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Item 1. Business

2025-02-27 compared with 2024-02-29 · 180 added, 200 removed, 433 unchanged (47% 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 2023” in this Annual Report refer to the Company’s fiscal year ended December 31, 2023.

References to “fiscal year ended 2024,” “fiscal year ended 2023” and “fiscal year ended 2022” in this Annual Report refer to the Company’s fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, respectively.

Refer to the Summary of Abbreviated Terms at the end of this Annual Report for definitions of terms used throughout this Annual Report.

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.

With our expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, we aim to support clarity for 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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and with sales centers, administrative offices and warehouses located throughout the world.

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 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.

Merger Sub”), and Orca Holdco 2, Inc., Quidel and Ortho consummated a business combination (the “Combinations”) by way of (i) a scheme of arrangement undertaken by Ortho under Part 26 of the U.K.

Companies Act 2006 (the “Ortho Scheme”), pursuant to which each issued and outstanding share of Ortho was acquired by a nominee of QuidelOrtho, such that Ortho became a wholly owned subsidiary of QuidelOrtho, and (ii) a merger of U.S.

Merger Sub with and into Quidel, with Quidel surviving the merger as a wholly owned subsidiary of QuidelOrtho.

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.

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 POC settings, blood banks and donor centers, as well as for individual, non-professional, OTC use.

On May 27, 2022, pursuant to the BCA, Quidel and Ortho consummated the Combinations and each of Quidel and Ortho became a wholly owned subsidiary of QuidelOrtho.

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.

We manage our business geographically to better align with the market dynamics of the specific geographic regions in which we operate.

Effective January 1, 2024, Japan and Asia Pacific operating segments were combined into one operating segment:

North America, EMEA and China are the Company’s reportable segments;

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

Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics.

We also generate non-core revenue, including through our contract manufacturing business and certain business collaborations.

In February 2024, we initiated a plan to transition out of our U.S.

donor screening portfolio through the wind-down of the VIP platform and microplate assays, which are only sold in the U.S., and have a lower growth and margin profile.

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.

Revenue” and “—Note 5.

Segment and Geographic Information.”

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

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 ® .

AdenoPlus ™ , BIOVUE ® , FreshCells ™ , InflammaDry ® , Lyra ® , MeterPro ® , MicroVue ™ , Ortho ® , Ortho Clinical Diagnostics ® , Ortho Connect ® , Ortho Optix ™ , Ortho Plus ® , ORTHO VISION ® , QuickVue ® , Quidel ® , QuidelOrtho ™ , QVue ™ , Savanna ® , Sofia ® , Solana ® , Thyretain ® , Triage ® , ValuMetrix ® , 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.

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Testing to detect and monitor disease progression across a broad spectrum of therapeutic areas

Other product revenues primarily from contract manufacturing

Specialized diagnostic solutions

Other product revenues primarily from contract manufacturing (1)

Collaboration and license agreements pursuant to which we derive collaboration and royalty revenues (1)

Molecular Diagnostics Tests for Polymerase Chain Reaction (“PCR”) thermocyclers with reduced process time and ready-to-use reagent configurations

Molecular Diagnostics Tests for PCR thermocyclers with reduced process time and ready-to-use reagent configurations

Molecular amplification systems with the ability to run multiple assays at the same time and tests for infectious disease diagnostics

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Tests that are visually read

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

Transfusion Medicine Transfusion Medicine business unit includes two product categories:

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

(1) Represents our non-core revenue.

All non-core revenue is recorded in the North America segment.

The products and platforms under each business unit are described below.

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Product Primary Application

Virology Wide variety of traditional cell lines, specimen collection devices, media and controls for use in laboratories that culture and test for human viruses, including, among others, respiratory and herpes family viruses

Virology & Bioassays Wide variety of traditional cell lines, specimen collection devices, media and controls for use in laboratories that culture and test for human viruses, including, among others, respiratory and herpes family viruses

Cell-based products under the FreshCells brand in multiple formats, including tubes, shell vials and multi-well plates

Food and Drug Administration (“FDA”)-cleared bioassay, Thyretain, which is used for the differential diagnosis of an autoimmune disease called Graves’ Disease

FDA-cleared bioassay, Thyretain, which is used for the differential diagnosis of an autoimmune disease called Graves’ Disease

Specialty Products Variety of biomarkers for bone health

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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

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

Savanna RVP4 assay offers simultaneous qualitative detection and differentiation of influenza A, influenza B, RSV, and SARS-CoV-2 RNA isolated from human nasal or nasopharyngeal swabs

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

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

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

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

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), Legionella, Lyme Disease, S.

