This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
Following its release of strong revenue growth for the fourth quarter and full-year 2006, Qiagen officials said this week that the firm plans to expand its sample and assay portfolio and expects to make “a significant investment in clinical trials” for new diagnostic products.
Qiagen has spent the past couple of years beefing up its molecular diagnostic offerings through internal efforts and acquisitions, and according to Qiagen CEO Peer Schatz, molecular diagnostics now accounts for 27 percent of the firm’s sales. During a conference call this week, he detailed some of the firm’s plans for the molecular diagnostics market in 2007 and 2008.
In addition, Qiagen reported that its fourth-quarter revenue rose 21 percent, while fiscal 2006 revenues climbed 17 percent.
As part of its efforts to expand its molecular diagnostic offerings, Qiagen acquired Genaco Biomedical late last year for up to $40 million, depending on whether certain milestones are met (see BioCommerce Week 11/1/2006).
The acquisition provides Qiagen with a PCR-based multiplexing technology and a handful of assays that will be paired with the quantitative molecular diagnostic products the firm gained through its earlier acquisitions. Qiagen also announced this week that it had substantially increased its license portfolio in real-time PCR through agreements with Roche and Ortho Clinical Diagnostics.
“The panel approach in molecular diagnostics using the multiplexing technologies from Genaco [is] really an extremely unique capability that we have,” said Schatz during the firm’s fourth-quarter conference call this week. “It sets us apart from other companies in this space and gives us opportunities not only in diagnostics but also in pharmaceutical research. This area will continue to get high investments, especially in the area of regulation and regulatory initiatives in 2007.”
Qiagen currently has 40 CE-marked assays and said it intends to file in 2008 for 510(k) approval from the FDA of two respiratory panels.
Over the past year, Qiagen increased its sales force by 34 percent to 742, with a focus on dedicated sales forces for molecular diagnostics, applied testing, and pharma.
“We’re going to launch a major initiative in regulated products for molecular diagnostics, primarily in the United States and Europe,” said Schatz. “And these organic engines will be augmented using catalytic acquisitions, which we’ll continue to consider as part of our strategy going forward. The targets are primarily looking at sample and assay technologies and also to expand our regional footprint.”
Schatz also said during the call that he did not expect Qiagen’s relationship with Luminex to change, despite that firm’s planned acquisition of Tm Biosciences, which will put Luminex in more direct competition with Qiagen in the assay development market (see BioCommerce Week 12/20/2006). He noted that Qiagen is a partner of Luminex and sells Luminex systems for use with Genaco’s assays.
“In general, we have a good relationship with Luminex,” said Schatz. “We discuss openly about our plans and opportunities, and we think it’s a very strong platform. There are thousands of placements, it’s well accepted, and the technology that we have around multiplexing fits very well onto the Luminex system.”
He also noted that Genaco’s assay technology could also be applied to other detection technologies, not just Luminex’s xMAP. “The technologies from Tm … are not really very much overlapping with the Genaco capabilities,” Schatz added. “It’s more a pathogen-related panel or portfolio that we’re looking at, whereas the majority of sales from Tm are in the genetic area.”
“We’re going to launch a major initiative in regulated products for molecular diagnostics, primarily in the United States and Europe. And these organic engines will be augmented using catalytic acquisitions, which we’ll continue to consider as part of our strategy going forward.”
Q4, FY 2006 Revenues Rise Sharply
Qiagen this week reported that its fourth-quarter revenue rose 21 percent and its quarterly net income increased 15 percent year over year.
Total revenue for the three months ended Dec. 31, 2006, rose to $125.9 million from $104.3 million year over year. The increase was in part caused by a 53 percent increase in instrument sales, the company said.
Schatz said 4 percent of the new revenue in the quarter came from the addition of 67 new products in 2006, including sample and assay technologies for research in the areas of epigenetics, gene expression, microRNA, proteomics, RNAi, applied testing, and molecular diagnostics.
The company said its profit increased to $19.5 million, or $.13 per share, from $16.9 million, or $.11 per share, in the year-ago period.
Qiagen’s R&D spending increased to $11 million from $9.7 million year over year.
For full-year 2006, Qiagen reported revenue of $465.8 million, up 17 percent from revenue of $398.4 million in 2005. Sales of consumables were up 17 percent for the year, while sales of instruments rose 19 percent.
Qiagen posted a 2006 profit of $70.5 million, or $.46 per share, up 13 percent from net income of $62.2 million, or $.41 per share, in 2005. The firm’s R&D spending increased 16.2 percent to $41.6 million in 2006 from $35.8 million in 2005.
The firm finished the year with around $430 million in cash and equivalents and $52.8 million in short-term investments as of Dec. 31, 2006.
The company said it expects 2007 revenues to increase to between $518 million and $535 million and earnings per share of between $.60 and $.63.
“We have commenced investment in clinical trials for a number of molecular diagnostic products, as well as investing in sales and marketing in this area, and would expect, therefore, Q1 EPS to be lower by approximately 20 percent,” said Roland Sackers, Qiagen’s CFO, during the call.