Ortho Clinical Diagnostics Holdings plc (OCDX) Q4 2021 Earnings Call Transcript

Ortho Clinical Diagnostics Holdings plc (OCDX)
Q4 2021 Earnings Call
Feb 16, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to Ortho Clinical Diagnostics fourth quarter and fiscal year 2021 earnings conference call and webcast. [Operator instructions] Please note, this conference is being recorded. [Operator instructions] I would now like to turn the call over to Bryan Brokmeier, vice president of investor relations. Bryan?

Bryan Brokmeier -- Vice President, Investor Relations

Thank you, operator. Good afternoon, everyone, and welcome to the Ortho Clinical Diagnostics fourth quarter and fiscal year 2021 earnings conference call. With me today to discuss our financial results are Chris Smith, Ortho's chairman, and CEO, and Joe Busky, Ortho's chief financial officer. Mike Iskra, our EVP of commercial excellence and strategy, will join us for the Q&A portion of the call.

This conference call is being simultaneously webcast on the investor's section of our website. A version of today's presentation can be downloaded there. Before I begin, I will cover our safe harbor statement. Some of the statements we will make during today's call about the company's future expectations, plans, and prospects constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides the harbor from such statements.

Our use of forward-looking statements is subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our current expectations. These risks and uncertainties include, but are not limited to, those factors identified on Slide 2 of today's presentation and in our other filings with the SEC. Please refer to our SEC filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. We cannot assure you that the forward-looking statements we make will be realized.

We undertake no obligation to update any forward-looking statements to reflect future events, developments, or changed circumstances or for any other reason, except as required by law. Also during today's call, there will be a discussion of some items that do not conform to U.S. generally accounted accounting principles -- generally accepted accounting principles or GAAP. Please see Slide 3 for a list of these non-GAAP measures, including, but not limited to, core revenue, constant currency, EBITDA, adjusted EBITDA, adjusted free cash flow, and adjusted diluted earnings per share.

Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in the appendix to the investor presentation and press release issued this afternoon, both of which are available in the investor's section of the Ortho website. In addition, on today's call, we will refer to our core and our non-core business, our Clinical Laboratories, also known as Clinical Labs and transfusion medicine businesses represent our core business. Our noncore business is comprised of our contract manufacturing and licensing revenue. Lastly, unless stated otherwise, all year-over-year revenue growth rates, including revenue growth ranges given on today's call are given on a comparable constant currency basis.

Now I'd like to turn the call over to Chris Smith, Ortho's chairman, and CEO. Chris?

Chris Smith -- Chairman and Chief Executive Officer

Thanks, Bryan, and good afternoon, everyone, and thanks for joining us for the call today. It's great to be with you and to be able to share the fourth quarter results as well as the full year results for 2021. We're going to start on Slide 4, and I always love to start with this slide because the submission statement, it's our credo because every test is a life. This is why we do what we do every single day, and we embrace this credo as a whole leadership team and our company worldwide as we go to work every single day.

Just to give you an example, today, we'll help over 800,000 patients around the world. And I just want to thank our teammates, in particular, in all our professional customers out there that we partner with. With that, let's get into the fourth quarter results, which starts on Slide 5. First off, we have broad diagnostics portfolio.

So COVID assays have not been a meaningful factor on our business throughout the pandemic as it has been for some companies. That said, we only generated $68 million of COVID assay revenue in 2021. Consequently, COVID was approximately four percentage point headwind on the growth in the fourth quarter and 1% headwind for the full year results. Given that today we will largely focus on the underlying base business, which excludes COVID assay revenue.

Core revenue, excluding COVID assay revenue grew 8% and with particular strength in our Clinical Labs business, including a 4% headwind from the COVID test, our core revenue grew 4% in constant currency to $519 million. In addition to the underlying strength of our revenue, adjusted EBITDA margins of 24.6% is down about 130 basis points, reflecting an estimated 230 basis points of headwind in from the decline of this high-margin COVID assay test revenue compared to prior year. Looking at the full results on Slide 6. Core revenue, excluding the COVID assay revenue, grew 16% with strength in both our Clinical Labs and our transfusion medicine businesses, including a one percentage point headwind from COVID test for the year, our core revenue grew 15% in constant currency to just over $2 billion, a huge milestone for the company.

Adjusted EBITDA grew 20% to $548 million, representing margin expansion of 100 basis points to 26.8% despite an approximately 60 basis point of headwind from the decline in this high-margin COVID assay revenue. In summary, we concluded the year with another excellent quarter, demonstrating the strength and stability of our reoccurring revenue business model in our base business. This continued revenue momentum in our business is a clear result of the strong execution by our global commercial teammates and their dedication to customers and patients they serve. We talk about the importance of lifetime customer value and the long-term relationships that we build with our customers.

We believe this is resonating in the marketplace and continues to be reflected in our results. Continuing with our fourth quarter performance review, let's look more closely at the core geographies, excluding COVID assay revenue on Slide 8. The Americas, our largest geography, grew 8% with the U.S. commercial growth, excluding COVID assays being up 7%.

This was driven by strong Clinical Labs integrated system placements, menu expansion, and reoccurring revenue pull-through as well as our CTS partnership in our transfusion medicine business. In EMEA, the growth excluding COVID was 6% driven by strength across our Clinical Labs business with particular strength in Eastern Europe and Middle East in the fourth quarter. Greater China grew 8% with strength in recurring revenues, including both immunoassay, clinical chemistry, and immunohematology consumables. However, due to timing of distributor instrument placements, we had several instrument orders that did not ship in the fourth quarter.

I'll expand on this more broadly in a moment. We believe our installed base growth in China up 6% and our integrated system growth of 14% are very good leading indicators for future growth. In addition, during the fourth quarter, our MU assay business grew over 30%. We're pleased with the growth, excluding COVID assay in both our core developed markets as well as our emerging markets, which grew 6% and 12%, respectively.

Growth was particularly strong in India, Latin America, and the Middle East. Looking at our core geographies for the full year, excluding COVID revenue, the Americas, our largest geography grew 18%, with the U.S. up 16%. EMEA grew 10%, which is a significant result how that business has continued to perform incredibly well over the last 12 months, with Western Europe up 7%.

Greater China grew 12% and the other regions, which include Japan and Asia Pacific were up 17%. So really strong performance from all regions. Next, on Slide 10, we remain steadfastly focused on executing against our three strategic priorities to drive profitable growth and shareholder value. These priorities are product innovation, global commercial excellence, and operational efficiency.