Inflammatory Lactoferrin

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

Non-respiratory Infectious Diseases Adenoviral Conjunctivitis, Chlamydia, Clostridium Difficile (organism), Legionella, Lyme Disease, S.

Oncology Colorectal Cancer

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Ortho Optix Semi-automated testing platform used to read manual test results, designed with improved software and ability to integrate with laboratory information systems and offers improved workflow and 99% concordance with ORTHO VISION test results

ID-Micro Typing System (ID-MTS) Gel Cards Test consumables that utilize column agglutination technology (“CAT”) for our immunohematology instruments sold in the U.S., designed to provide reliable test results and simplify test workflow

ID-Micro Typing System (ID-MTS) Gel Cards Test consumables that utilize CAT for our immunohematology instruments sold in the U.S., designed to provide reliable test results and simplify test workflow

BIOVUE Cassettes Test consumables that utilize CAT for our immunohematology instruments sold outside of the U.S., designed to provide reliable test results and simplify test workflow

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Donor Screening

ORTHO VERSEIA Integrated Processor (“VIP”) Automated pipetting and processing system that combines the ORTHO VERSEIA pipettor and ORTHO Summit Processor to enable end-to-end pipetting and processing for tests used for blood and plasma screening for infectious diseases

VIP Automated pipetting and processing system that combines the ORTHO VERSEIA pipettor and ORTHO Summit Processor to enable end-to-end pipetting and processing for tests used for blood and plasma screening for infectious diseases

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

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This service offering provides actionable insights into demand for new products, services and workflow.

• 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.

• Global Technical Solution Center−Five 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 achieve the highest levels of reliability.

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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.

With Virena, a health system, physician office laboratory (“POL”), urgent care center or retail clinic has the ability to compile, analyze, map and generate reports of de-identified test results, improving operational efficiencies, quality and patient outcome initiatives.

With Virena, a health system, POL, urgent care center or retail clinic has the ability to compile, analyze, map and generate reports of de-identified test results, improving operational efficiencies, quality and patient outcome initiatives.

Digital Solutions and Innovation

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

We are building our enterprise digital product strategy, platform and portfolio, which we believe help 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.

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Our Strategic Capabilities and Competitive Strengths

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.

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.

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.

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.

We believe we are well positioned to drive sustained and profitable growth through an ethos of customer-centric decision making and behavior, which informs everything we do from product development to commercial execution.

This disciplined focus on serving customers has resulted in, and we believe will continue to create, a business model that can deliver profitable growth and shareholder returns.

The cash we generate allows us to reinvest in and reinforce our competitive strengths and strategic capabilities, which then benefit from our global footprint to enable us to be a leader across profitable and high-growth market segments.

The competitive strengths that serve as our foundation of success today and can drive future growth include four key aspects, all of which benefit from our talented people and loyal customers:

This disciplined focus on serving customers has resulted in, and we believe will continue to create, a business model that can deliver profitable growth and stockholder returns.

The competitive strengths that serve as our foundation of success today and can drive future growth include three key aspects, all of which benefit from our talented people and loyal customers:

• Superior customer experience and brand loyalty.

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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 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 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 continuous improvement and employee happiness.

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

That is why we are committed to attracting, retaining and developing the best talent in the industry.

Our culture puts our team members first and prioritizes actions that support happiness, inspiration and engagement.

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

• Strong commercial footprint.

We leverage our commercial team of more than 2,700 teammates in sales, service and marketing across more than 130 countries to facilitate successful delivery of innovative solutions to meet customer and patient needs across the healthcare continuum.

• POC Leadership.

We are a recognized leader in POC diagnostics, providing rapid, accurate and reliable solutions that empower providers to make informed decisions at the moment of care.

