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UPDATE: Qiagen Q3 Revenues Rise 6 Percent; Beats Estimates on Top and Bottom Lines

The story has been updated to include comments from Qiagen's conference call Wednesday morning.

NEW YORK (GenomeWeb News) – Qiagen reported after the close of the market on Tuesday a 6 percent increase in revenues year over year for its third quarter.

Total revenues for the three months ended Sept. 30 reached $322.1 million, up from $304.3 million a year ago, and beating the average analyst estimate of $320.4 million.

By customer class, molecular diagnostics sales were up 10 percent year over year at constant exchange rates as both consumables and instruments saw double-digit growth in the quarter. Sales of the QIAsymphony platform and the QuantiFeron test grew, Qiagen said, and during the third quarter the total number of cumulative placements of QIAsymphony surpassed 1,000.

In its prevention business within molecular diagnostics, the QuantiFeron-TB test continued to grow at a better than 20 percent rate as the product saw rapid penetration in the US. HPV testing grew 3 percent, but US sales declined about 10 percent, as the company expected.

Qiagen CEO Peer Schatz said on the firm's conference call Wednesday morning that while volumes have been solid in the US, lower-priced tests from competitors have negatively impacted the business.

"We're seeing some quite desperate pricing approaches by some of the competitors that we have to partly also accommodate," he said, and added that US HPV revenues are expected to decline through 2015 at a pace similar to the current rate.

In profiling, also within molecular diagnostics, the growing base of installed QIAsymphony platforms resulted in a double-digit growth in consumables sales. Meanwhile, personalized healthcare saw companion diagnostic assay sales grow, but co-development project revenues declined due to timing-related issues, Qiagen said. Among its point-of-need tests, AmniSure assay sales grew above the 20 percent target rate.

The applied testing customer class returned to growth in the third quarter as revenues rose 6 percent year over year. Both consumables and instruments increased in the single digits, mainly due to incremental gains in the Asia-Pacific/Japan region.

The pharma customer class saw revenues climb 3 percent. Single-digit growth in consumables sales offset a double-digit decrease in instruments, Qiagen said.

Lastly, growth in all regions resulted in 2 percent growth in the academia customer class. Instrument sales were "sharply" down year over year, though consumables sales improved. Asia-Pacific/Japan grew the largest, led by China, while the US remained weak due to the effects of sequestration and cautious buying behavior in anticipation of the government shutdown that took place this month.

First-time contributions from Ingenuity Systems, acquired by Qiagen in April, "added to the underlying sales performance" within academia, "which was largely unchanged compared to the third quarter of 2012," Qiagen said.

On the call Qiagen CFO Roland Sackers said that about half of the sales growth company-wide came from Ingenuity while the other half came from the rest of the company's portfolio.

"We are executing on strategic initiatives in 2013 to accelerate innovation and growth by expanding Qiagen's portfolio of new products," Schatz said in a statement. "We exceeded our communicated targets for improved sales and adjusted earnings in the third quarter of 2013, delivering growth in all customer classes and regions, particularly in emerging markets, under challenging economic conditions."

The firm posted a profit of $40.8 million, or $.17 per share, in the quarter, compared to a profit of $29.1 million, or $.12 per share, a year ago. On an adjusted basis, EPS was $.28, beating the consensus Wall Street estimate of $.25.

Qiagen increased its R&D spending 11 percent year over year to $34.3 million from $31.0 million. Its SG&A spending also rose 11 percent to $133.0 million from $119.6 million.

Last week, the company acquired bioinformatics company CLC Bio. Qiagen did not disclose the terms of the deal, but said that it does not expect the purchase to have a material impact on financial results for 2013. The deal, it added, will enable it to create a "complete workflow form biological sample to valuable molecular insights."

CLC has about 100 employees, Sackers said on the call, and is anticipated to record between $8 million and $10 million in sales for 2013. It has more than 2,300 commercial and academic customers.

Qiagen also continues to build out its next-generation sequencing business and said that one focus is on developing and commercializing a sample-to-insight workflow that incorporates its GeneReader benchtop sequencer with the QIAcube and QIAcube NGS instruments for full automation of pre-analytical steps. Additionally, Qiagen seeks to integrate the biological data analysis, interpretation, and reporting capabilities of CLC Bio and Ingenuity.

It said that it has placed its NGS system with select customers for early testing "and initiatives are underway for a phased launch to select customer groups and broad commercialization in 2014."

Lastly, Qiagen launched its second $100 million share buyback program in early September and the first $10 million tranche was completed earlier this month.

The company exited the third quarter with $280.0 million in cash and cash equivalents, as well as $75.8 million in short-term investments.

For the fourth quarter, Qiagen said that adjusted net sales are anticipated to grow 6 percent and adjusted EPS to be about $.35. For full-year 2013, adjusted net sales growth was reaffirmed at 5 percent while adjusted EPS is anticipated to be about $1.13.

In Wednesday morning trade on the Nasdaq, shares of Qiagen were up 2 percent at $22.40.

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