We continue to make progress against all these areas in the fourth quarter. Let me cover some of the highlights. Beginning with product innovation. As we discussed last quarter, we received emergency use authorization in the U.S.

for our quantitative COVID spike antibody assay. We're seeing emerging adoption for testing convalescent plasma, which has created an incremental growth opportunity beginning this year. Though we still expect COVID-related revenue to be a headwind on our '22 revenue growth, we believe this new growth avenue is meaningful. Longer term, there are multiple studies underway to advance our understanding of COVID immunity, including immunity from infection, immunity from vaccination as well as immunity from different variants.

Notably, we're collaborating with academics and government agencies to develop studies to enable broader clinical utility of our quant assay. Turning to our second priority, global commercial excellence. We continue the implementation of our commercial excellence program and our growth strategy, which is driven by the penetration of -- in the market with our integrated analyzer systems and the pull-through of this reoccurring revenue. Our integrated installed base continued to grow double digits through 2021, and our reoccurring revenues ended the year up 93% of our total revenue.

And finally, our third priority, operational efficiencies. Thanks to the strong revenue performance and the execution by our entire team throughout 2021, we further reduced our net leverage in the fourth quarter to 3.6%, and this is from 7.9% at the time of our IPO last February, an incredible result. Lastly, I'd like to comment on industrywide supply chain disruption. Global supply chain challenges, combined with the strength of our business over the last several quarters are putting increased demand on our supply chain.

Like most diagnostic companies, these challenges include shortage of microchips, resins, and certain plastics as well as freight and logistics costs and pressure on pricing. Our management team is working diligently on adding additional suppliers, managing the ongoing flow of raw materials and the distribution challenges, including spot rates. Though our financial performance has remained strong, we are managing instrument allocation at a regional level, and this has pushed out delivery of our instruments to some customers. We closed the fourth quarter with our installed base growth of 3%.

However, if we had shipped all the open orders on instruments, it would have been 5%. Turning to Slide 11. I'm really excited to talk to you about the proposed transaction with Quidel as announced on December 23rd. The HSR waiting period recently expired and other regulatory approvals and closing conditions are progressing.

And we believe that the transaction remains on track to hold our shareholder votes and close in the first half of 2022. As we said at the time of the announcement, we believe bringing Quidel and Ortho together creates a leading global diagnostics company with the ability to offer long-term value to patients, customers, teammates, shareholders, and the communities in which they serve. While the transaction is structured as an acquisition of Ortho, these are two similar-sized companies, and the leadership and the employee base will be a mix of both companies. So strategically, we're coming together more as a merger of equals, structured in a way that enhances growth.

Since the announcement, we've spent a lot of time talking with key stakeholders and are confident as ever this exciting combination represents the best path forward for Ortho and its shareholders. I'd like to take this opportunity to share some insights from the combination of the two companies. First, on revenue visibility -- excuse me, first, the revenue visibility of the combined company, as you know, Ortho has a very stable and predictable business model, driven by reoccurring revenues of 93%, usually five- to seven-year contracts and our lifetime customer value that represents our 98%-plus revenue retention rates. As you know, Quidel currently realizes a significant amount of its revenue in the U.S.

Quidel's business has historically been heavily tied to the U.S. seasonal flu and more recently to the COVID trends, even as it's added new menu and test platforms such as the Savanna molecular platform that would drive a new leg, a diversified growth. Like many experts and analysts are predicting, we expect COVID to be endemic and be managed much like seasonal flu going forward. So while the need for COVID testing will go away, we are projecting a more conservative view of COVID testing volumes, and we're anticipating these volumes will stabilize at a level that is meaningfully lower than where we are today.

When the volumes do stabilize, we expect testing to consist mostly of respiratory panels that includes COVID and flu. And we also believe that the global diversification of Quidel's revenue stream through the global reach of Ortho's commercial team and the penetration of hospital segment with the new Savanna molecular product will provide further visibility and stability in the combined companies' revenues. Second, on the growth potential. We believe shareholder value will be enhanced by the combination of Quidel and Ortho establishing a diagnostic company with enhanced competitive position, expanded global presence, and robust product offering, serving a wide range of customers and markets with a total addressable market of approximately $50 billion.

We believe the company's highly complementary world-class products and service offering will provide opportunities to capture significant growth globally through Ortho's commercial footprint in 130 countries and approximately 2,300 field teammates while enhancing cross-selling opportunities across a diversified customer and channel mix. Let's look at Quidel's new Savannah rapid multiplex molecular platform, for example. This is a differentiating product that is easy to use, one of the fastest time to results, has a small laboratory footprint, has significant cost advantages compared to competitors, and has a range across point-of-care in clinical labs, particularly in the mid-to high-throughput labs that are already Ortho's sweet spot, where our commercial excellence program has driven ongoing growth. By using our global regulatory expertise and putting that platform into the hands of our global commercial team and supporting those placements with our broad service engineers, we believe we will accelerate the launch of this compelling rapid testing platform in both hospitals and point-of-care call points.

The transaction is expected to generate substantial synergies on both top and bottom lines. We estimate that the combined company will realize $90 million run rate cost-related synergies, excluding one-time costs, by the end of year three, driven primarily from operational efficiencies, supply chain optimization, and shared administrative functions, including public company costs. In addition, given Ortho's enhanced global commercial reach and expansive product portfolio, Quidel expects to drive cross-selling synergies in excess of $100 million by the end of fiscal 2025 and a meaningful adjustment to EBITDA. Third, the combined company will have a broad product portfolio and a pipeline which is best-in-class from a technology perspective.

Ortho is well-positioned in the Clinical Labs and transfusion medicine markets with our dry side technology. Quidel is a leader in point of care, and was very successful during the COVID pandemic, delivering significant growth in their installed base of the Sofia instruments. Their QuickView COVID over-the-counter test is sold and drug stores all across the country is making a significant impact as we treat this pandemic. And I just discussed their Savannah rapid multiplex molecular platform.

The combination of these portfolios position us to be a provider of choice for both centralized and decentralized labs and testing looking for clinical chemistry, immunoassay, and molecular solutions. Fourth, we're making great progress on the integration planning. I've been able to spend a lot of time with Doug, Quidel's president, and CEO over the last eight months, and he has been in this diagnostic industry for 40 years and knows the space incredibly well. In addition to Doug, other key executives of the combined organization have already been identified, including Ortho's CFO, Joe Busky; and Mike Iskra, who will be the chief commercial officer in the new business.