Our Sofia and Triage platforms are trusted across urgent care clinics, physician offices and other decentralized settings.

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 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.

We have also entered the at-home testing market and see opportunities to benefit from additional at-home tests, such as for the flu and RSV.

Additionally, we have made investments to design and develop solutions that are intended to drive laboratory automation and efficiency, improve access to new and novel diagnostics, and enable patients and providers to experience the full benefits of a remote and digitized healthcare system.

For example, with the onset of the COVID-19 pandemic, physicians and patients experienced a rapid shift to telemedicine and at-home testing.

Going forward, we believe it is important to continue to build digital capabilities and solutions into our offerings to take advantage of this trend and our expectations that it will continue to emerge and evolve.

Longer term, we intend to continue to invest in areas with unmet clinical needs.

We are aware of additional markets in which we do not yet compete, but that may benefit from our R&D capabilities and larger operational scale.

We also plan to continue to explore the technology and content landscapes for strategic assets.

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.

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.

We expect to maintain a disciplined approach to inorganic growth.

Current initiatives to execute on this strategy include the following:

• develop and deliver products that represent significant market opportunities, and compete effectively in market segments where service and quality are important;

• focus our R&D efforts;

• leverage our large direct sales team to enhance our cross-selling capabilities across our four business units, and strengthen our relationships with integrated delivery networks, laboratories and hospitals;

• continue to invest in our digital health solutions, including our mobile applications, to expand into new and growing markets;

• pursue potential acquisitions to support our strategic initiatives.

To achieve this, we serve a broad range of market segments across the healthcare continuum, from large centralized laboratories to physicians’ offices and other decentralized settings.

While these care settings have traditionally been less integrated, the healthcare landscape continues to become more integrated.

This consolidation is bringing together labs, hospitals, physicians’ offices and urgent care clinics into unified healthcare systems.

This integration means that success in one care setting often creates opportunities in others within the same system.

Central to our strategy is a focus on economic profit and return on invested capital (ROIC) across all aspects of our business.

We are committed to allocating resources and capital efficiently and seek to deliver sustainable returns above the cost of capital.

By prioritizing opportunities that can maximize economic profit, we aim to create value for our stakeholders while maintaining a disciplined approach to growth.

In the near term, we are focusing on a set of strategic initiatives across our lines of business and geographies to improve the underlying business and deliver greater stockholder value.

Our near-term priorities include:

• capturing market share in high-value profit pools where we hold a strong competitive position;

• building a culture focused on driving sales growth, profitability, cash flow and returns for stockholders;

• aligning incentive structures with both customer and stockholder value creation;

• developing and executing a comprehensive talent management strategy.

Longer term, we plan to continue to build and enhance our award-winning customer service, invest in platform capabilities and improve our assay menus.

Recognizing the complexity and speed of innovation in these areas, we will explore partnerships where we find strategic and financial alignment.

This approach allows us to mitigate risk, accelerate innovation and deliver solutions to market more efficiently.

Research and Development

We continue to focus our R&D efforts on the following areas:

• creation of new and improved products for use on our installed base;

• development of new proprietary product platforms for all of our business units;

• creation of new and improved products for use on our installed base, including new and improved assays and software;

• support of important life-cycle-management efforts to maintain our current on-market portfolio of products;

• pursuit of collaboration with other companies for new and existing products and markets.

We balance our R&D efforts against our R&D team’s capacity, development timelines and overall cost.

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.

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 $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.

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

R&D expenses were $218.7 million, $245.0 million and $187.9 million for fiscal years ended 2024, 2023 and 2022, respectively, which includes the impact of Ortho’s operations from the date of the Combinations.

We anticipate a continued appropriate investment of our financial resources to product and technology R&D for the foreseeable future, with increases and decreases as projects progress through the various development phases.

Sales, Marketing and Distribution

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 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.

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

Labs, Transfusion Medicine (Immunohematology and Donor Screening product categories), Point of Care and Molecular Diagnostics.

We also generate non-core revenue, including through our contract manufacturing business and certain business collaborations.

Certain of our revenue is driven by a “razor/razor blade” business model.

