On Mar 7, 2016, we issued an updated research report on Netherlands-based molecular diagnostics provider QiagenNVQGEN . The company provides innovative technologies and products for pre-analytical sample preparation and molecular diagnostics solutions.
Qiagen posted a disappointing fourth-quarter 2015, squarely missing the Zacks Consensus Estimate on account of a severe currency headwind and a poor show in the Molecular Diagnostics customer class.
Net sales were affected by a greater-than-expected currency headwind of 6%. Based on current exchange rates, management expects an adverse currency impact of 4% on sales growth and one cent on adjusted EPS in the first quarter of 2016. Any unanticipated currency headwind in high-focus markets may drag the top and the bottom line further in the near term.
This apart, the lower-than-expected performance in the company's companion diagnostic partnerships and lower revenues from instruments continued to hamper sales growth in Molecular Diagnostics.
Currently, Qiagen faces a tough competitive landscape, considering the huge gamut of services it provides. Moreover, the markets for some of Qiagen's products are rather competitive and price sensitive. As a result, other similar manufacturers may have significant advantages in terms of financial, operational, sales and marketing resources as well as experience in research and development.
Additionally, strong reliance on its relationships with partner companies to co-develop companion diagnostics paired with drugs that those companies either market currently or are developing for future use, remains another downside for Qiagen. This is because future sales of companion diagnostics depend to a high degree on the commercial success of the related medicines for which the tests have been designed for determining their use in patients.
On a brighter note, Qiagen's strong growth in the QIAsymphony automation platform is encouraging. Also, barring Molecular Diagnostics, the other three customer classes demonstrated decent growth in the last reported quarter, offering some respite. Qiagen's strong cash balance position is also impressive. Further, the company continues to see reasonable progress with its test menu expansion strategy.
Currently, Qiagen carries a Zacks Rank #4 (Sell).
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