On Oct 9, 2015, we issued an updated research report on Qiagen N.V. QGEN, a global provider of sample and assay technologies. The company is slated to release its third-quarter 2015 earnings on Oct 28.
Qiagen reported impressive second-quarter 2015 results, which beat the Zacks Consensus Estimate on both the top and bottom-line fronts. However, on a year-over-year basis, results were a mixed bag, characterized by a declining revenue and increasing EPS scenario. Nevertheless, Qiagen exceeded its targets for adjusted net sales and earnings growth at CER, despite facing adverse currency movements that significantly affected the quarter’s results.
Meanwhile, we are impressed with the company’s current focus on international expansion. In the last reported quarter, the company witnessed growth across all the regions outside the U.S. with Asia-Pacific / Japan leading the show (growing at 14% at CER) on the back of high single-digit growth in China and solid contributions from Korea, India and Japan.
The Europe / Middle East / Africa region recorded 3% growth at CER, buoyed by solid growth in Germany, Turkey and the U.K. The top seven emerging markets advanced at a dynamic pace with 11% growth at CER on the back of increasing sales contributions from Turkey, Korea, India, China and Mexico, which outweighed the weakness in Brazil and Russia.
Qiagen is also progressing well with the testing menu expansion strategy. Earlier in October, the company launched a new hereditary disease solution for research labs to accelerate solve rates in diagnostic odyssey cases, where researchers will be able to directly focus on the right causal candidates. The offering includes Qiagen’s Biomedical Genomics Workbench, Biomedical Genomics Server Solution, Ingenuity Variant Analysis and HGMD Human Gene Mutation Database.
Alongside, in Jul 2015, Qiagen’stherascreen EGFR RGQ PCR Kit won the FDA approval as a companion diagnostic to guide the use of AstraZeneca’s IRESSA (gefitinib) in patients with advanced or metastatic non-small cell lung cancer (NSCLC).
However, the company continues to face increasing competition from firms that provide competitive pre-analytical solutions and other products used by Qiagen’s customers. Also, Qiagen’s financial position may worsen with the strengthening of the domestic currency against high-focus nations, owing to its huge presence in the international market.
The stock currently carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
Some better-ranked stocks in the broader medical sector are Anika Therapeutics Inc. ANIK, Dynavax Technologies Corporation DVAX and Intra-Cellular Therapies, Inc. ITCI. All the three stocks carry a Zacks Rank #2 (Buy).
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