Through this model, we generally sell or place instruments under long-term contracts, which support the ongoing sale of our assays, reagents and consumables.

Our instruments are closed systems, requiring customers to purchase the assays, reagents and consumables from us.

Under this model, our customers are required to purchase the assays, reagents and consumables from us.

These sales generate a high proportion of our recurring revenues.

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Our primary distribution centers are located in North America and Europe.

In North America, we use a generalized sales force for each of our business units other than for donor screening within Transfusion Medicine, which utilizes a separate specialist sales force.

In North America, we use a sales force for each of our business units.

Our North America distribution strategy takes into account the highly fragmented POC market, with many small or medium-sized customers.

To reach customers using POC diagnostic tests, a network of national and regional distributors is employed, as well as our own sales force.

We have expanded the size of our North America sales force in the past few years.

In the past few years, we have evolved our North America sales force to be specialized as product experts and invested in new business development roles strategically to expand our market footprint in independent reference laboratory, urgent care and oncology markets.

This sales force works closely with our key distributors to drive market penetration of our products.

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In addition, we have created shared service centers in Galway, Ireland, Prague, Czech Republic and Strasbourg, France to support general and administrative, technical support and customer service functions in Europe.

In the Asia Pacific region, which includes China, Japan and India, our employees support sales and marketing activities, primarily for the Point of Care, Labs and Transfusion Medicine business units.

In China and the Asia Pacific region, which includes Japan and India, our employees support sales and marketing activities, primarily for the Point of Care, Labs and Transfusion Medicine business units.

In addition, we have created shared service centers in Shanghai, China and Hyderabad, India to support general and administrative, technical support and customer service functions.

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

Our marketing strategy is focused on ensuring that our key product portfolios are supported by clinical validation and health economic and outcomes research that show that our tests deliver fast, high-quality results, are cost-effective to use with lower total cost of ownership, and improve patient outcomes.

Our marketing strategy is focused on efforts to demonstrate that our key product portfolios are supported by clinical validation and health economic and outcomes research that show that our tests deliver fast, high-quality results, are cost-effective to use with lower total cost of ownership, and improve patient outcomes.

Our marketing strategy also focuses on effectively marketing to customers a differentiated value proposition and maintaining our brand strength as further discussed above in the section entitled “Our Strategic Capabilities and Competitive Strengths.”

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

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.

For fiscal year ended 2024, one customer represented 11% of Total revenues.

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

Revenue” for more information.

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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.

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

Our Carlsbad, California lateral flow manufacturing facility consists of laboratories devoted to tissue culture, cell culture, protein purification or immunochemistry, and production areas dedicated to manufacturing and assembly.

In the manufacturing process, biological and chemical supplies and equipment are used.

We have invested in a high degree of automated equipment for the assembly and inspection processes.

These facilities operate under a Quality Management System (“QMS”) per International Organization for Standardization (“ISO”) standard and regulatory regulations.

These facilities are certified to ISO 13485:2016 and Medical Device Single Audit Program (“MDSAP”) medical device standards.

Many of the immunoassay products manufactured at these facilities are packaged and shipped by a local third party.

This facility operates under a QMS per ISO standard and regulatory regulations and is certified to ISO 13485:2016 and MDSAP medical device standards.

Many of the immunoassay products manufactured at this facility are packaged and shipped by a local third party.

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.

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, drugs of abuse and molecular diagnostic products) using customized manufacturing equipment, including specialized automation.

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

Most of the products are packaged and subsequently distributed by our San Diego distribution center.

Our Athens, Ohio facility consists of a variety of clean room and chemistry laboratories and customized reagent filling and packaging areas to support the manufacturing at the facility of all products under current good manufacturing practices (“cGMPs”).

This facility supports the manufacturing of our molecular nucleic acid amplification products, our living tissue cell culture and antibody-based products, as well as our enzyme linked immunosorbent assays (“ELISA”).

We use a wide variety of biological and chemical supplies in our manufacturing processes.

We also utilize specialized equipment for the lyophilization of reagents, cell culture growth, protein purification and a variety of automation for dispensing of antibodies, reagents and solutions.

