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Qiagen Credits Q2 Gains to Supply Chain Strategy, Recent Product Launches


NEW YORK – Qiagen achieved strong second quarter results in the face of COVID testing declines and current macroeconomic trends through prior preparation and continued advances across its product portfolio, Qiagen CEO Thierry Bernard said on Thursday.

The firm saw double-digit growth in non-COVID products in the quarter, with the solid results leading it to increase its full-year guidance. During a call with investors to recap the Q2 results, Qiagen executives highlighted growth in instrument installations, new products, and entries into the high-throughput syndromic testing and biopharma spaces.

"Our teams continue to execute on advancing our portfolio, with the launch of instrument upgrades and value expansion in our growth drivers perfectly on plan," Bernard said on the call.

Like the rest of the diagnostics industry, Qiagen was faced with extreme supply chain pressures early in the COVID-19 pandemic. This had the benefit, however, of spurring the firm to shore up its supply chain and manufacturing infrastructure, Bernard said.

Now, "while the macro landscape continues to change and to present new challenges, we still have confidence in the robustness of our company and our strategy," he said. "Foresight has served us very well … [and] we have been able to remain commercially and operationally agile during these changing times," Bernard added.

Although the firm saw a 39 percent decrease in COVID-related business in the quarter, it also experienced 10 percent growth in non-COVID sales. Bernard credited this growth in part to product advances across Qiagen's sample prep, PCR, digital PCR, and next-generation sequencing businesses.

In the sample prep domain, Qiagen launched the QiaXcel Connect system in the second quarter providing an upgrade for the more than 4,000 systems already on the market.

The Connect system offers higher sensitivity and increased connectivity, Bernard said, allowing real-time remote instrument monitoring. The upgrade was preceded by the launch of the QiaCube Connect and EZ2, all part of an "ongoing program to upgrade our automated sample preparation instruments," he said.

Qiagen has also now exceeded an installed base of 3,000 QiaSymphony automated DNA sample preparation instruments.

Within clinical diagnostics, the firm's multiplex PCR QiaStat-Dx system now has three CE marked assays in Europe — for respiratory and gastrointestinal pathogens, as well as for pathogens causing meningitis.

The respiratory test was granted Emergency Use Authorization by the US Food and Drug Administration in 2020, and Bernard noted that the firm submitted the GI panel to the FDA for review in 2021 and that it is on track for possible clearance next year.

Qiagen also launched the QiaStat-Dx Rise system in Europe in May, increasing the throughput of its syndromic testing. The system features automated loading and unloading of samples as well as eight analytical modules enabling random access testing of up to 18 different samples and processing of as many as 160 tests per day. These features are unique in the market, Bernard said.

Competition in the commercially available high-throughput syndromic panel instrument space would include the BioFire FilmArray Torch.

Qiagen's NeuMoDx subsidiary business is also expanding, adding a new CE-marked quantitative assay for herpes simplex virus. Bernard noted the system now has 15 CE IVD assays, and the firm is continuing to invest in research and development to support FDA clearance for these as well to expand the offering in the US.

The change in proportions in Europe of NeuMoDx's COVID-19 testing business versus non-COVID testing is also potentially a harbinger of future trends, Bernard said. While 85 percent of the business in Europe had been COVID-19 testing in the year ago period, the proportion has now shrunk to between 65 percent and 70 percent, replaced by non-COVID testing.

"Obviously, we need to continue to push that, but this is encouraging," Bernard said.

Qiagen's digital PCR business is also growing, with a contract win from the US Centers for Disease Control and Prevention to support wastewater testing using the firm's QiAcuity instrument and assays.

The firm launched QiAcuity a little more than a year and a half ago, and has since placed more than 1,000 systems, Bernard noted.

Qiagen this week also marked QiAcuity's entry into the biopharma space with the launch of 13 assays to support quantification and analysis in the development and manufacturing of cell and gene therapy drugs.

Bernard called the entry a "milestone" for the firm's dPCR business.

"This is significant, since the biopharma segment is probably currently one of the largest consumer segments for digital PCR," he said.

The primary competition in the dPCR space comes from Thermo Fisher Scientific and Bio-Rad. In biopharma specifically, Thermo recently launched the QualTrak workflows, while Bio-Rad has described an enhanced focus on the biopharma market.

Qiagen is also hopeful that recent dynamics in the NGS instrument space will open up opportunities for its agnostic NGS offerings.

As such, the firm is strengthening its strategy "to be a key platform-agnostic player in next-generation sequencing chemistry and data management," Bernard said.

"This is very relevant because we see introduction of new technology enabling lower cost and faster next-generation sequencing," he said, adding that as such, Qiagen's Digital Insights bioinformatics portfolio and universal consumables "are very well placed in a rapidly expanding market."

The firm's Qiagen Clinical Insight (QCI) bioinformatics platform has now been used to analyze and report more than 3 million samples, Bernard said. "This is five times more than any other comparable commercial offering," he added.

Qiagen also saw growth in its QuantiFeron-TB latent tuberculosis testing business and is on track to exceed its 2022 sales expectations of $310 million in sales.

Bernard said the firm's efforts to build up its inventory and balance sheet to offset the volatility caused by COVID spikes over the past 18 months have now made it more resilient in the face of macroeconomic headwinds, so that its customers are not impacted by a lack of products.

That said, Qiagen is passing along some of the cost increases that are impacting the industry to its customers by increasing prices and adding surcharges for higher freight costs.

Bernard noted that although the firm typically adjusts its prices once, at the end of each year, given the current inflationary environment it has added a second price increase in June and July for its customers without fixed cost contracts.

Nevertheless, "perhaps our industry, and particularly Qiagen, [is] slightly more prepared than the rest of the world," Bernard said. "We are coming with already two years of hard work to strengthen our supply chain," he added.