The integration process will be complex. However, we're purposely delineating roles between focus group driving integration, planning, and the majority of our business leaders and colleagues who will stay focused on the execution of our stand-alone strategies. We have engaged a well-known third-party consultant to support pre-closing integration planning, and we'll be tapping into the expertise of employees from both Quidel and Ortho to help plan and execute the integration through functional integration teams. There is little integration required in the commercial organizations given that the U.S.

focus of Quidel and the global focus of Ortho, which should be minimized -- which should minimize our commercial disruption, especially to our customers. There currently aren't areas with known integration complexity like manufacturing, consolidation or closing plans, etc. While we are currently operating as completely separate organizations, we feel confident in the clear integration path that these two complementary companies have, and we will move swiftly to execute the integration once we have closed the transaction. I look forward to continuing to advise the executive team as a member of the board of directors of the new company as well as being a special advisor to Doug and the board.

Lastly, the combination of the two companies creates a great business going forward. We'll have 9% to 11% growth profile, ex-COVID, greater than 30% EBITDA margins and more than $700 million in annual cash flow generation, and a very, very strong balance sheet with pro forma net to debt-adjusted EBITDA of about two times at closing after accounting and financing for the transaction. And looking at the largest IV companies in the world, this combination of these two companies make us one of the most competitive and financially strong companies in the industry. And as you can tell, we're really excited about it.

With that, I'll turn it over to Joe to further discuss some of our financial results. Joe?

Joe Busky -- Chief Financial Officer

OK. Thanks, Chris, and good afternoon to everyone on the call today. I'll begin with a bit more detail on our operating results for the quarter, starting with a breakdown of our fourth quarter revenues on Slide 13. In the fourth quarter, we recorded total revenue of $521 million, which is an increase of 2% in constant currency.

Currency translation decreased sales growth by 80 basis points, resulting in approximately 1% sales growth on a reported basis. Core revenue, which excludes contract manufacturing and other licensing revenue increased 4% on a constant currency basis to $519 million. And excluding a 370 basis point headwind from the COVID assay sales, core revenue growth was up 8%, primarily driven by the strong recurring revenue pull-through on the instruments we placed over the last couple of years across our geographies in both Clin Labs and TM segments. Now turning to our Q4 performance by line of business.

Clin Lab's revenue grew 5% in the quarter, largely driven by strength in both Clin chemistry and immunoassays. In the TM segment, we grew 4%, driven by strength in the U.S. and China. As a reminder, the fourth quarter growth also benefited from our new partnership with CTS, which was a new customer in 2021.

The non-core revenue in the fourth quarter actually declined to $2 million from $16 million a year ago due to the completion of certain contract manufacturing arrangements on the collaboration agreement in fourth quarter of '20. Looking ahead, we expect noncore revenue to be in the $3 million to $5 million per quarter range. Turning to Q4 core performance by geography, on a constant currency basis, Americas revenue increased 2% with the 2% in the U.S. Excluding COVID assay revenue, however, Americas was up 8%, EMEA grew 3% with 17% growth in the Middle East Africa emerging market.

Western Europe was about flat year over year, excluding COVID assay revenue. Greater China grew 8%. And other segments, which includes Japan and other Asia Pacific markets grew 10%. Now looking at our Q4 revenue by category, recurring revenue, which includes reagents, service, and other consumables grew 6%, driven by strength in both Clin chemistry and immunoassays as well as the screening market.

Instrument revenue actually declined 19% in the quarter due to the instrument supply chain challenges Chris mentioned earlier. Turning to Slide 14. For our full year 2021 revenue results, we recorded revenue of $2.43 billion, an increase of 14% in constant currency. Currency translation increased sales growth by 150 basis points, resulting in 16% sales growth on a reported basis.

Core revenue increased 15% on a constant currency basis to just over $2 billion. And excluding the 110 basis point headwind from COVID assay sales, core revenue growth was up 16%. Turning to the full year performance by line of business. Clin Lab's revenue grew 15% and transfusion medicine grew 13%.

Noncore revenue in the full year declined to $28 million from $31 million a year ago. Looking at full year core performance by geography. On a constant currency basis, Americas revenue grew 15%, including 13% growth in the U.S. Excluding the COVID assay revenue, Americas was up 17%; EMEA grew 12%, including 10% growth in Western Europe; Greater China grew 12%, and other segment grew 16%.

And lastly, for the full year '21, looking at our core revenue by category, revenue -- sorry, recurring revenue, I should say, which includes reagent service and other consumables grew 15% and instruments grew 13%. Now turning to Slide 15. I'd like to comment on our fourth quarter and full year financial performance versus the prior year. We delivered another solid quarter performance below the top line with improvement to gross margin, operating expenses, and free cash flow in the quarter.

Gross profit margin for the fourth quarter was 50.5%, which is a 40 basis point increase due to currency translation, volume, and base business mix, partially offset by a 180 basis point headwind from high-margin COVID assay revenue. Additionally, within both cost of sales and operating expenses, we have seen higher spot air freight rates as we have previously discussed. This trend continues, but we are actively managing and monitoring the situation. On a full year basis, gross profit margin was 50.7%, a 210 basis point increase, mostly due to currency translation, volume, and lower manufacturing costs.

Moving down the P&L for the fourth quarter. Sales, marketing, and administrative as a percent of revenue increased 30 basis points to 27.7%, and R&D as a percent of revenue increased 70 basis points to 6.7% as we continue to invest in our test menu and new platforms, most notably our Dry-Dry platform. And for the year, despite an increase in public company costs, sales, marketing, and administrative expense as a percent of revenue decreased 50 basis points to 27.2%, and R&D as a percent of revenue decreased 20 basis points to 6.2%. Excluding the $7.5 million upfront payment to Quotient in 2020 however, R&D as a percent of revenue would actually have been up 20 basis points.

Looking at adjusted EBITDA margins. We had 24.6% margin for the fourth quarter, and it's down 130 basis points, including an estimated 230 basis point headwind from the decline in high-margin COVID assay asset revenues. Margin expansion, excluding COVID assay revenue, is therefore 100 basis points better and is underpinned by positive base business mix, efficiency improvements, and the successful execution of our value capture program. For the year, adjusted EBITDA margin of 26.8% is up 100 basis points and would have been up 160 basis points excluding the decline in high-margin COVID assay revenue.

