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Qiagen Q2 Revenues Grow 4 Percent; Firm Nudges Up Full-Year Guidance

NEW YORK (GenomeWeb) – Qiagen reported on Thursday that its second quarter revenues grew 4 percent year over year or 6 percent at constant exchange rates, prompting the firm to slightly raise its full-year adjusted revenue guidance.

For the three months ended June 30, the company reported revenues of $349.0 million, up from $334.4 million a year ago, and beating the average Wall Street estimate of $346.6 million.

Qiagen CEO Peer Schatz noted in a conference call recapping the company’s earnings that adjusted net sales (at constant exchange rates and adjusting for a restructuring charge) rose 7 percent, exceeding financial targets that Qiagen had set for the second quarter.

By product category, Qiagen said that Q1 consumables sales, which make up about 88 percent of the company’s overall sales, rose 8 percent at constant exchange rates (CER) to an adjusted figure of $309 million. This growth offset instrument sales which fell 4 percent at CER for adjusted revenues of $40 million.

Despite the soft instrument sales, Schatz noted during the conference call that the company is “very pleased with customer demand for the GeneReader NGS system.” He noted that Qiagen recently launched two new panels for deep analysis of breast and lung cancer samples, and has also initiated customer access to a “practically unlimited panel content offering with our customized channel for panel design.”

In addition, Schatz noted that sales trends for the QiaSymphony modular and automated molecular diagnostics platform were very strong, and that the company is on track to exceed its goal of more than 2,000 cumulative placements by the end of the year along with “robust growth in related consumables.”

By customer class, molecular diagnostics, accounting for 48 percent of sales by customer class, rose 6 percent at CER to $168 million in Q2, led by QuantiFeron latent TB testing, which the company said is on track for more than 25 percent CER growth for the year. Qiagen highlighted the fact that in Q2 France’s Ministry of Health and Social Affairs approved the reimbursement of the QFT-Plus test for screening at-risk individuals for latent TB infection.

The molecular diagnostics customer class also includes companion diagnostic co-development revenues, which increase 28 percent at CER, and US HPV test sales, which grew 11 percent at CER. Qiagen noted for the first time in several quarters that no headwinds from declining HPV test sales were seen in the recently completed quarter.

In other customer classes, applied testing rose 12 percent at CER for adjusted revenues of $33.0 million, driven by market share gains in forensics and human ID testing. Sales to pharmaceutical customers rose 8 percent at CER to $71 million, and academia sales rose 4 percent at CER to $78 million.

Net income attributable to owners of Qiagen fell 34 percent to $14.0 million, or $.06 per diluted share (based on 232.7 million diluted shares), from $21.3 million, or $.09 per share (based on 238.7 million diluted shares), in the same quarter of 2016. Adjusted EPS was $.25, falling short of analysts’ average estimate of $.28 per share. However, excluding a pre-tax restructuring charge of about $13.5 million in the quarter, adjusted EPS was $.30 per share, Qiagen said.

Qiagen had announced a restructuring initiative in Q4 2016 to sustain faster sales momentum and improve efficiency. The company said today that it has expanded the scope of this restructuring to capture greater benefits from shared service centers and digitization. As such, the $13.5 million restructuring charge in Q2 increased from a previous target of about $6 million.

The company spent $38.8 million on R&D in the recently completed quarter, down 8 percent from $42.0 million a year ago. Qiagen’s SG&A expenses were $153.7 million in Q2, up 19 percent from $129.2 million a year ago.

Qiagen ended the quarter with $542.8 million in cash and cash equivalents.

Based on its performance in the first half of the year, Qiagen upped its full-year 2017 guidance for adjusted net sales growth to about 7 percent at CER from a previous range of 6 percent to 7 percent at CER. This includes about five to six percentage points of organic growth from the portfolio (including about one percentage point of headwind from reduced US HPV test sales) and approximately one to two percentage points from the acquisitions of Exiqon (acquired in June 2016) and, to a lesser extent, OmicSoft (acquired in January 2017).

Qiagen reaffirmed its previous guidance for adjusted diluted EPS of $1.25 to $1.27 per share at CER. For the third quarter of 2017, adjusted net sales are expected to rise approximately 7 percent at CER from the prior-year quarter and adjusted diluted EPS is expected to be approximately $.32 to $.33 at CER excluding restructuring charges.

Qiagen’s shares were down around 4 percent in Friday morning trading on Nasdaq.

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