) is all set to jump in the next-generation sequencing (NGS)
bandwagon and plans to invest big to serve new and untapped areas
like clinical research and molecular diagnostics space beyond NGS'
current focus on life sciences research. The company expects to
release the launch plan and specifications in early 2013.
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The advanced initiative of Qiagen will help develop
sample-to-result and cost-effective NGS workflows solutions, which
will combine the company's sample preparation and assay products
with a next-generation benchtop sequencer, which was developed
subsequent to the company's recent acquisition of sequencing expert
Intelligent Bio-Systems (declared lately). Additionally, the
company will include new bioinformatics into the workflows, which
came into existence after a recent collaboration with SAP AG.
The first sample-to-result NGS solution is slated to be launched in
The NGS market is currently growing by leaps and bounds and is
estimated to be more than $1 billion within a year. We expect the
NGS technology, which is currently emphasizing mainly on life
sciences research, to grow further with greater focus and expansion
into new areas with huge potentials such as clinical research and
molecular diagnostics space.
This new product portfolio of Qiagen will cater to a large customer
base with main focus on clinical research in Academia and Pharma as
well as in some Molecular Diagnostics franchises, including select
areas of Personalized Healthcare. Although Qiagen expects the
expansion of NGS portfolio in the new markets to be dilutive to
adjusted EPS by a penny in fiscal 2012 and by approximately 2 cents
in fiscal 2013 but expects this to be accretive to the financial
results from fiscal 2014 onwards.
We are encouraged by Qiagen's focus on strategic initiatives to
drive growth and profitability in the molecular diagnostics market.
Its advanced initiatives to expand the NGS portfolio are expected
to accelerate the company's sales on the back of growing market
demand, not only domestic but worldwide.
The NGS market is highly competitive with the presence of players
Life Technologies Corporation
). In NGS, Illumina sells its Genome Analyzer instrument and
related consumables and has emerged as a major provider in this
growing market. Life Technologies directly competes in this space
with Illumina with its Ion Torrent franchise. While Illumina
launched its HiSeq 2500 in the beginning of 2012, the scheduled
launch of Ion Proton Benchtop sequencer of Life Technologies in the
second half of 2012 is expected to increase the competition in this
space for Qiagen.
Currently, Qiagen retains a Zacks #2 Rank (short-term Buy). Over
the long term, we are Neutral on the stock.