The story has been updated to include comments from Qiagen's conference call this morning.
NEW YORK (GenomeWeb News) – Qiagen reported after the close of the market on Tuesday that revenues for its second quarter increased 3 percent year over year at a constant exchange rate.
The company also announced a new share buyback program of up to $100 million. Based on the closing price of its stock on July 29, that would represent approximately 5 million shares, Qiagen said.
Qiagen recorded $315.2 million in revenues for the three months ended June 30, up from $307.2 million a year ago and beating the average Wall Street estimate of $312.3 million.
Consumables and related revenues were up 5 percent year over year and rose across all customer classes, the company said. Instrument revenues retreated 8 percent, however, as a result of the ongoing transition among molecular diagnostic customers to reagent rentals for QIAsymphony automation system placements.
QIAsymphony placements remained strong, however, despite the transition and on a conference call today, Qiagen CEO Peer Schatz said that through the first half of 2013, placements of QIAsymphony were up 15 percent year over year and the company is on track to meet a milestone of 1,000 cumulative placements of the platform.
Pharma, applied testing, and academia saw low spending trends during the quarter, the company said.
By customer class, molecular diagnostic sales increased 4 percent year over year. Qiagen said consumables sales saw "solid" single-digit growth in the quarter, but was more than offset by a high-single-digit drop in instrument sales. Revenues generated from the QuantiFeron-TB test grew 20 percent, but HPV testing was down 17 percent, with sales decreasing in the US resulting from competitive pricing. HPV sales were up in the Asia/Pacific region, though.
Personalized healthcare sales increased slightly overall, as sales of companion diagnostic kits were up in the double digits, but pharma co-development projects saw lower revenues, Schatz said.
He added that the company has reached confidential companion diagnostic co-development deals with existing partners and new pharma partners.
Qiagen also is on track to begin the launch of its sample-to-insight next-generation sequencing benchtop workflow later this year. The workflow couples its GeneReader sequencing platform with data interpretation enabled by its $105 million purchase of Ingenuity Systems in April.
It has placed its GeneReader instrument with early access customers and "our ambition is to drive the use of this breakthrough technology in clinical research and diagnostics by offering a fully integrated workflow from biological sample to highest quality data interpretation and actionable results," Schatz said.
The applied testing customer class declined 4 percent against a tough year-ago comparison, said Qiagen. Consumables were up at a double-digit clip, but instrument sales were down "significantly," the company said.
Pharma improved 4 percent as instrument sales increased in the double digits, and consumable sales also increased, aided by contributions from Ingenuity.
Lastly, Academia saw a 3 percent improvement year over year as growth in Latin America, China, and other markets offset softness in the US and some parts of Europe, Qiagen said. Ingenuity Systems revenues also contributed to the growth.
Qiagen reported a net loss of $51.7 million, or $.22 per share, for the second quarter, compared to a profit of $33.7 million, or $.14 per share, for the second quarter of 2012.
On an adjusted basis, Qiagen had EPS of $.27, beating the consensus Wall Street estimate of $.23 per share.
The company took a restructuring charge of $76 million for the recently completed quarter associated with "a major efficiency project designed to free up resources for reallocation to strategic initiatives."
The efficiency project was started in late 2011, at which time the firm said it would cut between 8 and 10 percent of its workforce, and the $76 million charge taken during the second quarter relates to expenses associated with the closure of sites in the US, Germany, and China "to gain efficiencies," Schatz said, as well as changes to the company's R&D portfolio to emphasize faster growing areas. This included the allocation of more resources to its next-generation initiatives while de-emphasizing HPV-related R&D work.
Lastly, the charges relate to changes made to Qiagen's commercialization and marketing operations.
The restructuring charges will end this year "and we realize it is time for us… to deliver on delivering tangible benefits from these actions," Schatz said on the conference call.
Qiagen's R&D costs increased 10 percent year over year to $33.6 million from $30.6 million, while its SG&A costs of $160.4 million were a 37 percent increase over $117.2 million a year ago.
Qiagen ended the quarter with $299.8 million in cash and cash equivalents, and $73.4 million in short-term investments.
For the third quarter, the company projected net sales growth of 6 percent year over year and adjusted EPS of about $.27.
The firm said net sales for full-year 2013 is anticipated to grow about 5 percent compared to 2012, while adjusted EPS is estimated at about $1.13.
"Qiagen delivered growth across all regions in the second quarter of 2013 despite challenging economic conditions, particularly given the funding concerns for life sciences research in the United States and Europe," Schatz said in a statement.
"We are completing the transformation of Qiagen through an efficiency project that has strengthened our capabilities to capture growth opportunities in a fast-changing environment," he said.
In Wednesday morning trade on the Nasdaq, shares of Qiagen were down around 1 percent at $20.52.