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Qiagen Q1 Revenues Flat, Beat Wall Street Expectation

This article has been updated from a previous version to include comments made by Qiagen CEO Peer Schatz during an earnings call.

NEW YORK (GenomeWeb) – Qiagen said after the close of the market Wednesday that its first quarter revenues were flat year over year, but the top-line result exceeded analysts' expectations.

For the three months ended March 31, Qiagen reported $298.4 million in revenues, exceeding the Wall Street consensus estimate of $295.8 million. On an adjusted basis and at constant exchange rates (CER), Q1 revenues increased 2 percent year over year.

About one percentage of CER growth came from the company's acquisition of Mo Bio Laboratories in late 2015, with the rest of Qiagen's portfolio contributing another percentage point.

Excluding the expected impact of lower HPV test sales in the US, adjusted CER net sales rose 4 percent year over year, Qiagen said.

"Instruments rebounded after a weaker performance in the fourth quarter of 2015, with now 6 percent growth at constant exchange rates for the first quarter," Qiagen CEO Peer Schatz said in an earnings call Thursday. "Sales from consumables and related revenues rose 2 percent on a constant exchange rate basis and provided about 88 percent of sales."

By customer class and at CER, molecular diagnostics, responsible for just under half of total sales, grew 2 percent year over year but 6 percent excluding US HPV headwinds. Within this customer segment, instrument sales grew at a double-digit rate while consumables and related revenues grew in the single digits.

"Placements of the QiaSymphony automation system had a solid quarter, as our teams achieved more than 50 new placements," Schatz said during the call. "We are on track to achieve the 2016 target for more than 1,750 cumulative placements compared to more than 1,500 at the end of 2015."

Of note in molecular diagnostics, sales for the QuantiFeron-TB test grew over 25 percent compared to the year-ago quarter, and now represent about 10 percent of total sales at the company.

In addition, Schatz provide an update during the call on the company's GeneReader sequencing workflow, noting that the company's "top priority in 2016 is to develop this opportunity and secure system placements," and that Qiagen is looking to gain a "double-digit share of the benchtop sequencing market for targeted panels primarily in cancer clinical research."

Since the company initiated commercialization of the platform at the Association for Molecular Pathology conference in November, it has seen "a broad and strong response from customers to this offering, and we surpassed our placement goal for the first quarter of this year," Schatz said, though he did not provide specific placement numbers.

In other customer classes and at CER, applied testing fell 5 percent on a tough year-over-year comparison; pharma grew 7 percent; and academia rose 2 percent.

Qiagen's R&D spending grew 4 percent to $39.8 million from $38.3 million, while its SGA expenditures also rose 4 percent to $119.8 million from $114.8 million.

The company's Q1 net income attributable to owners of the company was $14.9 million, or $.06 per share, compared to $19.5 million, or $.08 per share, in Q1 2015. On an adjusted basis, EPS was $.19, in line with analysts' consensus estimate.

Qiagen finished the quarter with $355.8 million in cash and cash equivalents, and $91.5 million in short-term investments.

The company reaffirmed full-year 2016 expectations of adjusted net sales growth of approximately 6 percent at CER, including one percentage point of growth from Mo Bio and one percentage point of headwind from US HPV sales. Full-year adjusted EPS is expected to be between $1.10 and $1.11. Full-year expectations do not take into account the company's previously announced $100 million offer to acquire Danish biotech firm Exiqon.

"The acquisition of Exiqon would add a top player in the field of non-coding RNA, which is a hot research area and a synergistic portfolio in RNA analysis and bioinformatics," Schatz said during the call. "We believe our offer will create value for the shareholders of both companies, and look forward to completing this transaction in 2016."

For the second quarter, adjusted net sales are expected to grow about 4 percent at CER, including two percentage points of headwind from US HPV sales. Adjusted EPS is expected to be approximately $.22.

Qiagen also announced today the launch of its fourth $100 million share repurchase program, which follows on the heels of the third program, under which the firm repurchased approximately 3 million shares on the Frankfurt Stock Exchange at an average price of €19.33 per share for €57 million (about $70 million).