This article has been updated from a previous version to include comments made by Qiagen CEO Thierry Bernard during the JP Morgan Healthcare Conference in San Francisco.
SAN FRANCISCO – Qiagen announced on Monday that it has acquired forensic science next-generation sequencing firm Verogen for $150 million.
In addition, at the JP Morgan Healthcare Conference held here this week, company executives briefly discussed growth expectations for the coming year.
San Diego-based Verogen provides NGS tools and professional services to help solve criminal and missing-persons cases. The firms inked a distribution agreement in 2021 for Qiagen to distribute Verogen's Illumina MiSeq FGx sequencer, designed specifically for forensics applications, as well as its NGS-based panels and bioinformatics solutions. Under the distribution deal, the companies also agreed to collaborate to commercialize Verogen's NGS workflows with Qiagen's sample prep automation to provide full sample-to-ID workflows for human identification laboratories.
Qiagen said in a statement that it expects approximately $20 million in sales from the Verogen portfolio in 2023. It received about $5 million in sales in 2022 from the distribution agreement. Planned investments for commercialization and portfolio development are expected to be dilutive to full-year 2023 adjusted earnings per share by about $.03 per share, it noted.
With the acquisition, Qiagen gains exclusive distribution rights for the forensic version of the sequencer, the firm said. More than 300 of the sequencing systems have been placed to date, and Qiagen will also gain access to Verogen's ForenSeq suite of kits and the GEDmatch database and GEDmatch Pro Portal. The database allows people to upload genetic profiles created by other genealogy sites and contains more than 1.8 million genealogical profiles, Qiagen said. GEDmatch Pro provides investigative comparisons to the data for police and forensic teams.
Qiagen already offers its own sample collection and preparation kits, genetic testing analysis, and workflow automation products, and the acquisition "creates a unique opportunity to better help investigators and researchers to advance forensic science," Qiagen CEO Thierry Bernard said in a statement.
JP Morgan presentation
In a presentation at the JP Morgan Healthcare Conference in San Francisco, Bernard further noted that with the acquisition of Verogen, the company is putting together the "most complete workflow" from sample preparation to genomic analysis for forensic activities. For Qiagen, all M&A means "reinforcing and strengthening where we play," he said at the JP Morgan conference. The Verogen acquisition makes sense, Bernard said, because Qiagen is already involved in the human identification market.
The firm is focused on bolt-on acquisitions, such as the purchase of Verogen and its acquisition last year of a majority stake in Polish enzyme provider Blirt, he said. Qiagen is open to more transformational deals as well, Bernard said, but any acquisition for the company has to strengthen the firm and has to be reasonably accretive in a short time frame — about two years.
Beyond Verogen, Bernard provided additional information on the company's overall expectations, saying the firm is "well on track" to deliver on the raised revenue guidance it provided in the third quarter of 2022.
Qiagen has also been the subject of a number of M&A rumors, most recently with Bio-Rad Laboratories in October. Bernard said that the company is not opposed to a strategic deal, but that it must make sense for the shareholders.
Bernard also provided estimates for different segment growth rates in 2023, although the company did not announce preliminary earnings. For its sample technology business, Qiagen expects low- to mid-single digit growth, and for its QuantiFeron tuberculosis testing business, it expects low-double digit growth. The QiaStat-Dx syndromic testing and NeuMoDx clinical PCR businesses will likely grow between 10 and 15 percent, and the QiAcuity digital PCR segment is looking at growth in the high double digits, Bernard said.