Prospects appear bright for OraSure Technologies (NASDAQ:OSUR).

First, there's the potential for an over-the-counter (OTC) version of the company's rapid (about 20 minutes), noninvasive HIV screening test to be available by as early as mid-2008. This is good timing coming on the heels of a report issued last fall by the Centers for Disease Control and Prevention (CDC) urging routine HIV screening tests for all pregnant women and people between the ages of 13 and 64.

OraSure also is developing a rapid, noninvasive screening test for hepatitis C (HCV) in conjunction with Schering Plough (NYSE:SGP). The company is also in the process of modifying its oral drug screening test for potential use by the federal government, which now requires urine samples.

If the company successfully executes these crucial growth initiatives, future profit and revenue growth will be a sure thing.

Last week, OraSure reported record first-quarter revenues of $20.1 million, up 32% from $15.2 million in the year-ago period. Profits came in at $0.03 per share on a fully diluted basis, compared to profits of $0.02 per share in the year-ago period. The company cited strong sales of its OraQuick ADVANCE HIV-1/2 rapid screening test, along with solid results for the company's drug screening tests and cryosurgery products. OraSure reported a $3.2 million increase in operating expenses to $11.9 million for the quarter as the company devotes more resources to development of its HIV and HCV screening tests.

While OraSure may have guided slightly below consensus estimates for second-quarter revenues of about $20 million and profits ranging from breakeven to a penny a share, the key catalyst in the next year or so is obtaining OTC marketing approval for the company's HIV test. The company plans to conduct label comprehension studies and develop a counseling referral system in an effort to create packaging and labeling that consumers can easily understand. OraSure expects to submit its application in early 2008 for the OraQuick ADVANCE OTC, resulting in a best case of approval by mid-2008.

A follow-on product under development by the company along with Schering Plough is the OraQuick HCV rapid screening test, which will be targeted to health-care professionals and not OTC to consumers. As announced in late 2006, OraSure will be reimbursed for a portion of its development costs while Schering provides the sales force and marketing efforts for the product once it is approved by the FDA.

Another area of focus is the potential for a federal policy change from using urine samples to screen employees for illegal drug use. Urine samples are more expensive for labs to process and can be defeated by employees using drug-free urine, which can actually be purchased online in liquid and powder forms. OraSure's Intercept oral fluid collection device is used in conjunction with a nine-drug detection system, offering advantages such as lower total costs for employers, a less invasive method, no potential for adulteration of samples, and no requirement for specialized collection facilities.

The other growth driver identified by OraSure in its latest quarterly report came from sales of its cryosurgical systems (used to remove non-cancerous skin lesions such as warts by freezing them away). Histofreezer is marketed to health-care professionals and approved for the removal of nine types of benign skin lesions. An OTC version of the device is distributed by Prestige Brands (NYSE:PBH) as Compound W Freeze Off. OraSure initiated arbitration against Prestige for a potential conflict of interest when Prestige acquired the Wartner product line; so the future relationship between the two is uncertain. However, OraSure is seeking to expand the uses for its OTC Freeze Off device and working to create a new salicylic acid combination for OTC purchase.

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Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives, writes, works, and enjoys running on the streets and trails in the small Pennsylvania town of Portage. He invites your comments and feedback. Mike does not have a position in any company mentioned in this article. The Fool has a disclosure policy.