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Morningstar | Qiagen's Molecular Diagnostics Focus Should Improve Growth Outlook

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 also 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, and companion diagnostic collaborations with pharmaceutical manufacturers. Qiagen's new QIAstat-Dx and NeuMoDx PCR product lines should also help bolster the company's competitive position in the high-growth molecular diagnostics market. Qiagen’s QIAsymphony instrument installed base also continues to grow thanks to demand for greater automation among hospital and independent diagnostic labs. Thanks to stable global academic and government research spending budgets combined with increased consolidation in the pharmaceutical market, we expect moderate 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 the evolution of clinical sequencing tests and tough competition from more established peers with larger instrument installed bases, including Illumina and Thermo Fisher. Despite its fast growth, Qiagen's sequencing business remains a small part of overall operations.