QIAGEN Acquires Comprehensive Portfolio of Molecular Food Safety Tests
Addition of 70 assays enables the company to offer a complete workflow in food testing and to strengthen its fastest growing business segment
Germantown, MD and Hilden, Germany - May 25, 2010 - QIAGEN (NASDAQ: QGEN; Frankfurt, Prime Standard: QIA) today announced that it has entered into an agreement with the Institute for Product Quality (ifp), pursuant to which QIAGEN has acquired all rights to 70 molecular food safety tests developed by the Berlin-based specialized laboratory center for food analysis. The transaction further strengthens QIAGEN's "Applied Testing" business segment, which also encompasses molecular testing systems for forensic applications, veterinary medicine and biodefense. No financial details were disclosed.
The tests acquired from ifp are based on the widely used real-time PCR (Polymerase Chain Reaction) technology and cover a broad range of molecular targets including genetic, bacterial, viral and other contaminants of foodstuffs. The tests can be fully automated using QIAGEN's own instruments such as the QIAsymphony and the Rotor-Gene Q. The transaction enables QIAGEN to offer complete solutions for all major applications in the food safety testing segment, covering entire workflows from the processing of primary samples to the final testing result.
"With this unique assay portfolio we are laying the foundation for a very strong position in the area of food safety testing and significantly strengthening the area of applied testing overall", said Peer Schatz, Chief Executive Officer of QIAGEN. "Applied testing represents an important growth area for our company. Here, we are focusing on select segments with a relevant market volume, a growing demand for molecular testing technologies and a high potential for growth. We believe that the food testing segment matches this profile and we look forward to continuously expanding our position in this market."
Applied testing currently accounts for 7% of the company's net sales, yet it is one of the most dynamic market segments for QIAGEN, with a revenue growth of 28% at constant exchange rates in the past quarter alone. Currently, QIAGEN's sales in applied testing predominantly go to customers in forensics, veterinary medicine and biodefense. Food safety testing is a steadily growing segment with an overall market volume of more than US$ 2 billion. The market breaks down into four application groups: detection of pathogens, quality controls (such as testing for components subjected to illicit genetic modification), detection of allergens and identification of animal species. The increasing demand for food safety testing is being driven by evolving consumer awareness, more stringent legal requirements and the growing needs of food manufacturers who find themselves confronted with ever more complex sample base materials, as well as new pathogens that are increasingly difficult to detect.
Molecular tests, and in particular real-time PCR-based assays, are gaining more widespread use in such applications as they are significantly faster and more reliable than traditional methods and also allow for the detection of genetic targets. With their help, for instance, food producers can obtain certainty as to the safety of their planned deliveries within less than 24 hours.
"The safety of our products is top priority for us," explains Andreas-Michael Peter, Director, Quality Management at food manufacturer Zentis in Aachen, Germany. "PCR methods are playing an ever more important role for us within the context of our quality controls, as they offer a maximum in reliability and speed in detection and documentation".
The share of PCR-based methods in the food safety area is approx. 15 - 20% of the overall market. Prior to adding a commercial test menu, QIAGEN addressed this segment with technologies for sample processing and reagents required for the development of customized "homebrew" tests. Molecular food safety testing using PCR technology is presently still more widespread in the USA than in Europe and Asia; in individual segments, it is meanwhile regarded as the gold standard. An example for its growing importance is the cooperation between QIAGEN and the Chinese Academy of Sciences. The program started in late 2008 and is aimed at developing molecular detection methods for pathogens in foodstuffs for the Chinese and international markets. Experts believe that such tests can set new standards in safety and protection of consumers.
ifp will continue producing all existing and future tests as an independent entity in Berlin, Germany. The first test kits are expected to be available through QIAGEN in the 4th quarter, 2010. QIAGEN therefore expects a negative contribution by the transaction to the adjusted earnings per share for 2010 of approx. US$ 0.01. The company is assuming positive profit contributions for the subsequent years. Until 2012 the company plans to expand the portfolio to the full number of 70 tests.
QIAGEN N.V., a Netherlands holding company, is the leading global provider of sample and assay technologies. Sample technologies are used to isolate and process DNA, RNA and proteins from biological samples such as blood or tissue. Assay technologies are used to make these isolated biomolecules visible. QIAGEN has developed and markets sample and assay products as well as automated solutions for such consumables. The Company provides its products to molecular diagnostics laboratories, academic researchers, pharmaceutical and biotechnology companies, and applied testing customers for purposes such as forensics, animal or food testing and pharmaceutical process control. QIAGEN's assay technologies include one of the broadest panels of molecular diagnostic tests available worldwide. This panel includes the first FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer. QIAGEN employs more than 3,500 people in over 30 locations worldwide. Further information about QIAGEN can be found at http://www.qiagen.com/.
Based in Berlin, ifp Institut für Produktqualität GmbH is an independent laboratory and competence centre for modern food analytics. As a service provider, the ifp offers its customers in this segment a complete range of services which include the awarding of seals of approval for the safety of foodstuffs. In addition to its service offering, the ifp also develops and produces innovative products for food safety testing, molecular diagnostics and veterinary medicine, and is involved in several research projects. The ifp's development pipeline comprises several novel product lines. In addition to molecular testing systems, the product portfolio also includes microbiological and immunological rapid tests. The products are distributed and commercialized on a global scale through a network of selected distribution partners. ifp employs 40 staff at the site. For more information about ifp, go to http://www.produktqualitaet.com/.
Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, markets, strategy or operating results, including without limitation expected operating results, are forward-looking, such statements are based on current expectations and assumptions that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations, regulatory processes and dependence on logistics), variability of operating results and allocations between business segments, the commercial development of the applied testing markets, personal healthcare markets, clinical research markets and proteomics markets, women's health/HPV testing markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, changing relationships with customers, suppliers and strategic partners, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including fluctuations due to general economic conditions, the level and timing of customers' funding, budgets, and other factors), our ability to obtain regulatory approval of our infectious disease panels, difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate and protect its products from competitors' products, market acceptance of QIAGEN's new products and the integration of acquired technologies and businesses. For further information, refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).