This article has been update from a previous version to include comments made by Qiagen CEO Peer Schatz during the company's earnings call.
NEW YORK (GenomeWeb) – Qiagen said after the close of the market Thursday that its second quarter revenues grew 5 percent year over year as the company beat analysts' consensus estimate on the top and bottom lines.
For the three months ended June 30, Qiagen reported net sales of $334.4 million, exceeding the Wall Street estimate of $326.8 million. At constant exchange rates, Q2 revenues increased 6 percent year over year.
About one percentage point of CER growth came from the company's acquisition of Mo Bio Laboratories in late 2015. Qiagen also noted that year-over-year net sales increased 8 percent excluding expected headwinds from declining US HPV testing sales.
By customer class and at CER, molecular diagnostics — responsible for about half of the company's total sales — grew 4 percent year over year to $166 million. Within this segment, double-digit consumables growth offset a single-digit drop in instrument sales, Qiagen said.
In other customer classes and at CER, applied testing sales grew 10 percent to $30 million, pharma sales grew 9 percent to $68 million, and academia sales grew 6 percent to $70 million.
In a conference call Friday recapping the company's earnings, CEO Peer Schatz noted that the company's core growth drivers represent about 35 percent of sales, and maintained a double-digit [CER] growth pace in Q2 while supporting "solid performances in all of our customer classes."
Key growth drivers include the QuantiFeron latent tuberculosis test, which grew above the 25 percent CER annual target rate set by the company; and "ongoing strong placements of QiaSymphony automation systems and double-digit [CER] growth related to QiaSymphony consumables," Schatz said.
During the call, Schatz also highlighted Qiagen's efforts to address a warning letter it received from the US Food and Drug Administration in May regarding the QuantiFeron-TB Gold blood test. The letter outlined multiple complaints about the test's high rate of false positives, possible misbranding, and other violations of federal law.
Schatz noted that the letter is "an issue we are taking very seriously. The letter described among its findings deficiencies in procedures related to complaint handling, medical device reporting, and corrective and preventative actions." These observations, he noted, were made after Qiagen's acquisition of Cellestis, the test's original developer, but while still operating under that company's quality system.
"We have reviewed our plans to correct the situation with the FDA and have already taken many actions," Schatz said. "These include having completed the transition of QuantiFeron to the Qiagen quality system, and preventive measures are now in place to move even faster to get acquired companies into the system. We have also insourced a significant share of QuantiFeron production into our FDA-approved Germantown, [Maryland] site from third-party suppliers."
Schatz concluded that "it is hard to predict when the issue will be resolved, but it is important to note that QuantiFeron continues to be fully authorized for marketing in the US, Europe, and around the world."
The company's R&D spending grew 25 percent to $42.1 million from $33.6 million in the same quarter a year ago, while SG&A spending rose 10 percent to $129.6 million from $117.3 million.
Qiagen's Q2 net income attributable to owners of the company was $21.0 million, or $.09 per share, compared to $25.1 million, or $.11 per share in Q2 2015. On an adjusted basis, EPS was $.24, edging out the average analyst estimate of $.23 per share.
Qiagen finished the quarter with $328.2 million in cash and cash equivalents, and $78.3 million in short-term investments.
The company raised its guidance for 2016 of adjusted net sales growth of 6 percent to 7 percent from a previous guidance of 6 percent CER growth. This guidance increase is based on $10 million of first-time sales contributions during the second half of the year from Exiqon, which Qiagen completed the acquisition of in late June.
Qiagen noted that it continues to expect full-year adjusted diluted EPS of about $1.10 to $1.11, with the Exiqon acquisition expected to have a neutral impact.
For the third quarter, adjusted net sales are expected to grow approximately 8 percent to 9 percent at CER, based on about seven percentage points of growth from its current portfolio and about $5 million of first-time sales contributions from Exiqon. Adjusted EPS is expected to be about $.28 in Q3.
Qiagen also today announced plans to return $300 million of capital to shareholders by the end of 2017, including $200 million by early next year, expanding on the fourth $100 million share repurchase program that it announced in April but has not yet initiated.