Net interest expense for the quarter was $33 million, a decrease of $16 million as anticipated due mainly to lower average outstanding debt balances. Our provision for income taxes was $5 million of expense in the quarter, compared to a benefit of $11 million in the year-ago quarter. For the full year, net interest expense was $146 million, a decrease of $52 million, and our provision for income taxes was $26 million of expense, compared to a benefit of $13 million in 2020. Our adjusted earnings per fully diluted share for the fourth quarter decreased $0.01 year over year to $0.18, including a $0.06 year-over-year impact from the previously mentioned COVID headwind as well as a negative $0.07 impact from the increase in our share count resulting from the February 2021 IPO.

Our adjusted net income actually increased 47% year over year, driven by our solid operating performance as well as lower interest expense. And so excluding the COVID assay testing and normalizing the share count for the IPO, our Q4 EPS would have been up $0.12 versus the prior year. On a GAAP basis, we reported a net loss per share of $0.04, compared to a net loss per share of $0.28 in Q4 of 2020. For the full year, our adjusted earnings per fully diluted share increased $0.46 year-over-year to $0.80 despite a negative $0.13 impact from the increase in our share count resulting from our February IPO.

Our adjusted net income actually increased 266% year over year. Normalizing the share count for the IPO, our full year adjusted EPS would have been up $0.59 versus the prior year. On a GAAP basis, we reported full year net loss per share of $0.24, compared to a net loss per share of $1.45 in 2020. Now looking at free cash flow, capital deployment and balance sheet on Slide 16.

In the fourth quarter, we generated $73 million in adjusted free cash flow after funding $31 million in capex. For the full year, we generated $260 million in adjusted free cash flow after funding $58 million in capex. Our days sales outstanding came in at 46 days, an improvement of 16 days compared to the fourth quarter of last year. Now this includes the securitization of $75 million of our U.S.

AR and off-balance sheet transaction as discussed in prior quarters. And without the benefit of this financing transaction, our DSO still would have improved by three days compared to the fourth quarter of last year. And our strong cash generation enabled us to continue to deleverage our balance sheet and reduce our net debt-to-EBITDA ratio to 3.6 times, down from 3.7% at the end of Q3 and down from 7.9% at the time of our IPO in early '21. We ended the quarter with net debt of $2 billion, including cash and cash equivalents of $310 million.

We continue to expect to reduce this leverage ratio by at least a half-turn a year going forward as we move toward a more normalized leverage range of 2.5 to 3.5. Lastly, turning to Slide 17, I want to make a few comments on our outlook. So given the pending combination with Quidel, we are holding off on providing detailed guidance until the transaction closes. However, I'd like to provide you with some directional color on how we're viewing market conditions.

Clin Labs utilization trends are expected to improve as we move through 2022. Transfusion medicine markets have still not fully recovered to pre-COVID run rates as global blood supply shortages persist and labs remain focused on funding the pandemic. We expect China to grow low double digits in both the first half of '22 and second half of '22, but due to instrument supply timing, we expect China's growth to be about flat in the first quarter of 2022. And then lastly, inflation and global supply chain disruptions are interconnected as supply chains have not been able to catch up with the strong demand for our products.

This certainly is not unique to us, and we're seeing these impacts across transportation costs, labor, manufacturing, and commodities. These supply chain challenges are most acutely affecting our instrument placements, as Chris mentioned earlier. And through ongoing actions we discussed on the third quarter call, we expect the instrument supply chain challenges to moderate in the second half of the year, and we expect our integrated installed base to continue to grow double digits each quarter in 2022. In light of these dynamics, we expect 2022 core revenue, excluding COVID assay revenue will increase at mid-single-digit growth rates on a constant currency basis.

In addition, I'd like to provide assumptions that will be helpful for modeling purposes. We expect our COVID assay revenue to be in the range of $25 million to $35 million in 2022, compared to the $68 million we did in 2021, representing 150 to 250 basis point headwind on total company core growth. And at current FX rates, currency translation is expected to negatively impact sales growth by about 50 to 100 basis points. There are no differences in the number of billing days in 2022 compared to 2021.

Next, given that our contract with CTS went live in Q1 of 2021, we expect growth in our TM business to normalize to be more in line with the market in 2022. We expect full year sales, marketing, and administrative expenses to grow at a rate slower than sales. And as we've been saying all through 2021, for every percentage point of core revenue growth, we expect our adjusted EBITDA margin to grow by 1.2 to 2 times, excluding COVID assay revenue. Net interest expense is expected to be in the range of $120 million to $130 million, with most of the decrease from the fourth quarter run rate to be in the second half of 2022.

Cash taxes are expected to be about $25 million, and we expect to generate approximately $200 million in free cash flow. So with that, I'll turn the call back now over to Chris to make some summary comments.

Chris Smith -- Chairman and Chief Executive Officer

Thanks, Joe. And look, just in summary, I just want to kind of talk about kind of how things finished the year. It really was an amazing year for the company where our core revenue grew 15%. And really that base business or excluding COVID, we grew 16%.

As Joe mentioned, we're expecting mid-single digits growth ex COVID related going forward. And we really are excited about what the acquisition of Quidel means to both those companies because we think it does create significant upside for everyone. And on that, let's Bryan move it back to you, and we will move to Q&A. Thank you.

Bryan Brokmeier -- Vice President, Investor Relations

Operator, we'll take the first question.

Questions & Answers:

Operator

Our first question comes from Tejas Savant with Morgan Stanley.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Tejas, h you doing?

Unknown speaker

This is Neil on for Tejas. Doing well.

Chris Smith -- Chairman and Chief Executive Officer

Good. Good.

Unknown speaker

Starting with the Quidel transaction, is there anything you started working on to perhaps to the integration had to close?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, Mike and Joe are in the room. And I would just tell you, I mean, I think that we -- I would say one of the biggest things we did is we took one of our best executives, the gentleman that ran the IPO, Bob and he's running the integration team for us. We pulled them out of his day job, and he's on this now in 24 hours, seven days a week.

But Mike and Joe, do you guys want us a little bit how you're partnering with Randy and Rob. So there's two executives from our side, Mike and Joe, and two from the Quidel side that are working hand-in-hand on that. But do you want to talk a little bit about where you guys are going and what we're doing on the integration?

Joe Busky -- Chief Financial Officer

Yeah. Sure. Sure. So we have a steering team, which is comprised of Doug, Randy, me, and Mike, and Rob.

