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UPDATE: Qiagen's Q4 Revenues Rise 4 Percent

The story has been updated to include comments from Qiagen's conference call this morning.

NEW YORK (GenomeWeb News) – Qiagen said after the close of the market on Tuesday that its fourth-quarter revenues increased 4 percent year over year at constant exchange rates.

For the three months ended Dec. 31, 2012, the firm posted $346.5 million in revenues, up from $334.4 a year ago and surpassing the consensus Wall Street estimate of $327.8 million.

The company said that the molecular diagnostics and applied testing customer classes paced growth in the quarter with net sales up 4 percent. Sales from AmniSure, which Qiagen bought in May 2012, provided two percentage points of growth, with the rest of the portfolio also adding two percentage points of growth.

By product category, consumables and related product sales increased 4 percent year over year, while instrument sales increased 7 percent.

By customer class, molecular diagnostics in the quarter increased 6 percent and applied testing revenues spiked 16 percent. Pharma sales inched up 1 percent and academia sales were flat year over year.

The firm lowered its R&D spending in the quarter 2 percent to $32.2 million from $32.8 million a year ago, while it sliced its SG&A costs 21 percent to $142.5 million from $180.9 million.

Qiagen increased its profits to $38.3 million, or $.16 per share, from a loss of $790,000, or break-even on a per share basis, a year ago. On an adjusted basis EPS came in at $.34, beating analyst estimates of $.30.

In the year-ago period, Qiagen took a restructuring charge of $75 million related to a reorganization announced in November 2011.

On a conference call following the release of the firm's earnings, Qiagen CEO Peer Schatz said that the reorganization efforts are "having a positive impact on transforming Qiagen," and will help the company improve its growth and profitability in 2013 and beyond. He also said that the firm is considering projects this year "designed to free up additional resources for investments into our growth initiatives."

For full-year 2012, Qiagen said that sales rose 7 percent to $1.25 billion from $1.17 billion in 2011. It edged out analyst estimates of $1.24 billion.

Revenue growth was driven by business expansion across all customer classes, in particular molecular diagnostics and applied testing. Recent acquisitions - Ipsogen and Cellestis in 2011 and AmniSure in 2012 - together provided 6 percentage points of growth, Qiagen said.

Consumables and related product revenues increased 10 percent year over year as molecular diagnostics and applied testing saw double-digit growth in 2012. Instrument sales were up 11 percent, and the firm surpassed its goal of more than 200 new placements of the QIAsymphony platform during the year. Since the system's launch in 2008, it added, the QIAsymphony installed based has surpassed 750 instruments.

For 2013, Qiagen is targeting an installed base of more than 1,000 instruments as it taps into "untapped opportunities in molecular diagnostics, applied testing, and our other customer classes," Schatz said on the conference call.

He added that QIAsymphony consumables are growing at a double-digit clip and the company has set to accelerate that growth in 2013.

Molecular diagnostics sales in 2012 climbed 15 percent, although HPV testing, which represents about 16 percent of companywide sales, slipped 8 percent year over year. Those results were in line with company expectations "as slightly higher volumes in the US were more than offset by pricing pressure from the implementation of multiyear customer agreements," Qiagen said.

Schatz reiterated expectations that the Quantiferon TB test for latent tuberculosis that Qiagen acquired when it bought Cellestis will deliver 20 percent growth on an annualized basis for the next few years.

The market for the test is about 55 million tests. Current testing methods still rely on technologies developed more than a century ago, he said, and Qiagen is "actively converting" the market to the Quantiferon technology. A number of pharma firms have expressed interest in the test, he added, as new drugs are being developed for TB patients who do not respond to TNF alphas.

In other customer classes, applied testing sales were up 22 percent, pharma sales increased 5 percent, and academia sales inched up 1 percent.

Qiagen's R&D costs for the year were reduced 6 percent to $122.5 million from $130.6 million a year ago. Its SG&A spending increased a fraction of 1 percent to $495.6 million from $492.8 million in 2011.

Qiagen posted a profit of $129.5 million, or $.54 per share, compared to a profit of $94.9 million, or $.40 per share, a year ago. Adjusted EPS was $1.08 for 2012, beating analyst estimates of $.99.

The company ended the year with $394.0 million in cash and cash equivalents and $90.5 million in short-term investments.

During the year, the firm acquired next-generation sequencing company Intelligent Bio-Systems, and on Tuesday, Qiagen said that in 2013 it plans to launch products for automating sample-to-result processing of NGS runs. It also said that a benchtop sequencer is now in an advanced stage of development, as is bioinformatics for accelerating NGS analysis time for higher sample throughput levels.

In October, Qiagen initiated a $100 million share repurchase program, and as of Jan. 25, it has bought back about $57 million of its stock, it said.

Lastly, the company said that it has added Tadd Lazarus as chief medical officer. He will be responsible for Qiagen's overall medical strategy, including assessing and advancing the firm's diagnostic assay portfolio and clinically evaluating new diagnostic tests. Lazarus was previously CMO and vice president of clinical affairs at Gen-Probe, which is now part of Hologic.

Qiagen gave full-year 2013 revenue guidance of 5 percent to 6 percent growth. Its adjusted EPS is expected to increase to a range of $1.16 to $1.18.

In early afternoon trading on the Nasdaq, shares of Qiagen were up 5 percent to $20.98.

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