On July 13, 2020 QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) reported additional information on preliminary results for the second quarter and first half of 2020, along with an outlook for continued strong growth trends in the third and fourth quarters of 2020 (Press release, Qiagen, JUL 13, 2020, View Source [SID1234561826]). QIAGEN also provided initial perspectives that business trends are expected to continue at a solid pace during 2021 and an update on the potential future impact of the coronavirus pandemic.
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Second quarter and first half 2020 results
As an update to the announcement on July 9, 2020, net sales for the second quarter of 2020 were $443 million, an increase of 19% at constant exchange rates (or CER) (previously 18-19% CER) and 16% at actual rates from $382 million in the same period of 2019. Instrument sales increased 48% CER and 45% at actual rates in the second quarter of 2020 to $68 million from $47 million in the same period of 2019, while sales of consumables and related revenues rose 14% CER and 12% at actual rates to $375 million from $335 million in the year-ago period. Among the customer classes, Life Sciences sales advanced 25% CER and 23% at actual rates to $239 million from $194 million in the second quarter of 2019, while Molecular Diagnostics sales grew 12% CER and 9% at actual rates to $204 million from $188 million in the year-ago period. The QuantiFERON-TB test for tuberculosis detection ($33 million, -46% CER, -46% at actual rates) faced significant headwinds in the U.S. and Europe due to reduced demand, but experienced accelerating trends in regions where quarantines and lockdown measures have been eased.
Adjusted earnings per share (EPS) for the second quarter of 2020 are now expected to be $0.56 CER (previously $0.55-0.56 CER) based on preliminary results, an increase of about 70% from $0.33 in the second quarter of 2019. Results were also well above the outlook announced on May 5, 2020, for at least $0.40 CER.
For the first half of 2020, net sales were $815 million, an increase of 14% CER and 12% at actual rates from $730 million in the first six months of 2019. Adjusted EPS are expected to be $0.90 CER based on preliminary results, an increase of 50% CER from $0.60 in the first half of 2019.
The release of full second quarter and first-half 2020 results remains planned for August 4, 2020.
Third quarter and full-year 2020 outlook
For the third quarter of 2020, QIAGEN expects net sales growth of approximately 16-21% CER compared to $383 million in the same period of 2019, and adjusted EPS to grow approximately 45-60% CER to about $0.52-0.58 CER from $0.36 in the year-ago quarter. This outlook is based on expectations for a continuation of trends from the first half of 2020 into the third and fourth quarters of the year. Sustained elevated demand for coronavirus test products is expected to more than offset weaker year-over-year sales trends in other areas of the portfolio, which are being adversely impacted by quarantines and lockdown actions in countries around the world.
For full-year 2020, QIAGEN expects net sales growth of approximately 15-18% CER from the 2019 level of $1.53 billion and adjusted EPS growth of at least 40% CER to at least $2.00 CER from $1.43 per share in 2019. The outlook for adjusted EPS does not include any potential capital gain that could result from the expected divestiture of its minority investment in ArcherDX.
Perspectives for 2021
In terms of business trend perspectives for 2021, QIAGEN currently assumes that the first SARS-CoV-2 vaccine would become progressively available on a large scale during the year, but that coronavirus
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testing products will be required for a longer-term period before demand starts to recede. QIAGEN also expects to see recovery trends continuing in other areas of the portfolio during the course of 2021. Based on these assumptions, QIAGEN currently expects a continuation of net sales growth at a double-digit CER pace for 2021 compared to full-year 2020 results, and for adjusted EPS growth of at least 18% CER from the results in 2020.
Sample to Insight portfolio update
These perspectives take into account the following developments:
•RNA production capacity and instruments: QIAGEN’s production capacity for viral RNA extraction solutions exceeded 12 million patient samples per month as of June 30, 2020, ahead of the previously announced plan for at least 10 million patient samples per month. QIAGEN is on track to reach its goal for more than 20 million patient tests per month during the fourth quarter of 2020.
In addition, QIAGEN is ramping up production capacity for consumables used on automation systems and instruments, with ongoing strong demand for QIAGEN platforms. These include 200 new placements of the QIAsymphony automation system in the first half of 2020, representing a 60% increase from the prior-year period and building on more than 2,500 cumulative placements of this flagship system at the end of 2019. In the QIAcube family of sample processing instruments, more than 415 new placements of QIAcube Connect and 175 new placements of the QIAcube HT high-throughput version were nearly double the placement levels in the same period of 2019, building on over 8,000 cumulative placements of QIAcube platforms at the end of 2019. Additionally, about 250 new placements of the EZ1 instrument were completed in the first half of 2020, an increase of more than 100% from the first half of 2019, adding to over 3,750 cumulative placements at the end of 2019. Given the current demand levels, QIAGEN is also expanding production capacity for viral RNA extraction solutions that can be used on high-throughput third-party instruments.
•QIAstat-Dx: QIAGEN continues to increase cartridge production capacity at two sites in Europe amid high demand for the QIAstat-Dx syndromic system and the QIAstat-Dx Respiratory SARS-CoV-2 Panel, a test available in the U.S., Europe and other countries to differentiate the novel coronavirus from 21 other respiratory pathogens. Cumulative placements of QIAstat-Dx are now approximately 1,500 systems.
•NeuMoDx: QIAGEN has reached an amended agreement to acquire the remaining 80.1% stake in NeuMoDx Molecular, Inc. that it does not currently own. The timing of closing is dependent upon the outcome of Thermo Fisher Scientific Inc.’s announced plans to fully acquire QIAGEN in a voluntary public tender. The acquisition of NeuMoDx requires customary regulatory approvals and clearances. QIAGEN expects NeuMoDx to provide significant sales contributions in the future based on its differentiation as a rapid, integrated PCR-based platform that offers a dedicated COVID-19 test as well as tests for an increasing number of other infectious diseases. Additionally, a new multiplex test combining analysis for influenza, RSV (respiratory syncytial virus) and the SARS-CoV-2 virus is planned to be launched on the NeuMoDx systems in the second half of 2020.
•OEM components for other diagnostic suppliers: QIAGEN continues to scale up production capacity at sites in the U.S. and Europe for reagents purchased by other diagnostic companies for use in their own COVID-19 testing solutions. These products include individualized components such as enzymes and PCR mixes.
•Antibody test in development: QIAGEN plans to launch in the second half of 2020 a serology test (assessing the body’s immune response to the coronavirus via antibodies) and a rapid antigen test (detection of an active coronavirus infection). These two tests are designed to complete QIAGEN’s portfolio of tests for use in coronavirus testing.
•Digital PCR: The first units of the QIAcuity digital PCR platform are scheduled to be installed in August 2020 as QIAGEN begins full commercialization. QIAGEN has a strong pipeline of customer leads, and has increased production capacity in light of higher-than-expected demand.
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QIAcuity is a series of differentiated new platforms designed to make highly versatile digital PCR technology available to Life Sciences laboratories worldwide.