NEW YORK (GenomeWeb News) – Qiagen said after the close of the market on Wednesday that its fourth quarter revenues increased 5 percent year over year at constant exchange rates.
For the three months ended Dec. 31, 2013, the firm posted $362.6 million in revenues, up from $346.5 a year ago, but falling short of the consensus Wall Street estimate of $365.5 million.
Separately, after the close of market on Wednesday, Qiagen said that it plans to roll out a portfolio of assays for its QIAsymphony platform to aid in the diagnosis of healthcare-associated infections, and it has submitted the first such test — an assay for Clostridium difficile — as well as the QIAsymphony RGQ MDx system to the US Food and Drug Administration.
In Q4 Qiagen's applied testing and pharmaceutical customer classes in particular drove growth. Approximately two percentage points of growth came from Qiagen's ongoing product portfolio, with the remaining three percentage points of growth coming from the company's acquisitions of Ingenuity Systems and CLC Bio in 2013.
By customer class, molecular diagnostics sales increased 3 percent in the quarter and constituted about half of Qiagen's overall sales. The company said that molecular diagnostic consumables saw solid single-digit growth but instrument sales were lower. Meantime, applied testing revenues shot up 17 percent, pharma sales grew 7 percent, and academia sales rose 4 percent year over year.
By product category, consumables and related product sales increased 7 percent year over year and were responsible for 86 percent of overall sales, while instrument sales fell 5 percent. Qiagen said that the drop in instrument sales was primarily attributable to the fact that the company placed several instruments as part of reagent rental agreements, particularly for the QIAsymphony.
Qiagen significantly increased R&D spending in Q4 to $43.8 million, a 36 percent increase over $32.2 million a year ago. Meantime, SG&A costs rose 4 percent to $148.7 million from $142.5 million.
Qiagen increased its profit to $60.2 million, or $.25 per share, from $38.4 million, or $.16 per share, a year ago. On an adjusted basis EPS came in at $.36 compared to $.34 in the year-ago period and beating the consensus analyst estimate of $.33.
For full-year 2013, Qiagen said that sales rose 4 percent to $1.31 billion from $1.25 billion in 2011. This represented 5 percent growth at constant exchange rates. Full-year growth was in line with the consensus analyst estimate.
Revenue growth was reported for all regions and across all customer classes, Qiagen said, but particularly molecular diagnostics and applied testing, which grew 7 percent and 6 percent, respectively. The company noted that a 6 percent increase in revenues from consumables and other revenue more than offset a 4 percent decline in instrument sales. The aforementioned Ingenuity Systems and CLC Bio acquisitions, as well as AmniSure International, which was acquired in May 2012, contributed approximately the same amount to growth as Qiagen's existing product portfolio in 2013.
Qiagen's focus on reaching multi-year reagent rental placements of QIAsymphony negatively impacted instrument sales in 2014 just as it did for Q4. However, the company said that it exceeded its 2013 goal to reach a cumulative installed base of more than 1,000 systems compared to more than 750 at the end of 2012. The company noted that it has set a target of 250 new QIAsymphony placements in 2014.
Molecular diagnostics sales in 2013 climbed 7 percent and were responsible for half of all revenues, benefitting from high-single-digit gains in consumables. In particular, sales of Qiagen's QuantiFeron-TB test for detection of latent tuberculosis grew more than 20 percent and represented approximately 6 percent of total sales; however, human papillomavirus testing was a mixed bag, as sales in the US declined about 10 percent, in line with expectations, while growing at a double-digit rate in the rest of the world. HPV testing represents about 16 percent of sales, the company said.
Also under the molecular diagnostics umbrella, personalized healthcare sales of companion diagnostic assays were higher despite challenging developments in the US reimbursement landscape, Qiagen said. The company also entered into several new co-development projects during 2013, but revenues in this area were significantly lower than in 2012 due mainly to the timing of milestone payments.
In other customer classes, applied testing sales were up 6 percent, pharma sales increased 3 percent, and academia sales inched up 1 percent.
Qiagen's R&D costs for the year were shot up 19 percent to $146 million from $122.5 million in 2012, while SG&A spending increased 15 percent to $570.5 million from $495.6 million in 2012.
Qiagen posted a profit of $69.1 million, or $.29 per share, compared to a profit of $129.5 million, or $.54 per share, a year ago. Adjusted EPS was $1.14 for 2013, an increase from adjusted EPS of $1.08 in 2012 and beating the average analyst estimate of $1.03.
The company ended the year with $330.3 million in cash and cash equivalents and $49.9 million in short-term investments.
In September, Qiagen initiated a $100 million share repurchase program, its second in two years, and as of Jan. 24, it has bought back about $35 million of its stock under the new program, it said.
Qiagen gave full-year 2014 revenue guidance of 4 percent to 5 percent growth at constant exchange rates, with expected sales growth of 8 percent to 9 percent from the current business portfolio, as well as contributions from Ingenuity and CLC Bio exceeding an adverse impact of up to approximately 4 percentage points from reduced sales of HPV products in the US. Qiagen said its adjusted EPS is expected to increase to a range of $1.07 to $1.09.
Qiagen CEO Peer Schatz noted in a statement that the company has created a focus on five growth drivers.
"Adoption of our QIAsymphony automation platform continues to set new standards, and we recently completed important US regulatory submissions for the full QIAsymphony workflow and are expanding the test menu," Schatz said.
In addition, the company continues to drive "global expansion of the QuantiFeron-TB latent tuberculosis test, which is set to exceed $100 million of sales in 2014," Schatz said. "We are also seeing strong momentum in our industry-leading personalized healthcare portfolio with a significant number of new partnership agreements signed in 2013."
"We have reached several new agreements for co-development projects with growing interest from pharmaceutical companies following the US regulatory approval of our TheraScreen EGFR companion diagnostic kit in July," Schatz said on a conference call Thursday morning. "Uptake of our companion diagnostics is improving in the US following progress on reimbursement issues. We are pleased with the premium pricing achieved with our evidence-based reimbursement strategy."
Finally, in bioinformatics and next-generation sequencing, two emerging growth drivers for the company, "we are moving ahead with initiatives to expand our portfolio of universal products and services — particularly our leadership in bioinformatics analysis and interpretation — as well as developing the sample-to-insight GeneReader NGS benchtop workflow," Schatz noted.
Further detailing its plan to launch a series of HAI assays for the QIAsymphony platform, Qiagen said that it has submitted the Artus C. difficile QS-RGQ MDx kit to the FDA after having received CE marking and launching the kit in Europe in December.
Further, Qiagen has submitted to the FDA the QIAsymphony RGQ MDx system, a modular platform that comprises the QIAsymphony SP for sample preparation, the QIAsymphony AS for assay setup, and the Rotor-Gene Q instrument, which received FDA clearance in 2012.
While the QIAsymphony platform has the broadest menu in its category in Europe and other markets, the system is currently primarily used for laboratory-developed assays in the US, Qiagen noted.
The Artus C. difficile QS-RGQ MDx kit was developed in partnership with IntelligentMDx under a multiyear agreement.
Qiagen said that tests for vancomycin-resistant enterococci and methicillin-resistant Staphylococcus aureus and S. aureus are in an "advanced stage of development" and will be submitted for FDA clearance this year, followed by further additions to its HAI panel as well as other panels, such as personalized healthcare and infectious diseases. Overall, the company said, about 35 new tests are currently in the pipeline.
In Thursday morning trade on the Nasdaq, shares of Qiagen were down around 2 percent at $22.16.