of health care if the information identifies, or could reasonably be used to identify, the individual;

ensuring the confidentiality, integrity and availability of all PHI created, received, maintained or transmitted in electronic form to identify and protect against reasonably anticipated threats to the security and integrity of such PHI or impermissible uses or disclosures of such PHI;

and reporting of security breaches involving PHI to individuals, regulators, business associates and the media;

state privacy laws that govern the privacy and data security of personal information, including health information, in certain circumstances.

The California Consumer Privacy Act of 2018 (“CCPA”) creates individual privacy rights for California consumers and imposes privacy and data security obligations on certain entities that do business in California, including to provide specific disclosures in privacy notices and to provide rights to California residents in relation to their personal information.

Further, the California Privacy Rights Act (“CPRA”), which amends the CCPA, became fully operative on January 1, 2023 and imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for certain higher risk data processing, and opt outs for certain transfers of personal information and uses of sensitive data.

It also created a new data protection agency, the California Privacy Protection Agency, which is granted full administrative power, authority, and jurisdiction to implement and enforce the CCPA and CPRA.

A similar law in Virginia went into effect on January 1, 2023 and in Colorado and Connecticut on July 1, 2023, and similar laws also have passed in other states, including in Delaware, Indiana, Iowa, Montana, Oregon, Tennessee, Texas and Utah.

Comprehensive privacy laws also have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the U.S.;

• the FTC Act, and state consumer protection laws, enforced by many state Attorneys General for online collection, use, dissemination and security practices that appear to be unfair or deceptive;

• the FTC often relies on Section 5 of the FTC Act to enforce inadequate privacy and data security practices.

Section 5 of the FTC Act provides the FTC with broad authority to protect consumers from unfair or deceptive acts or practices in or affecting commerce;

• outside the U.S., the General Data Protection Regulation 2016/679 (the “GDPR”) and the U.K.

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General Data Protection Regulation and the U.K.

Data Protection Act 2018 (collectively, the “U.K.

GDPR”), which govern the processing of information in those jurisdictions, and could result in significant fines (up to the greater of €20 million / £17.5 million or 4% of total annual revenue), regulatory investigations, reputational damage, orders to cease or change our processing of our data, enforcement notices or assessment notices (for a compulsory audit), civil claims including representative actions and other class action type litigation;

Data Protection Act 2018, which govern the processing of personal data in those jurisdictions, and could result in significant fines (up to the greater of €20 million / £17.5 million or 4% of total worldwide annual turnover of the preceding financial year), regulatory investigations, reputational damage, orders to cease or change our processing of our data, enforcement notices or assessment notices (for a compulsory audit), civil claims including representative actions and other class action type litigation;

rules with respect to cross-border transfers of personal data out of the European Economic Area (the “EEA”) and the U.K., respectively, which are in flux, including in light of a decision by the Court of Justice of the E.U.

invalidating the E.U.-U.S.

Privacy Shield Framework, and the European Commission’s recent publishing of revised standard contractual clauses, which we must now consider and apply, where applicable.

In light of these changing requirements, we could suffer additional costs, complaints, regulatory investigations or fines, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services and the geographical location or segregation of our relevant systems and operations, which could adversely affect our financial results, including because we rely on third parties in other countries;

Privacy Shield Framework, and the European Commission’s publishing of revised standard contractual clauses (“SCCs”) in 2021, which we must consider and apply, where applicable.

When relying on SCCs, the data exporters are also required to conduct a transfer risk assessment to verify if anything in the law and/or practices of the third country may impinge on the effectiveness of the SCCs in the context of the transfer at stake and, if so, to identify and adopt supplementary measures.

Where no supplementary measure is suitable, the data exporter shall avoid, suspend or terminate the transfer.

With regard to the transfer of data from the EEA to the U.S., on July 10, 2023, the European Commission adopted its adequacy decision for the E.U.-U.S.

Data Privacy Framework.

On the basis of the new adequacy decision, personal data can flow from the EEA to U.S.

companies participating in the framework.

With regard to the transfer of data from the U.K.

to the U.S., the U.K.

government has recently adopted an adequacy decision for the U.S., the U.K.-U.S.

Data Bridge, which came into effect on October 12, 2023.

The U.K.-U.S.

Data Bridge recognizes the U.S.

as offering an adequate level of data protection where the transfer is to a U.S.

company participating in the E.U.-U.S.

