The story has been updated to include comments from Qiagen's conference call.
NEW YORK (GenomeWeb News) – Qiagen reported after the close of the market on Tuesday that revenues increased 9 percent year over year as both instruments and consumables and related sales bounced in the double digits.
The company also announced its first share buyback program with plans to repurchase up to $100 million in Qiagen shares.
For the quarter, the company recorded revenues of $307.2 million, up from $282.2 million a year ago, beating a consensus Wall Street estimate of $303.5 million. At a constant exchange rate (CER), revenues grew 14 percent year over year.
Qiagen said that sales of consumables and related products rose 12 percent CER year over year while instrument sales increased 28 percent CER. Recent acquisitions Cellestis, Ipsogen, and AmniSure contributed nine percentage points to overall growth. The rest of the company's portfolio contributed five percentage points, while currency had a negative impact of five percentage points.
The company said net income was unchanged from a year ago at $33.3 million. EPS also remained the same at $.14. Adjusted EPS for the quarter was $.25, beating analyst estimates of $.23.
By product category, Qiagen said that growth in consumables and related revenues was led by double-digit growth in Molecular Diagnostics, while instruments sales was driven by "initiatives to secure new product placements" including the QIAsymphony automation portfolio and the Rotor-Gene Q real-time PCR platform.
Applied Testing and Molecular Diagnostics delivered double-digit growth in instruments sales, compared to a year ago when demand was relatively soft, Qiagen said.
Molecular Diagnostics, it added, grew at 22 percent CER despite an expected decline in human papillomavirus sales. Global HPV tests, which make up about 17 percent of Qiagen's total sales, retreated 12 percent year over year during the quarter.
In the US where HPV sales is about 13 percent of Qiagen's total sales, "market conversion initiatives" and positive response to physicians to cervical cancer screening guidline updates earlier this year were more than offset by the pricing effects of multiyear agreements implemented by customers since early 2011, the company said.
The year-to-date trends are in line with company expectations, Qiagen CEO Peer Schatz said on a conference call today, and the overall market is not expected to be a growth driver in 2012.
In the US, there are no signs of major shifts in market share away from Qiagen, "nor do we anticipate this in the second half of the year," he added. US HPV revenues for the year are expected to retreat in the single digits.
Personalized healthcare products, meanwhile, grew at a double-digit pace on demand for companion diagnostic kits in Europe and Japan, as well as higher co-development milestone payments by drug firms, compared to a year ago.
Applied Testing rose 28 percent CER as instrument sales in the customer class doubled from a year ago and consumables grew at a high-single digit rate. Pharma sales rose 8 percent CER with contribution strongest from customers in Asia-Pacific and Japan.
Academic sales inched up 1 percent CER as consumables generated single-digit growth and instrument sales declined "slightly," Qiagen said.
In June, the company announced it had acquired next-generation sequencing firm Intelligent Bio-Systems as part of a strategy to move sequencing technologies into the molecular diagnostics and clinical research markets.
Today, Qiagen said that the first products to result from that strategy are expected to launch next year with a priority focus on the Academic and Pharma customer classes, and select areas in Molecular Diagnostics, such as personal health.
Schatz said on the conference call that its next-generation sequencing efforts will be directed at targeted applications and not discovery work. "Instead we want to capture rapidly emerging areas in selected areas," he said, adding that customers have told the firm that current offerings in the space are directed at the life sciences and do not meet their needs.
Qiagen already had pyrosequencing capabilities, and today Schatz said that the company's new next-gen sequencing technology would not replace pyrosequencing or its real-time PCR technologies, but would be complementary.
Earlier this month, the US Food and Drug Administration cleared the company's KRAS test as a companion diagnostic for Erbitux (cetuximab), used for treating colorectal cancer. Qiagen's sales and marketing team has undergone final training "and now it is time to maximize market potential," Schatz said. "Our number one priority is to convert laboratory-test labs to our test. We are very encouraged by the response and the acknowledgment by these labs about the benefits of switching to an FDA-approved test."
Qiagen said today that it expects to submit an application sometime this year for a therascreen EGFR as a companion diagnostic for Boehringer Ingelheim's investigational drug afatinib for patients with non-small cell lung cancer.
Other submissions expected to result from the more-than-15 companion diagnostic projects it currently has in collaboration with drug and biotech firms include a submission in Europe for its therascreen BRAF test and tests for cytomegalovirus in the US, Schatz said.
The company also said that it remains on track of placing more than 200 new systems during the year for a cumulative total of more than 750 QIAsymphony placements.
Qiagen exited the quarter with $214 million in cash and cash equivalents.
The company said that for the third quarter, net sales are anticipated to grow between 9 percent and 10 percent CER while adjusted EPS is expected to be $.25.
For full-year 2012 sales are expected to grow between 8 percent and 9 percent CER, up from an earlier estimate of 6 percent and 8 percent growth. Guidance for adjusted EPS for the full-year was also raised to a range of $1.04 to $1.06 from an earlier range of $1.03 to $1.05.
The company also announced its first share repurchase program of up to $100 million. Schatz said in a statement that the program "is a sign of our conviction about our future prospects, especially at a time when we believe our shares are undervalued.
"Our team is focused on growth drivers, such as expanding placement of our QIAsymphony platform and adding valuable content across out customer classes and regions," he continued.
The program will start on July 30, 2012 at the earliest and end Dec. 27, 2013, Roland Sackers, Qiagen's CFO, said on the conference call.
Shares of Qiagen increased 5 percent to $16.94 on the Nasdaq on Wednesday in late-morning trading.