And then below that, there are two leads on each side, Chris has mentioned, the lead on our side and the Quidel side as equally talented person on their side leading. And then we've got functional leads below that. And so there's been several meetings so far. We brought in a service provider to help us stay on track with the integration process.

And I would say it's gotten off to a very, very good start. We've identified most of the day one deliverables. And we're just driving toward meeting all those needs.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. I think that being said, while we're going to have a dedicated group focus on it, and really helping to work -- do those workstreams, it's also important that we continue to run the day-to-day business. And so that's why I think we're carving out specific people and subject matter experts or super users to be on that team.

Unknown speaker

Got it. Very helpful. And then a quick one on China. Have you seen any recent impacts from zero-tolerance COVID policies such as site access issues?

Chris Smith -- Chairman and Chief Executive Officer

We really haven't as of yet. I mean, I know that -- I think what happens in China, you'll see these one-off things happen like last quarter was the tender in one of the provinces and it really didn't impact it. And we really haven't seen an impact to our business yet. Our business continues to do really well there.

I mean, you saw the growth on the integrated placements, up 30%. I think there -- recently it was a little bit of a challenging quarter was the shipment of instruments, but mainly to distributors. Because remember, in that market, we really almost go through box movers. So our staff will go into a distributor and then go out.

So very different shipping instrument into a hospital, for example, in the U.S. where we have a G3 account where we won a competitive bid there. We have -- we're really backfilling inventory with distributors. So -- but we haven't really seen an impact there on the zero policy.

Unknown speaker

Got it. And while we're on the topic of geographies. Can you tell us about your progress and how it's evolving in high-growth regions like India and Latin America? I think, for example, last quarter, you mentioned share gains over large multinationals in India, driven by your

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, I always feel like I planted that question with you. So just to give you an idea, I mean, Latin America for the year was up 21%, up 27% in the quarter. Seeing incredible growth in Brazil, over 30% for the year.

Mexico, over 20% for the year. So I'd say Latin America continues to do really well. And we have an amazing leader down there running that business. And I would say for emerging markets is at the front end of the integrated strategy, and we're really seeing that nice pull-through.

If you go over kind of the India, just to give you an idea, we grew over 50% this year in India. It was amazing growth. Like I think the 50% maybe shakes you. So what we do is we go back and compare it to 2019, our growth in India from compared to 2019 is up 26%.

So I mean, just continued robust growth in these emerging markets where the teams, I think, are really doing a great job executing. And then I think Mike bringing these what we call edge internally, but these commercial excellence programs in and helping to optimize the sales force has really gotten this really nice pull-through.

Unknown speaker

Got it. And then just one last one for me, switching topics again. So how should we be thinking about the potential contribution from the antibody spike assay? And with expectation for assay sales for COVID, how should we also be thinking about your previous expectations for a notable headwind to gross margin expansion this year?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. We did talk about the headwind. But Joe, do you want to talk about a little bit how you see that impacting financials in '22?

Joe Busky -- Chief Financial Officer

Yeah. I mean, we're expecting, as I said in the prepared remarks, we're expecting the COVID assay revenue for '22 to be in the $25 million to $35 million range. So it's going to be about 150 to 250 basis headwind on the top line. It will have an impact for sure on the gross profit expansion and EBITDA expansion.

But again, if you look at the gross profit and EBITDA line post COVID or ex COVID, we'll still hit those expansion numbers that we've talked about. But maybe I'll let Mike talk a little bit of that 25% to 35% kind of how that -- of revenue, how that's going to play out in 2022.

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Yes. Thanks, Joe. I think one of the things for us to just continue to communicate, COVID is very unpredictable, hard to forecast. So as we've done, I think we aligned on a number we feel comfortable within the financial forecast.

But I don't think that fully reflects what our true efforts are. We have a number of studies underway as Chris mentioned in the commentary. We see opportunity for the quantitative antibody test that's out there. And so we'll continue to push on that.

I mean, most recently, a good example is that we've seen sort of reemergence in the U.S. for convalescent plasma. We've played a big role in that -- testing for that over the number of years, leveraging our great partnerships with donor screening customers. And so that may continue to be an opportunity, not just through the omicron variant, but others to come.

So we continue to invest in those things and a few things go one way or the other, there could be upside to those numbers.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. And I think especially around this quaint, I mean there's a day where people are going to want to know what their immunity levels are. And that's why I talked about the clinical trials, which really need to come in front of the sales, but working closely with some government agencies and some large university hospitals on clinical trials that really give you what do you do with that quantitative number on immunity once you know it. And I think, especially as you think about is there going to be another vaccine nine months from now? Are you -- when do you get that vaccine? How do you test? And so look, again, I think we've always been conservative on COVID.

We'll continue to be conservative on the COVID number, but some of these things hit in '22, it would be incredibly helpful.

Operator

Our next question comes from Vijay Kumar with Evercore ISI.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Vijay.

Vijay Kumar -- Evercore ISI -- Analyst

Hey, guys. Hi, Chris. Thanks for taking my questions.

Chris Smith -- Chairman and Chief Executive Officer

Sure.

Vijay Kumar -- Evercore ISI -- Analyst

Two for me. Just maybe one big picture, Chris. On the deal, you did mention our shareholder approval coming up in the first half. Look at the stock price here, it's well 12 below [Inaudible] price 30% below.

Perhaps some of it is the market. I'm just curious how should we think about this shareholder work upcoming to clinical and getting the approval? And what is the investment community missing for just on this transaction on Quidel?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, Vijay, I know you've been following the company since the IPO, and I think you really do a nice job of digging into the business. And I think you're probably a surprise as we are with the share price and where investors have viewed this deal. I think strategically, candidly, I don't think there's a better deal out there.

I mean we're a unique market leader in the central labs, especially what I would call these kind of 250 bed to 500-bed hospitals, everything if you look at Quidel, one of the world leaders in point of care, which really doesn't have a distribution arm outside the United States, which we now bring them. And I think testing is going to become more and more decentralized. And for us, having a new platform, a molecular platform. So look, I think strategically, it makes a lot of sense.

Look, as far as a shareholder vote, I will tell you, look, we're doing calls with individual shareholders, both Doug and I, with our teams to kind of try to walk through the strategy. Sometimes, when something like this happens, it takes telling the story one or two times for people really to understand it. And look, that's on us to make sure that they really understand the strategy. But I think you had two very different companies.