We use a wide variety of biological and chemical supplies in

our manufacturing processes.

We also utilize specialized equipment for the lyophilization of reagents, cell culture growth, protein purification and a variety of automation methods for dispensing of antibodies, reagents and solutions.

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

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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 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 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.

While we encountered increasing pressures on raw material pricing during fiscal years ended 2023 and 2022, inflationary impacts during fiscal year ended 2024 lessened and returned closer to pre-COVID-19 pandemic levels.

To help mitigate these supply chain challenges, we (i) partner with suppliers to invest in additional capacity and raw material inventory, (ii) diversify our supply base, where possible, to minimize reliance on a single source of supply for key raw materials and components, (iii) create redundancy in our global supply chain and (iv) insource activity where it makes strategic and financial sense.

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—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.”

For more information related to our supply chain, refer to 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

We have various collaboration arrangements, which provide us with the rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners.

These arrangements are often entered into in order to share risks and rewards related to a specific program or product.

These arrangements are often entered

into in order to share risks and rewards related to a specific program or product.

Our collaborative arrangements include a number of ongoing relationships for test development, instrument development and automation track design and distribution.

In connection with the Combinations, we acquired the ongoing collaboration arrangement (the “Joint Business”) between Ortho and Grifols Diagnostic Solutions, Inc.

(“Grifols”), under which Ortho and Grifols agreed to pursue a collaboration relating to Ortho’s Hepatitis and HIV diagnostics business.

The arrangement is governed by an agreement (as amended, the “Grifols Agreement”) originally entered into in 1989 with a 50-year term, which, among other things, provides for a profit sharing arrangement whereby, the profits we generate from our production and sale of Hepatitis and HIV diagnostics products are shared with Grifols, and the profits generated by Grifols from its sale of certain antigens and licensing of certain intellectual property rights are shared with us.

The Company has an ongoing Joint Business between Ortho and Grifols, under which Ortho and Grifols agreed to pursue a collaboration relating to Ortho’s Hepatitis and HIV diagnostics business.

The arrangement is governed by the Grifols Agreement, which, among other things, provides for a profit sharing arrangement whereby, the profits we generate from our production and sale of Hepatitis and HIV diagnostics products are shared with Grifols, and the profits generated by Grifols from its sale of certain antigens and licensing of certain intellectual property rights are shared with us.

The Grifols Agreement also gives us the right to use such intellectual property.

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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 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.

During fiscal year ended 2024, 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 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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are subject to regulation by numerous governmental authorities, principally the FDA as medical devices and corresponding state regulatory agencies.

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.

Pursuant to 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.

Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of cGMPs for medical devices known as the Quality System Regulation (“QSR”) facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising and promotional materials.

Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of cGMPs for medical devices known as the QSR facility registration and product listing, reporting of adverse medical events, and truthful and non-misleading labeling, advertising and promotional materials.

Class II devices are subject to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device, like performance standards, post-market surveillance, patient registries and FDA guidance documents.

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It generally takes from three months to one year to obtain clearance, but may take longer.

A premarket approval (“PMA”) application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically including the results of clinical investigations, bench tests and reference laboratory studies.

In addition, modifications or enhancements for existing products that could significantly affect their safety or effectiveness or constitute a major change in the intended use of the device, will require new submissions to the FDA.

A PMA application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device, typically including the results of clinical investigations, bench tests and reference laboratory studies.

In addition, modifications or enhancements for existing products that could significantly affect their safety or effectiveness or constitute a

major change in the intended use of the device, will require new submissions to the FDA.

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

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pursuant to 510(k) clearances and PMA approvals.

The FDA can authorize the emergency use of an unapproved medical product or an unapproved use of an approved medical product, referred to as emergency use authorization (“EUA”), for certain emergency circumstances after the Secretary of the U.S.

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

The FDA can authorize the emergency use of an unapproved medical product or an unapproved use of an approved medical product, referred to as EUA, for certain emergency circumstances after the Secretary of the HHS has made a declaration of emergency justifying authorization of emergency use.

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.

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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.

The FDA’s CLIA regulates laboratory testing and requires clinical laboratories to be certified by their state, as well as the CMS, before diagnostic testing can be conducted.

