On Sep 25, we issued an updated research report on Qiagen N.V. (QGEN) – a leading provider of technologies and products for the separation, purification and handling of nucleic acids DNA/RNA. Qiagen once again posted in-line results in the second quarter of 2014. However, the company demonstrated a healthy top line across all its product categories and customer classes.
The company reported second-quarter adjusted earnings per share of 25 cents, which increased 4.2% year over year but were in line with the Zacks Consensus Estimate. Likewise, adjusted net sales were up 4% at CER to $331.2 million, in line with the Zacks Consensus Estimate.
Overcoming the expected decline in U.S. HPV test product sales, molecular diagnostics registered impressive growth and consequently, we are upbeat about the huge potential of this still untapped market on a global basis. According to the company, it is still a small part of the global in vitro diagnostics market, and is currently the fastest growing segment at a projected compound annual growth rate of 10% or more.
Moreover, Qiagen demonstrated growth in all regions outside the U.S. with the Europe / Middle East / Africa region stealing the show on the back of solid performance in the Nordic region, Turkey and the U.K. Improving results in Southern Europe. China, Japan and the other emerging markets also contributed to growth. In China, following the launch in late March, the rollout of QuantiFERON latent TB test is proceeding successfully with continuous strong uptake, in line with the company’s expectation.
Qiagen is also progressing well with the testing menu expansion strategy. Strategic collaboration is another upside likely to drive growth over time.
However, the company is facing increasing competition from companies that provide pre-analytical solutions as well as other products used by Qiagen’s customers. Further, strong reliance on relationships with collaborative partners and foreign exchange headwinds are other downsides.
Other Stocks to Consider
Qiagen currently carries a Zacks Rank #3 (Hold). However, better-ranked stocks worth considering in the same sector are Anthera Pharmaceuticals, Inc. (ANTH), Heska Corporation (HSKA) and Gilead Sciences Inc. (GILD), each with a Zacks Rank #1 (Strong Buy).
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