You had a high-growth company with no debt, and you had us, which is really more of a predictable mid-single digits company with a lot of debt. And so if you love the high growth no debt or you love the other one, you may not like it. And so I think part of it is just educating the financial markets. Look, COVID's made it tough.

I would have loved to -- and we still are trying to do this, get us all on an airplane or in a Winnebago and go out and do a roadshow and sit in front of people and we have them a chance to talk about it. But I think it's been more about an education process because when you really look at the strategy, I don't know if there's a better deal out there.

Vijay Kumar -- Evercore ISI -- Analyst

That's a helpful perspective, Chris. And Joe, maybe one for you. The guidance, you did mention some supply chain impact. Is the guidance taking any top line impact or any gross margin impact? Because I look at this operating leverage, there is some EBITDA expansion.

I'm curious, is that coming from gross margin? Or is that perhaps more opex-driven in fiscal '22?

Joe Busky -- Chief Financial Officer

Yeah. Vijay, the outlook that I just gave in the prepared remarks is inclusive of these supply chain challenges that we've talked about today and on the last quarter call. We believe that the way we are managing the challenges and cutting costs in other areas and passing on the increased cost to customers where we can, that we can still hit the guidance that we've talked about for the last year or so, which is mid-single-digit top-line growth ex COVID and EBITDA expansion in the 1.2 times to 2 times that revenue expansion. We still feel pretty good about that.

And so once the deal closes, we will give more granular and more specific guidance for 2022. But we feel pretty good about the long-term guidance we've given out for the last 12, 13 months and sticking with it as we move through '22 despite the supply chain challenges that we've talked about.

Vijay Kumar -- Evercore ISI -- Analyst

Thank you, guys.

Operator

Our next question comes from Tycho Peterson with J.P. Morgan.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Tycho.

Tycho Peterson -- J.P. Morgan -- Analyst

Hey. Chris, can you talk a little bit about customer feedback on the deal? Any difference from IDNs versus traditional hospital labs in terms of excitement and areas of pushback? How is it resonating with your out talking to customers?

Chris Smith -- Chairman and Chief Executive Officer

Yeah, Tycho. I think the place where I've heard the best comment has been around the Savannah and the molecular opportunity that we're going to have. I think if you think about a lot of molecular, which used to be outsourced, a lot more hospitals are especially post-COVID bringing that in. So I think there.

I would say the second component is the service that we're able to bring. So a lot of these molecular companies don't have the service organization that we have. And so I think that has created a positive. I probably have not had as much on point of care.

Mike's here, too. Mike, do you want to talk a little bit about any other additional customer feedback you guys have been getting?

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Well, I think in general, it's all positive. Again, the biggest overlap in the U.S. Quidel is very well known, very strong, and does a nice job with their business as do we. I think there's certainly an opportunity for a customer to take that combined experience.

And we're seeing the fact that they would like to purchase all those products through one company will have, right, that's a benefit. Ex U.S., what we see is a lot of our customers that we've talked to, really, as Chris said, like the idea of accessing new products that they may not get from us today and some products may not be available in their market yet. So all in all, I think it's a good reception from customers. I think as always, customers, some of the feedback that I would say we listen to are is they're concerned about distraction and disruption, which I think comes back to one of the points that both Chris and Joe made, both companies have agreed that we're going to limit who's involved in integration upfront so that the vast majority of our people are not distracted.

I think that will be important. So we recognize that need. I think we're doing all we can to meet it.

Tycho Peterson -- J.P. Morgan -- Analyst

And then thinking a little bit about the synergies here. Any updated thoughts on kind of putting over some of their content to your products and vice versa? Is that factored into any of the synergy targets? And then I think you mentioned on manufacturing, you haven't planned on real consolidation here in the near term, but how are you thinking about that opportunity long term?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Mike, why don't you take that?

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Sorry, could you repeat the second part of your question? I got the first one.

Tycho Peterson -- J.P. Morgan -- Analyst

Manufacturing and maybe leveraging their facilities as COVID demand drops down.

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Yep. So Joe, you may want to talk about the manufacturing piece. I'll take the first piece. When you think about the synergies we talked about on the cost side and the revenue side and the combination the company, that's really taking what's in play today with both companies, leveraging each company's footprint, commercial capabilities, product portfolio.

What you don't see, and I think you touched on that, I think, is a real upside is when we put the two R&D companies together and one that's been talked a lot about is when you look at our dry slide format, its ability to play in a point-of-care space in a decentralized testing space and you look at Quidel's ability to deliver instruments -- manufacturing instruments that fit that space, we see that as a real opportunity. Those are all upsides. We did not bake them in. Those are things that we will be looking at implementing a post-close and I think are future opportunities.

Joe Busky -- Chief Financial Officer

And then, Tycho, this is Joe. On the manufacturing part of your question, I know this is a question that Doug and Randy have gotten as well on investor calls. And we think the same and there's no plan at this point to create synergies through manufacturing. That's not part of the $90 million.

However, down the road as we continue to pull these businesses together that are very well may be an opportunity there. But at this point, there's nothing really in the

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, I would say the one, Tycho, which may be interesting is we've started the process in India with our follow the sun kind of shared service centers. So we'll now think about that globally of the two companies. And we are looking at a lot of stuff in China from a manufacturing.

So I think there would be some interesting stuff there. And then finally, we've been pretty clear, like our business has grown significantly fast, and we're expanding all of our manufacturing facilities. And I think when you look at that next expansion, it's a situation where Quidel has a space and we don't, we would look at doing something there, but there's nothing formal.

Tycho Peterson -- J.P. Morgan -- Analyst

OK. Thank you.

Chris Smith -- Chairman and Chief Executive Officer

Thanks, Tycho

Operator

Our next question comes from Derik De Bruin with Bank of America.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Derik.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Hey. How are you?

Chris Smith -- Chairman and Chief Executive Officer

I'm good.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

I jumped on late, so my apologies if you covered this in the prepared remarks, but --

Chris Smith -- Chairman and Chief Executive Officer

We had to push you back a little bit on the I'm just kidding. We didn't know you joined.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Yeah. So just -- so my apologies if you've covered this in prepared remarks, but we've obviously been a lot of questions on the buy China, the buy local there, and for pushback. We've seen some diagnostic companies that made some noise about this as well. Are you seeing any sort of like pressure in that market, given that there are local options for both clinical chemistry and immunoassay platforms?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, I would say there is a lot of discussion going on, on that in China. And we've been talking with government officials. I think we've talked about it before.

