Molecular diagnostics solutions provider,
Qiagen
(
QGEN
) recently got the nod of the U.S. Food and Drug Administration
("FDA") to market the therascreen KRAS RGQ PCR Kit (therascreen
KRAS test), which helps in determining the responsiveness of the
metastatic colorectal cancer patients to the drug Erbitux
(cetuximab). Qiagen considers this FDA approval of the therascreen
KRAS test as a major breakthrough in the company's international
expansion of its Personalized Healthcare franchise that comprises a
huge portfolio of molecular companion diagnostics to guide
treatments in oncology.
The drug Erbitux is an epidermal growth factor receptor (EGFR)
inhibitor and is used to treat colon and rectum cancer. It is also
beneficial for head and neck cancer treatment. Currently, this drug
is marketed in the U.S. by
Bristol-Myers Squibb Co.
(
BMY
) and
Eli Lilly & Co.
(
LLY
).
With the current estimation of roughly 110,000 colorectal cancer
patients a year, Qiagen encouragingly noted that the annual sales
of the KRAS test in colon cancer in the U.S. should be around $20
million annually. Hence, the company is expected to gain major
traction in the companion diagnostics market on the heels of this
latest development.
Notably, Qiagen already successfully markets a broad range of
companion diagnostic tests covering 30 biomarkers in Europe,
Asia/Pacific and Japan. The company currently offers 10 CE-marked
tests based on real-time PCR technology or Pyrosequencing in
Europe.
The new development should fit well in the company's product
portfolio as Qiagen has been pursuing the development of molecular
detection platforms across the world. We remain encouraged by
Qiagen's focus on strategic initiatives to drive growth and
profitability in the companion diagnostics market. Its innovative
tests in the genomic/esoteric arena with a focus on the high-margin
esoteric testing business are expected to accelerate sales in the
next several quarters. Qiagen's long-term strategy involves
technological advancement and new product introduction that can
hugely enhance its competitive advantage.
However, the company is facing mounting competition in the
molecular diagnostic space especially from players like
Quest Diagnostics
(
DGX
),
Laboratory Corporation of America Holdings
(
LH
) and
Myriad Genetics
(
MYGN
). Currently, Qiagen retains a Zacks #3 Rank (short-term Hold
rating).
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