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Qiagen Q2 Revenues Increase 8 Percent, Beat Analyst Estimates

This story has been updated from a previous version to include information on recently announced business items and comments made by Qiagen executives during its earnings call.

NEW YORK (GenomeWeb) – Qiagen reported after the close of the market on Tuesday that its second quarter revenues grew 8 percent year over year as the company beat analysts' consensus estimates on the top and bottom lines.

Separately on Wednesday, Qiagen said that its CareHPV molecular diagnostic test for human papillomavirus has been added to the World Health Organization's list of prequalified in vitro diagnostics. In addition, Qiagen announced a collaboration with Japan's SRL for companion diagnostics development.

For the three months ended June 30, Qiagen posted revenues of $377.2 million compared to $349.0 million a year ago, beating the Wall Street estimate of $375.6 million. On an adjusted basis and at constant exchange rates (CER), Q2 revenues grew 6 percent.

Consumables sales, representing about 88 percent of total sales, grew 6 percent at CER to about $333.0 million, while instrument sales grew 7 percent at CER to $44.0 million.

By customer class, revenues from molecular diagnostics — representing 49 percent of the company's total sales — grew 10 percent at CER to $187.0 million, buoyed by double-digit gains for Qiagen's QuantiFeron-TB test and growth in personalized healthcare, primarily due to companion diagnostic co-development deals.

Yesterday the company announced that the United Nations' International Organization for Migration selected QuantiFeron-TB Gold Plus (QFT-Plus) to screen migrants worldwide for TB. The company also said that it is partnering with Hamilton Robotics to automate sample processing of QFT-Plus tests.

On Wednesday, prior to its earnings call, Qiagen made two additional announcements related to its molecular diagnostics business. First, the company will non-exclusively collaborate with SRL, the largest clinical testing laboratory in Japan, to co-develop and implement companion diagnostic testing using Qiagen workflows as SRL seeks approval for new drugs by Japan's Pharmaceutical and Medical Devices Agency. The agreement covers a range of Qiagen technologies for CDx development, including real-time PCR and next-generation sequencing, and will initially focus on solid tumors and leukemia.

The goal of this collaboration and others like it is to "close the time gap between drug approvals and diagnostic testing, providing day-one availability of personalized therapies," Qiagen CEO Peer Schatz said on the earnings call.

In addition, Qiagen said that its CareHPV test, which is designed to test for high-risk HPV types in women in low-resource settings, has been added to the WHO list of prequalified IVDs. CareHPV is a molecular assay based on the same nucleic acid hybridization technology at the core of Qiagen's Digene HC2 HPV Test, which is more widely used in developed countries.

Qiagen launched CareHPV globally in 2010, and Qiagen noted that the WHO prequalification status is expected to significantly expand the availability of the test in countries that rely on the organization's prequalification list to make purchasing decisions.

"We already market CareHPV in China for rural or undeveloped areas, and the WHO endorsement should open up opportunities for additional sales to governments and [non-governmental organizations] active in many other emerging markets," Schatz said during the call.

In other customer classes, applied testing revenues fell 3 percent at CER to $33.0 million, due mainly to the divestment of the firm's veterinary testing business in early 2018; pharma revenues increased 4 percent at CER to $74.0 million; and academia revenues grew 4 percent at CER to $83.0 million.

During the quarter, Qiagen completed the acquisition of Stat-Dx, a move that was originally announced in January. Qiagen said that sales from the QiaStat-Dx, the sample-to-answer syndromic testing platform that was the centerpiece of the Stat-Dx acquisition, were not meaningful in Q2. The company continues to expect about $7 million in sales from the platform in the second half of the year.

Qiagen's Q2 net income grew to $36.8 million, or $.16 per share, from $14.0 million, or $.06 per share, a year ago. Adjusted EPS was $.33, edging out the Wall Street estimate for EPS of $.32.

During Q2 Qiagen started a $50 million tranche of a previously announced $200 million share repurchase program. As of July 27, a total of 1.1 million shares have been repurchased on the Frankfurt Stock Exchange at a volume-weighted average price of €30.04 per share for €35.0 million (about $40.7 million).

Qiagen's R&D spending in Q2 increased about 4 percent to $39.6 million from $37.9 million in Q2 2017. Its SG&A expenses fell 3 percent to $150.7 million from $154.6 million.

Qiagen finished the quarter with $674.4 million in cash and cash equivalents, and $225.8 million in short-term investments.

The company reaffirmed its guidance for full-year sales growth of 6 percent to 7 percent at CER, and adjusted EPS of $1.31 to $1.33 at CER. Analysts on average are expecting full-year EPS of $1.34.

For Q3, Qiagen is expecting sales growth of 6 percent at CER, and adjusted EPS of $.33 to $.34. Analysts are expecting EPS of $.34 for the third quarter.

In Wednesday mid-morning trading on the New York Stock Exchange, Qiagen's stock was up almost 5 percent to $37.82.