We have an amazing President or leader in China. So we are very far along on a couple of projects. One is an instrument. Our next kind of low-volume instrument is well under development, probably nine months under development.

And we've talked publicly about this that it will be made in half the time for half the cost. And so that has started. In addition, we have started a project with one of our largest distributors, which is an assay development company. So those two things are underway where we would bring out a number of assays with that partner.

That being said, I will say that we are in the evaluation process of this buy local, buy China and what can we do with our existing, mainly around instruments. And so there's a big workstream that's been going on probably for about three months because it is why we have not lost any business or any tenders. We believe that by the timing to the end of next year, it's going to become much more significant in all diagnostic companies are going to have to have a solution. Mike's working really closely with it.

Mike, do you have anything else to add for any of those three?

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Yes. So, Chris, I think you -- we've had a couple of initiatives underway that are now happening. We continue to monitor the situation. And what I would say is the market opportunity for us in China, despite some of these programs that we're hearing about isn't limiting the opportunity so much so that we can't accomplish what we've projected here.

But what we know is, and we anticipate is that's going to get more challenging over time. And that's why we're doing all the things Chris said. It does go across a number of fronts. It is one of our core strategic focus items that we've been working on.

So what I think the long for short is we expect we will have a presence and a capability in China that's going to meet whatever needs are required to continue to sell and grow our share.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. To give you an idea, Derik, we have 10 major initiatives for the company for the year. And China is like it literally has pulled out as one. We don't have any other region where we would have that kind of thing were as fully integrated.

And that is kind of how we're running that business there with the president of China. So we'll continue to keep you posted. But I do think it's real. And for us, it's the second-largest market, seven years from now, five years from now, it will be the largest market.

So we realize we've got to be in front of it.

Joe Busky -- Chief Financial Officer

Derek, I would just add to what these guys said just to continue on the point. A lot of our business in China goes to distributors and is sold to hospitals where there's nongovernment funding which helps in the situation where they're not following these buy local rules. And in addition, our business is big enough in China that there's lots of parts of China that aren't following these requirements. So to Chris' point a minute ago, we're really not seeing any impact to our -- just the bottom line.

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Great. Thanks very much.

Chris Smith -- Chairman and Chief Executive Officer

Thank you, Derik.

Operator

Our next question comes from Matt Sykes with Goldman Sachs.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Matt.

Matt Sykes -- Goldman Sachs -- Analyst

Hey. Good evening, everybody. Thanks for taking my questions. Kind of similar to Derik's question on China.

I mean you guys have talked about trying to replicate what you've done in the U.S. in China in terms of transitioning customers to integrate it. But I'm also curious, just given how much of your -- the value of your platform is to Quidel in the combined company, can you talk a little bit about your expansion in China and some of the new customers? And what portion of that growth that you've seen in China, which has been impressive has been from kind of existing customers purchasing more moving to integrated versus establishing new customers in China?

Chris Smith -- Chairman and Chief Executive Officer

Yes. So Matt, if you -- we didn't show it today, but we've shown this slide before, where we show the penetration rate of the integrate the analyzer, and China is actually our second-best really country region for integrated. So I think they've done a very nice job. And that's why you see things like the business there being up over 30% this quarter.

So again, I think they're following that playbook incredibly well. It's a little bit of a different model because why we have a direct sales force and we'll have 400 people direct in China, we still go through distributors. So it really is a partnership. And I would say where our growth has really occurred is moving over the last 24 months into these Tier 2 and Tier 3 distributors, which is hospitals are further away from kind of the centralized market.

So I think that has worked really well. I would say that I think one of the biggest exciting opportunities for our merger acquisition, whatever it is, is the ability to get some of these Quidel products into China and through our distribution channel in the way that that market is growing. So I'm really excited about that. I know Mike has been working really closely with Iris on some of these programs.

And it's disappointing that we haven't done an investor day because Iris was one of the ones we were going to bring in to speak at the investor day, but we haven't done that yet. But Mike, do you want to --

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

So the answer is all fronts, right? So all fronts are driving the growth. Chris, I think you hit on the big point. If you look at the immunoassay growth that's coming through, a lot of that pull-through on integrated. We've talked about a program that China does.

Again, in those top-tier hospitals, we are in the stat lab. And part of the team's effort there is move testing where the laboratory and the clinicians can benefit from faster turnaround time to the stat lab on some key immunoassays and the team is executing well. So that's driving growth, same-store sales. Again, as the market expands, we're pushing down into those tiers where we can move from a stat lab to a routine player.

And if you look at where the development and opportunity is coming from in China, they're pushing out more care into the communities, which really moves for Ortho, moves a lot of that size testing to what we call our sweet spot. So we believe there's a lot of opportunity for us still there. And now we come back to put out question, that positioning in the stat labs is a great spot to be when we take a look at the Quidel portfolio of products. So one last area of focus for us is we have some differentiation ability in pediatric and geriatric.

And so one of the opportunities there was a focus on maternity hospitals being built. We have a good value proposition there that we expect is trimming to some of our growth, and we'll continue to help that in the future.

Matt Sykes -- Goldman Sachs -- Analyst

Great. And just one quick follow-up. I know you guys talked about $100 million in cross-selling synergies by 2025. Have you guys talked about what portion of that would be international or broken that down anymore in terms of regional contribution to the synergies?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. I don't think we've declared the percentages, but Mike worked really closely with that. We brought in an outside consulting firm as we went through due diligence. Mike, do you want to talk about things broke out the categories of growth?

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Yeah. And just for we triangulated. We -- both companies did separate models on growth that we brought in to third party and then came to our final number that we use. So I think pretty well thought through.

You're looking at probably about 80% of revenue synergies come from ex U.S. And of that, the main biggest one we're looking at Savannah. Savannah is probably 80% when you look at it from a product view.

Matt Sykes -- Goldman Sachs -- Analyst

Great. Thank you very much.

Operator

Our next question comes from Luke Sergott with Barclays.

Chris Smith -- Chairman and Chief Executive Officer

Hey, Luke.

Luke Sergott -- Barclays -- Analyst

Hey, guys. Great. Thanks for taking my questions here. So when you talk about the instrument slowdown in the quarter, just from a modeling and theoretical perspective, like how long does the instrument growth need to be reaped like that before it actually starts hitting the integrated conversion into the actual -- the increased pull-through.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. Look, it depends. So as we've discussed publicly prior is about 50% of our instruments are cash and about 50% of those instruments are reagent rental. So look, without question, you're exactly right that if we think we're going to ship an instrument in 30 days and we ship that instrument in 90 days, it's a challenge.