Data Privacy Framework and the U.K.

manner in which we provide our services and the geographic location or segregation of our relevant systems and operations, which could adversely affect our financial results, including because we rely on third parties in other countries;

• evolving privacy laws on cookies and e-marketing.

In the E.U., regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive will be replaced by an E.U.

regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance.

While the text of the ePrivacy Regulation is still under development, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies.

regulation known as the ePrivacy Regulation.

While the text of the ePrivacy Regulation is still under development, European court decisions and regulators’ recent guidance are driving increased attention to cookies and tracking technologies.

In the U.S., the FTC and many state laws have increasingly focused on the collection and use of behavioral data, including geolocation and biometric information.

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◦ several regulations and draft regulations for public comments, promulgated by the People’s Republic of China, which are designed to provide further supplemental guidance in accordance with the laws mentioned above;

• Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”), which governs data protection in the private sector with specific requirements around health privacy and consumer protection.

PIPEDA promotes transparency related to personal information collection, requires consent for use, encourages accountability for data handling and imposes obligations on organizations to protect personal data from unauthorized access, breaches and misuse;

• India’s Information Technology Act, 2000, which establishes a set of minimum security standards for protection of sensitive personal data, the Reasonable Security Practices and Procedures and Sensitive Personal Data or Information Rules and the newly enacted Digital Personal Data Protection Act, 2023.

These directives require that personal data is processed and managed with the utmost care, respecting the rights and dignity of individuals, and promote data security measures to protect against data breaches, cyber-attacks and unauthorized access to personal information;

• self-regulatory standards that privacy advocacy groups, the technology industry and other industries have established or may establish and various new, additional or different self-regulatory standards that may place additional burdens on us.

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• the Budget Control Act of 2011 reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional Congressional action is taken;

updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations;

• the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), enacted in 2015, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations;

• certain provisions of the Protecting Access to Medicare Act of 2014 (“PAMA”) were implemented by CMS in 2018, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.

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The revised reimbursement methodology is expected to generally result in relatively lower reimbursement under Medicare for clinical diagnostic lab tests than has been historically available.

Any reduction to payment rates resulting from the new methodology is limited to 10% per test per year in 2018 through 2020, and to 15% per test per year in 2021 through 2023.

Other Laws and Regulations Governing Our Sales, Marketing and Shipping

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Bribery Act of 2010 (the “Bribery Act”), the Brazilian Anti-Bribery Act (also known as the Brazilian Clean Company Act) and various other similar anti-corruption and anti-bribery laws.

Among other things, these laws generally prohibit us and our intermediaries from offering, promising or making payments to foreign government entities or officials for the purpose of obtaining or retaining business.

These laws generally prohibit us and our intermediaries from, among other things, offering, promising or making payments to foreign government entities or officials for the purpose of obtaining or retaining business.

We are also subject to pertinent U.S.

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and other countries with significant markets for our products, such as Western European countries and Japan, if the economics are deemed to justify such filing and our patent counsel advises that relevant patent protection may be obtained.

A large number of individuals and commercial enterprises seek patent protection for technologies, products and processes in fields in, or related to, our areas of product development.

To the extent such efforts are successful, we may be required to obtain licenses and pay royalties (some of which may be significant) in order to exploit certain of our product strategies.

Moreover, licenses to such patents may not be available to us at all or may not be available on acceptable terms.

We are aware of certain patents issued to various developers of diagnostic products with potential applicability to our diagnostic technologies.

We have entered into agreements with third parties to license and use their intellectual property, although no one such license is material to our business as a whole.

We have entered into agreements with third parties to license and use their intellectual property, when applicable to our products and services, although no one such license is material to our business as a whole.

In the future, we expect that we will require or desire additional licenses from other parties in order to refine our products further and to allow us to develop, manufacture and market commercially viable or superior products effectively.

In addition to existing patents, a large number of individuals and commercial enterprises seek patent protection for technologies, products and processes in fields in, or related to, our areas of product development.

To the extent such efforts are successful, we may be required to obtain licenses and pay royalties or other compensation (some of which may be significant) in order to pursue certain of our future product strategies.

Moreover, licenses to such patents may not be available to us at all or may not be available on acceptable terms.

In addition to seeking patent protection where appropriate, we also protect some of our intellectual property as trade secrets.