Laboratories using our assays must obtain a CLIA certificate.

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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.

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

Labeling and promotional activities are also subject to scrutiny by the FDA and, in certain circumstances, by the FTC.

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

Regulation of Biological Products

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

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

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.

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

generally involves the following:

• completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements;

• submission to the FDA of an Investigational New Drug application (“IND”) which must become effective before human clinical trials may begin.

An IND is a request for authorization from the FDA to administer an investigational new drug product to humans;

• completion of preclinical laboratory tests, and when appropriate, animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements;

• submission to the FDA of an IND which must become effective before human clinical trials may begin.

An IND is a request for authorization from the FDA to administer an investigational new drug or biologic IVD product to humans and human specimens;

• approval by an Institutional Review Board or ethics committee at each clinical site before the trial is commenced;

• performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

• preparation of and submission to the FDA of a Biologics License Application (“BLA”) after completion of all pivotal clinical trials;

• performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic IVD product candidate for its intended purpose;

• preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials;

• satisfactory completion of an FDA Advisory Committee review, if applicable;

• a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

• satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is to be produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices;

controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices;

• FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the U.S.

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.

The BLA must include all relevant data available from preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.

The submission of a BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.

After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced and of select clinical trial sites, the FDA may issue an approval letter or a Complete Response Letter (“CRL”).

An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.

An approval letter authorizes commercial marketing of the product with specific prescribing information for use for specific indications.

In issuing the CRL, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification.

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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.

Any biologic IVDs 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.

In addition, a summary of every manufactured lot of product must be submitted to the FDA for review and approval prior to distribution.

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 imposes certain procedural and

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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Our initial focus for obtaining marketing approval outside the U.S.

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

is typically in the 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 IVDs.

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In some other cases, the notified body must seek a scientific opinion from specific expert panels or the European Medical Agency before issuing a CE certificate.

In addition, the EU has adopted the EU Medical Device Regulation (EU 2017/745) (the “EU MDR”) and the In Vitro Diagnostic Regulation (EU 2017/746) (the “EU IVDR”), each of which impose stricter requirements for the marketing and sale of medical devices than in the U.S., including in the area of clinical evaluation requirements, quality systems and post-market surveillance.

The compliance deadlines for the EU MDR and EU IVDR were May 2021 and May 2022, respectively.

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.

In addition, the EU has adopted the EU MDR and the EU IVDR, each of which impose stricter requirements for the marketing and sale of medical devices than in the U.S., including in the area of clinical evaluation requirements, quality systems and post-market surveillance.

The compliance deadlines for the EU MDR and EU IVDR were May 2021 and May 2022, respectively, and the transition period provided for in the EU MDR for existing certifications issued under the previous Medical Devices Directive ended 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, 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).

In June 2024, the European Parliament and the Council adopted a staggered extension of its transition period, for certain existing certifications, ranging from December 31, 2027 for high risk IVDs, December 31, 2028 for medium risk IVDs, December 31, 2029 for lower risk IVDs and December 31, 2030 for certain provisions concerning devices manufactured and used in health institutions (EU 2024/1860).

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

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Failure to meet these regulatory requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

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

Chinese regulations require registration of diagnostic products with China’s NMPA, 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 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.

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• 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;

• the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, where one purpose is to induce either the referral of an individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as Medicare and Medicaid.

individual for, or the purchase order or recommendation of, any item or services for which payment may be made under a federal healthcare program such as Medicare and Medicaid.

government has interpreted this law broadly to apply to the marketing and sales activities of medical device manufacturers;

• the federal civil and criminal false claims laws, including the False Claims Act (“FCA”), which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent.

• the federal civil and criminal false claims laws, including the FCA, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent.

Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA;

• the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

• the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

• HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

• the federal Physician Payments Sunshine Act which requires certain applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under certain federal healthcare programs, to monitor and report to CMS, certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers, including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

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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;

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

Privacy, Data Security and Data Protection Laws

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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;

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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 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.

