EUR 850.00 For Business Accounts Only

Morningstar | Qiagen's molecular diagnostics business and restructuring efforts should boost earnings growth.

Qiagen’s access to the molecular diagnostics market offers compelling growth opportunities, but the company’s struggle in the HPV segment exemplifies how quickly tides can turn from technological advancement in this young field. Qiagen is a significant player in the sample preparation niche of the life science and molecular diagnostics market. Over the past few years, Qiagen has successfully transformed its business to focus on this higher growth industry, but the company has faced a major setback the past few years in its U.S. HPV franchise, which now makes up less than 2% of sales, following new competition from Roche and reductions in test frequency from updated guidelines. We see brighter days ahead for Qiagen thanks to market penetration of its latent tuberculosis test, access to emerging markets, companion diagnostic collaborations with pharmaceutical manufacturers, and ongoing expansion of the molecular diagnostics market. Qiagen’s QIAsymphony instrument installed base continues to grow thanks to demand for greater automation among hospital and independent diagnostic labs, but management has work ahead to expand its test menu to match larger, more entrenched players. Thanks to weak global academic and government research spending budgets combined with increased consolidation in the pharmaceutical market, we’re less enthusiastic about growth in Qiagen’s academic and pharmaceutical segments.Qiagen has turned significant attention to genome sequencing, an emerging field with potentially disruptive consequences for established players in the life science and diagnostics markets. Qiagen now offers its own low-throughput benchtop genome sequencing instrument, called GeneReader, after considerable launch delays. Although low clinical adoption of this sequencing technology creates a large market opportunity, Qiagen faces an uncertain future in this field thanks to numerous unknowns surrounding regulation and evolution of clinical sequencing tests and tough competition from more established peers with larger instrument installed bases, including Illumina and Thermo Fisher. To date, the GeneReader launch has not created robust growth.