I will say this, Luke, there's a big difference between -- remember, a lot of our business is taking existing instruments, contract expires and we upscale into another instrument. So in those cases, we're extending agreements. But I would say the places that where would be a challenge, which you're talking about is what we call D3, our competitive accounts. So from a modeling perspective, Joe, do you want to talk about the impact, what would that be? Like if it delayed in 30 days? Are we not out -- we have never really declared what that kind of stuff is?

Joe Busky -- Chief Financial Officer

Yeah. I don't -- we've not really talked publicly about that. So I don't know what the --

Luke Sergott -- Barclays -- Analyst

More directional, right? Like these are long duration cost just your average contract I know it's just in 17-year contract, one quarter down, gen really hit it.

Chris Smith -- Chairman and Chief Executive Officer

Well, remember that our average customer on an integrated is pushing 14 years. So I mean we -- the cool thing about us is when we get a customer we don't lose them. But Mike, go ahead.

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

All I was going to say, Luke, we've talked about a rate for some time of 3% to 4% overall installed base growth in needing integrated double digits. As you guys have heard now over the last year-plus, we've been right in the middle to just above middle of the teens. And so we've been outperforming, and that's because of retention and competitive wins. Even if we drop into the 11%, 12% range on integrated, that's still well within our model, our projections, right? So I think that we have a dip, but over time, we're going to still be where we need to be in the double digit.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. And I think it got lost kind of Luke in the quarter. I mean, the quarter was actually really a pretty good quarter. But like when I said our installed base was 3%, we kind of say we want to be in 3% to 5%.

But if we ship the instruments that we had orders on, it would have been 5% plus. So we actually had a good order. So I think the pipeline is robust. And look, a lot going on to get those instruments out.

Luke Sergott -- Barclays -- Analyst

Yeah. That was my follow-up was just going to be can you just give us an update on what that pipeline looks like? Any -- where there's extra demand or any customers that have kind of pulled back a little bit because of omicron, any update there is helpful for thinking forward?

Chris Smith -- Chairman and Chief Executive Officer

Well, look, I would -- look, at this point, we have not lost any business because you're saying have we lost business because of the delay?

Luke Sergott -- Barclays -- Analyst

Either that or just give us an update on the actual funnel here because if you're not able to get to the sales or because of omicron, just any type of weakness there to the pipeline?

Chris Smith -- Chairman and Chief Executive Officer

Yeah. So look, I would say that a lot of manufacturing plants around the world, including ours, has been hit with omicron, right, or like you get COVID. So that definitely has had it. I would say it's more around the supply chain.

And the way that I -- as you kind of think about this, it has not really impacted existing because you're signing a five- to seven-year contract with us. And like you said, if it's a month later than you thought, it really hasn't impacted our ability. I think what's happened candidly is like everything in our supply chain. This company three years ago was built to grow 1%, and I kind of kid our sales organization.

If there was no supply chain challenges out there and we grew the business 15%, it's probably OK. Or if we were the old company that only grew 1% and there's supply chain challenges, we're probably OK. But when you're growing a business 15-plus percent emerging markets well above that, and we're also managing the supply chain challenges. I think what you saw is kind of that it all came together in the fourth quarter, especially in the instruments that our team has done a fantastic job.

So the instrument flow is significantly higher than it's been before. But I would say, again, this is all manageable because of these relationships and partnerships, and you're looking at a five- to seven-year contract and you're looking at a 30-, 60-day delay. So it hasn't negatively impacted any of it.

Luke Sergott -- Barclays -- Analyst

Thank you.

Chris Smith -- Chairman and Chief Executive Officer

Yeah. And we'll take one last question, operator.

Operator

This question comes from Yi Chen with H.C. Wainwright.

Yi Chen -- H.C. Wainwright and Company -- Analyst

Hi. Thank you for taking my questions. Could you give us some additional color on the planned menu expansion in 2022 in geographic areas and also in Clinical Laboratories versus transfusion medicine? And whether the plan could be affected by the merger?

Chris Smith -- Chairman and Chief Executive Officer

Mike, do you want to take that?

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Yeah. So I don't expect to plan the integration to cause any challenges to the near-term product release. We've talked about probably 20 to 30 new approved assays over the next few years. That continues to be the case.

And again, I think if anything, we'll be looking for ways to leverage more menu for our customers as a combined company. But I don't think that anything that we're currently working on that time frame comes off. Major things that we have coming for Casatona and we'll be launching in China. Hemoglobin A1c on a slide, we just released ex U.S.

And first orders are coming in there, that's very exciting for us. And then we expect to release that later in the year for the U.S. as well. And then there are a number of smaller runners that we will release around our menu capability in '22.

But nothing that's happening through the integration that would cause any concern to what we deliver in.

Joe Busky -- Chief Financial Officer

Yeah. I would say the growth strategy is unchanged. I mean, we're going to continue to focus on integration strategy, and that's unaffected by the deal with quarter.

Chris Smith -- Chairman and Chief Executive Officer

And we still have 20 to 30 tests on the pipeline over the next three years or so.

Yi Chen -- H.C. Wainwright and Company -- Analyst

OK. Thank you.

Chris Smith -- Chairman and Chief Executive Officer

I think we are out of time. But we really appreciate just you taking the time today and the questions and walking through the fourth quarter of the year with us. And we'll continue to -- I know we're going to have some one-on-one with you guys, but we again appreciate the coverage, and we look forward to talking soon. Take care.

Operator

[Operator signoff]

Duration: 65 minutes

Call participants:

Bryan Brokmeier -- Vice President, Investor Relations

Chris Smith -- Chairman and Chief Executive Officer

Joe Busky -- Chief Financial Officer

Unknown speaker

Mike Iskra -- Executive Vice President of Commercial Excellence and Strategy

Vijay Kumar -- Evercore ISI -- Analyst

Tycho Peterson -- J.P. Morgan -- Analyst

Derik De Bruin -- Bank of America Merrill Lynch -- Analyst

Matt Sykes -- Goldman Sachs -- Analyst

Luke Sergott -- Barclays -- Analyst

Yi Chen -- H.C. Wainwright and Company -- Analyst

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