The California Consumer Privacy Act of 2018, as amended by the 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, to provide rights to California residents in relation to their personal information, and to conduct audits for certain higher risk data processing.

Similar laws have gone into effect or passed in other states, though most state laws exempt entities that are subject to HIPAA, unlike the CCPA, which only has a data-level exemption.

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.

Additionally, certain U.S.

state laws, such as California’s Confidentiality of Medical Information Act and Washington’s My Health My Data Act, govern the privacy and security of health-related information, specifically;

• the FTC and U.S.

state Attorneys General often rely on Section 5 of the FTC Act and state consumer protection laws, respectively, to enforce inadequate privacy and data security practices.

Section 5 of the FTC Act and state consumer protection laws provide the FTC and state Attorneys General, respectively, with broad authority to protect consumers from unfair or deceptive acts or practices;

• in the EEA and U.K., the GDPR and the U.K.

data protection regime consisting primarily of the U.K.

General Data Protection Regulation and the U.K.

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 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.

Data Protection Act 2018, which govern the processing of personal data of persons 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 personal data, enforcement notices or assessment notices (for a compulsory audit), civil claims including representative actions and other class action type litigation;

• EU and U.K.

rules with respect to cross-border transfers of personal data out of the EEA and the U.K., respectively, which are in flux, including in light of a decision by the Court of Justice of the EU invalidating the EU-U.S.

Privacy Shield Framework, the European Commission’s publishing of revised SCCs in 2021, and the U.K.

IDTA and Addendum to the SCCs (the “Addendum”) that came into effect on March 21, 2022, which we must consider and apply, where applicable.

When relying on SCCs or the U.K.

IDTA and Addendum, 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 or U.K.

IDTA and Addendum 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.

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 EU-U.S.

Data Privacy Framework.

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

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

company participating in the EU-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;

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 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.

In the EU, 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 EU 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.

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These include:

◦ China’s Cybersecurity Law, including data localization requirements that require operators of critical information infrastructure (“CIIOs”) to store personal information and important data collected and generated from the critical information infrastructure within China.

Failure to do so can result in fines of up to RMB 100,000 for the relevant entity as well as for the personnel directly responsible;

◦ China’s Cybersecurity Law, including data localization requirements that require operators of CIIOs to store personal information and important data collected and generated from the critical information infrastructure within China.

Failure to do so can result in, among other penalties, fines of up to RMB 500,000 for the relevant entity as well as RMB 100,000 for the personnel directly responsible;

◦ China’s Data Security Law (“Data Security Law”), which became effective on September 1, 2021, and applies extraterritorially and to a broad range of activities that involve “data” (not only personal or sensitive data).

Under the Data Security Law, entities and individuals carrying out data activities must abide by various data security obligations, including implementing the appropriate level of protective measures for each respective class of data and storing data locally in China (or in compliance with certain data transfer restrictions);

◦ China’s Personal Information Protection Law (“PIPL”), which is similar to the GDPR and also applies extraterritorially.

The PIPL provides the legality of personal information processing and the basic requirements of notice and consent, sets out data localization requirements for CIIOs and personal information processors who process personal information above a certain threshold prescribed by the relevant authorities, and provides a list of rules for transferring personal information outside of China.

◦ China’s PIPL, which is similar to the GDPR and also applies extraterritorially.

outside of China.

Failure to comply with PIPL can result in fines of up to RMB 50 million or 5% of the prior year’s total annual revenue for the personal information processor and/or a suspension of services or data processing activities, among other fines and criminal liabilities, including ones that can be placed on responsible personnel;

◦ 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.

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

• Canada’s 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.

Quebec’s Law 25 and other provincial laws governing personal information also impose additional data subject rights and obligations that have recently taken effect;

• 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;

• enacted or considered legislation similar to the above in other countries around the world, in which we do business, including Brazil’s General Data Protection Law ( Lei Geral de Proteção de Dados Pessoais ), Chile’s Personal Data Protection Law, Mexico’s Federal Law on Protection of Personal Data Held by Private Parties ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ) and Panama’s Personal Data Protection Law ( Ley sobre Protección de Datos Personales ), which impose requirements for processing personal data about persons in those jurisdictions;

• 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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If we are unable to maintain these certifications or meet these standards, it could reduce demand for our solutions and adversely affect our business.

