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Steve Tang, OraSure's biome man

The new CEO looks to expand the company from collecting spit for 23andMe and WuXi, to "developing a gold standard family of microbiome products" worth millions, this year.

Stephen S. Tang, PhD, MBA, headed the University City Science Center through its rapid growth in 2008-18, and then was named CEO of OraSure in Bethlehem, Pa.
Stephen S. Tang, PhD, MBA, headed the University City Science Center through its rapid growth in 2008-18, and then was named CEO of OraSure in Bethlehem, Pa.Read moreUniversity City Science Center

Investors expect big things this year from OraSure, the 400-person, Bethlehem-based saliva-testing company.

OraSure profits totaled $23 million last year on sales of $167 million, up from $20 million on sales of $123 million the year before. The stock, public since 1989, trades at a fat 50 times earnings with shares recently around $18, down from a peak above $22 last fall.

OraSure is best known as the maker of the saliva collector used to stabilize and ship genetic samples from your home or doctor's lab to 23andMe, the gene-testing company that tells you where your ancestors may have been from; WuXi NextCODE, an affiliate of the China-based WuXi AppTec, whose WuXi Biologics unit has been expanding for the past 10 years at the former Philadelphia Naval Base labs; Helix; WeGene; and other gene-testers.

"High expectations" for OraSure sales growth this year focus on two products — HIV self-testing and DNA Genotek, the gene-testing technology and brand OraSure acquired in 2011 — writes analyst Nicholas Jensen in a report to clients of Raymond James & Associates. The company enjoys a "growing cash pile" and steady growth — plus a new CEO, Dr. Stephen Tang, the former University City Science Center head named to run the company after March 31.

Tang will head a "strategic refresh" — reviewing business units to see "whether they all currently fit within the organization" — when he replaces Doug Michels, who is retiring, at the end of this month. The company's previous plan was supposed to run until 2020, but Tang's job is to speed OraSure to a sharper focus and bigger profits for investors.

Ron Spair, who served in the unusual and demanding joint role of chief financial officer and chief operating officer is leaving, too. Tang will hire for both jobs separately, which Jensen takes as a good sign the company is serious about scaling up to its investors' high expectations. The largest shareholders are BlackRock and Vanguard, both of which hold OraSure in active as well as indexed funds.

On a visit to OraSure Monday, Jensen writes that Tang's "methodical" approach has "increased confidence" that he's the "right individual to catalyze the next growth phase of the company, with M&A likely playing a role."

New products OraSure is developing include "collection technologies for microbiome samples," which test our bodies for combinations of bacteria and other life that National Institutes of Health-sponsored research has found might have commercial applications for "human health and disease" (including the recent hipster experiment of not bathing to encourage the growth of "natural" human microbiomes); a skin-microbeme collector; and a "specimen collector for sputum samplers" that would make it easier to confirm tuberculosis as that lung scourge resurges.

"OraSure is committed to developing a gold standard family of microbiome products, and expecting to generate $6M in revenue" from sales in 2018, Jensen writes. "The company is ready to take on significant volume increases."