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Our principal trademarks and the products they cover are discussed above in the section entitled “Business Units and Products.”

Under many of our contractual agreements that involve the sale of our products, we have agreed to indemnify the counterparty against costs and liabilities arising out of any patent infringement claims and other intellectual property claims asserted by a third party relating to our products sold under those agreements.

Under many of our contractual agreements that involve the sale of our products, we have agreed to indemnify the counterparty against costs and liabilities arising out of any patent infringement claims and other intellectual property claims asserted by a third party attributable to our products sold under those agreements.

Human Capital and ESG Strategies

Human Capital Resources

As of January 1, 2023, we had approximately 7,000 employees worldwide, with approximately 4,200 employees in the U.S.

As of December 31, 2023, we had approximately 7,100 employees worldwide, with approximately 4,200 employees in the U.S.

and approximately 2,900 employees outside of the U.S.

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As a global organization, our unique perspectives, diverse backgrounds and collective strengths drive creative solutions, breakthrough innovation and highly productive teams.

In September 2022, we invited all of our employees to participate in a confidential, global survey to gather feedback and gain insights on key cultural and engagement factors.

Nearly 75% of global employees participated in the survey, and results show positive sentiment around engagement and workplace culture.

Respondents indicated a strong alignment to our strategic priorities and found meaning and purpose in their work.

We believe we are stronger together and will prioritize actions that support happy, inspired and engaged team members.

We plan to conduct periodic pulse surveys with employees throughout 2023 to measure progress and focus on continuous improvement.

In September 2022, we invited all employees to participate in a confidential, global survey to gather feedback and gain insights on key cultural and engagement factors and approximately 75% of our global employees participated in the survey.

In June 2023, approximately 85% of our global employees participated in a subsequent, follow-up pulse survey.

Respondents of both the 2022 and 2023 surveys indicated a strong alignment to our strategic priorities and find meaning and purpose in their work.

We believe we are stronger together and intend to prioritize actions that support happy, inspired and engaged team members.

We plan to conduct periodic pulse surveys with employees throughout 2024 to measure progress and focus on further improvements.

We are committed to maintaining an environment of equal employment opportunities for all job applicants and members of our team.

We fulfill this commitment through a variety of measures, including internal and external posting of job openings, hiring, training and promoting employees without regard to race, color, religion, gender identity or expression, pregnancy, national origin, ancestry, citizenship, military or veteran status, disability, medical condition, marital or domestic partner status, sexual orientation, age or any other considerations made unlawful by federal, state or local law.

We fulfill this commitment through a variety of measures, including internal and external posting of job openings, hiring,

training and promoting employees without regard to race, color, religion, gender identity or expression, pregnancy, national origin, ancestry, citizenship, military or veteran status, disability, medical condition, marital or domestic partner status, sexual orientation, age or any other considerations made unlawful by federal, state or local law.

We prohibit discrimination based on a perception that anyone has any of these characteristics or is associated with a person who has or is perceived as having any of these characteristics.

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In addition, we review Company programs, policies, procedures and activities with diversity and inclusion in mind.

We have established newly defined core behaviors based on the QuidelOrtho Way, which define our core values as a company and our ways of working together.

We have established defined core behaviors based on the QuidelOrtho Way, which define our core values as a company and our ways of working together.

These core behaviors include “bring your best,” which reflects each individual contributing to their highest potential, “embrace inclusion,” which reinforces the role each team member plays in creating a diverse, equitable and inclusive work environment, and “commit to service,” which reflects our value of serving our customers and communities in the core of everything we do.

We plan to expand upon the foundation of diversity and inclusion by incorporating other inclusive behaviors into these core behaviors and providing training to support all of our employees in being authentic in their self-expression and open to the self-expression of others.

As of January 1, 2023, 43% of our U.S.

As of December 31, 2023, 42% of our U.S.

employees identified as female and 37% of our U.S.

employees identified as having a racial and ethnic background other than white.

As of January 1, 2023, our executive management team consisted of 8 members, of whom 25% identified as female.

In addition, as of January 1, 2023, our board of directors (the “Board”) consisted of 12 members, of whom 25% identified as female and 17% identified as having a racial and ethnic background other than white.

As of December 31, 2023, our executive management team consisted of 8 members, of whom 25% identified as female.