• enacted or considered legislation similar to the above in other countries around the world, in which we do business.

Environmental, Health and Safety Laws

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For example, in the U.S.:

• the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “PPACA”) implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;

• the PPACA implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;

• 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;

• 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.

• the 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 PAMA were implemented by CMS in 2018, which made substantial changes to the way in which clinical laboratory services are paid under Medicare.

Under PAMA, the revised Medicare reimbursement rates were scheduled to apply to clinical diagnostic laboratory tests furnished on or after January 1, 2018.

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Other Laws and Regulations Governing Our Sales, Marketing and Shipping

We are subject to the U.S.

Foreign Corrupt Practices Act (the “FCPA”), the U.K.

We are subject to the FCPA, the U.K.

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.

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We also must comply with various export control and trade embargo laws, which may require licenses or other authorizations for transactions within some countries or with some counterparties.

Additionally, we are subject to laws and regulations and certain environmental, social and governance (“ESG”) requirements applicable to our government contracts, and failure to address these laws and regulations, ESG requirements, or to comply with government contracts could result in fines, debarment or exclusion from federal healthcare or global tender programs, or harm our business by a reduction in revenue associated with these customers.

Additionally, we are subject to laws and regulations and certain sustainability requirements applicable to our government contracts, and failure to address these laws and regulations, sustainability requirements, or to comply with government contracts could result in fines, debarment or exclusion from federal healthcare or global tender programs, or harm our business by a reduction in revenue associated with these customers.

We are also subject to audits for compliance with the regulations governing government contracts.

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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 and Sustainability Strategies

Human Capital Resources

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To date, we have experienced no work stoppages and believe that our employee relations are good.

Diversity, Equity and Inclusion

Inclusion and Belonging

Our employees are one of our most important assets and set the foundation for our ability to achieve our strategic objectives, drive operational execution, deliver strong financial performance, advance innovation, and maintain our quality and compliance programs.

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We are dedicated to fostering a culture that supports diverse talents, experiences and perspectives and an environment of mutual respect, equity and collaboration that helps drive our business.

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 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.

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

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 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.

We fulfill this commitment through a variety of measures, including internal and external posting of job openings, hiring, training and promoting employees based on merit.

We prohibit discrimination that is unlawful by federal, state or local law.

In keeping with our core values, we are steadfast in taking action to provide equal employment opportunity in accordance with all applicable federal, state and local laws.

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

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 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 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.

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

We have established defined core behaviors based on the QuidelOrtho Way, which defines 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 an inclusive and positive 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 these core behaviors by incorporating other inclusive 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.

Employee Benefits

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We also maintain health and safety programs conforming to best practices in the diagnostics industry.

We are focused on minimizing risk and protecting our employees and communities by employing safe technologies and operating procedures, and in turn minimizing recordable incidents and improving safety across our organization.

We are focused on minimizing risk and protecting

our employees and communities by employing safe technologies and operating procedures and creating opportunities for employee engagement and input to drive continuous improvement, which in turn can minimize recordable incidents and improve safety across our organization.

We believe that all of our manufacturing and distribution facilities are operated in compliance with existing environmental requirements in all material respects, including the operating permits required thereunder.

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• 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.

• 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.

• Community initiatives and philanthropic programs−We contribute to a variety of community initiatives and philanthropic programs, including research partnerships, blood drive sponsorships, scholarship and internship programs, as well as STEM and STEAM programs with educational institutions.

Sustainability Strategy

We are driven by a purpose to improve the quality of life for people all over the world through our diagnostic solutions – providing vital health information when and where it is needed 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.

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

Through our corporate actions in the areas of environmental sustainability, social responsibility, ethics, corporate and ESG-related governance, and supply chain responsibility, we seek to positively impact our communities and stakeholders while driving value for our stockholders.

Information Available on Our Website

This Annual Report and each of our other periodic and current reports, including any amendments thereto, are available, free of charge, on our website, www.quidelortho.com, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”).

From time to time, we may use our website as a channel of distribution of material information related to the Company.

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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