In addition, as of December 31, 2023, our board of directors (the “Board”) consisted of 11 members, of whom 27% self-identified as female and 18% self-identified as having a racial and ethnic background other than white.

Employee Benefits

To succeed in a competitive labor market, we have recruitment and retention strategies that we focus on as part of the overall management of our business, including designing our compensation and benefits programs to be competitive and to align with our strategic and stockholders’ interests.

Accordingly, we use a mix of competitive base salary, cash-based annual incentive compensation, equity compensation awards and other employee benefits.

Accordingly, we use a mix of competitive base salary, cash-based annual incentive compensation, equity compensation awards and other employee benefits, when applicable.

Some of our key employee benefits include eligibility for health insurance, vacation time, a retirement plan with an employer match, an employee assistance program and life and disability coverage.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, which vary by country, and may include flexible spending accounts, hospital care, accident insurance, prepaid legal benefits, backup childcare, family forming benefits, homework support for students, student loan benefits, tuition reimbursement and a wellness program.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, which vary by country, and may include flexible spending accounts, hospital care, accident insurance, prepaid legal benefits, family forming benefits, tuition reimbursement and a wellness program.

These benefits are designed to offer employees a menu of options so that each employee can select benefits most meaningful to their personal situation.

We consider our employee benefits to be an important component of total compensation for our employees.

We consider our employee benefits to be an important component of total rewards and compensation for our employees.

Health, Safety and Environmental

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We listen to our internal and external stakeholders and aim to translate their needs into innovative solutions, in the products we offer and in our corporate philanthropy work.

Our charitable giving programs operate under the QuidelOrtho Community Action Review and Endowment Squad (“QCARES”) committee, which is responsible for quarterly review and approval of charitable contributions proposed by employees.

Our charitable giving programs operate under the Gift.

(G.I.V.E.) program.

Our charitable giving programs and activities in the U.S.

consist of the following:

• Matching gifts−We match charitable contributions by full-time, regular employees to qualifying non-profit organizations of up to $250 per employee annually.

• Volunteer incentive program−When an employee volunteers at an organization for a minimum of 20 hours in a calendar year, we donate $100 to that organization.

• General QCARES fund−We may donate up to $2,000 to an organization proposed by an employee.

• Matching gifts−We match charitable contributions made by active employees to qualifying non-profit organizations of up to $200 per employee annually.

• Volunteer incentive program−When an employee volunteers at a qualifying organization for a minimum of 20 hours in a calendar year, we donate $100 to that organization.

• General grant fund−We may donate up to $2,000 to a qualifying organization proposed by an employee.

• Community partnerships−As part of our commitment to expanding equitable access to healthcare, we have partnered with several major organizations to donate COVID-19 testing products to various communities across the nation to promote increased testing within communities to help prevent the spread of COVID-19.

As a world leader of in vitro diagnostics, we develop and manufacture innovative diagnostic technologies and solutions that transform data into answers and understanding into actions to enhance clinical outcomes for more people in more places every day.

We bring fast, accurate and reliable diagnostics when and where they are needed most – from home to hospital, lab to clinic.

As part of our ESG strategy, we are focused on the following cornerstones:

• monitoring the impacts of waste generation and energy and water usage consumption;

• implementing efficiencies at our global facilities and in our product manufacturing that mitigate risks, reduce costs and address impacts;

• supporting equitable access to healthcare in our communities;

• fostering a culture of happy people that welcomes and promotes diversity and inclusion;

• advancing good corporate governance that aids our long-term business success;

• being accountable, fair and transparent.

We believe these cornerstones contribute to the value created by our Company for all of its stakeholders and to fulfilling their expectations.

• Community initiatives and philanthropic programs−We contribute to a variety of community initiatives and philanthropic programs, including research partnerships, blood drive sponsorships, COVID-19 testing drives, medical supply donations, scholarship and internship programs, as well as STEM programs with educational institutions.

We are driven by a purpose to improve the quality of life for people all over the world by enabling more informed health decisions when and where they need them most.

We champion an authentic culture of service, empowering every employee to do their best.

We strive to create innovative products that are efficient, trusted, accessible and sustainable to support better outcomes for patients and practitioners.

Our goal is to align our corporate actions in the areas of environmental sustainability, social responsibility, ethics, diversity and inclusion, corporate governance and supply chain ecosystem responsibility to have a positive impact on our communities and for all our stakeholders in ways that provide value to our stockholders.

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4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business