QIAGEN acquires Enzymatics enzyme solutions unit, a leading enabler of NGS applications
- Enzymatics products used in 80% of all global NGS sequencing reactions
- Strengthens QIAGEN’s universal NGS product offering and strategy to offer complete NGS workflows from sample to insight
- Adds comprehensive R&D, manufacturing, formulation and analytical capabilities in enzymology
- Strategic partnership formed with ArcherDX, including technology and distribution rights to proprietary Archer NGS panel technology
- QIAGEN reaffirms fourth-quarter and full-year 2014 adjusted net sales guidance; charges to be taken related to acquisition and other restructuring activities
HILDEN, Germany and BEVERLY, Massachusetts, January 11, 2015 – QIAGEN N.V. (NASDAQ: QGEN, Frankfurt Prime Standard QIA) today announced the acquisition of the Enzyme Solutions Unit of Enzymatics, a world leader in the development, manufacturing, and OEM supply of enzymes essential to driving the adoption of Next-Generation Sequencing (NGS) and other genetic analysis technologies in life sciences research and clinical healthcare.
Enzymatics, a privately-held U.S. company founded in 2006, commercializes a comprehensive portfolio of reagents that are estimated to be used in more than 80% of all global NGS sequencing reactions. These enzymes are key ingredients across the workflows of all commercially available sequencing solutions.
The addition of this Enzymatics franchise adds a deep portfolio of capabilities to QIAGEN’s strategy to offer a complete NGS workflow from biological sample to valuable molecular insights as well as strengthens a broad and rapidly growing portfolio of “universal” NGS products compatible with any sequencer. The Enzymatics portfolio that has been acquired will be commercialized globally through QIAGEN’s direct, indirect and OEM channels.
“Enzymatics has distinguished itself as a premier enabler of the emergence of affordable, widely usable NGS sequencing”, said Peer M. Schatz, CEO of QIAGEN. “These solutions are a perfect fit with our leading offering of universal NGS products as well as with our strategy to develop integrated workflows that will help to drive the adoption of NGS in clinical healthcare. We are committed to supporting the global sequencing community through continued access to the solutions and products from Enzymatics’ world-class capabilities.”
“Enzymatics was founded to deliver high quality, cost-effective enzymes customized to meet the needs of scientists who create sequencing applications that are benefitting research and clinical markets today,” said Christopher Benoit, co-founder and Head of Enzymatics’ Enzymology Business, who has joined QIAGEN. “We are proud to support virtually all of the players in the marketplace. Joining QIAGEN now will allow us to stay focused on the needs of genetic analysis innovators while bringing our deep enzymology and customization expertise into QIAGEN’s worldwide organization.”
Enzymatics is credited with accelerating the advancement of NGS through the capability to rapidly develop and scale up the controlled manufacturing of a portfolio of analytical quality enzymes under ISO 13485 certification and ready for unlimited customization by industrial customers in the life sciences.
QIAGEN has acquired all assets relating to the Enzyme Solutions Unit of Enzymatics – including R&D, manufacturing, formulation, and analytical capabilities – which will further enhance the company’s expertise in enzymology. Approximately 50 employees have joined QIAGEN at the current Enzymatics site in Beverly, Massachusetts. Financial terms of the transaction, which was completed in December 2014, were not disclosed.
In addition, QIAGEN has entered into a strategic partnership with the newly founded company ArcherDX, which integrates the ArcherTM and Supply Chain Solutions businesses of Enzymatics. This agreement provides QIAGEN with technology and distribution rights for unique NGS products based on ArcherDX’s proprietary AMP™ chemistry, a target enrichment technology platform that enables the detection of gene fusions, without prior knowledge of fusion partners or breakpoints, and other targets that are considered to be especially critical for Personalized Healthcare in oncology.
“This relationship with QIAGEN will accelerate the global adoption of this very powerful ArcherDX technology”, said Stephen Picone, co-founder of Enzymatics and now Executive Director of Corporate Development at ArcherDX. “In addition, this relationship positions both companies to combine their respective competencies to provide comprehensive solutions for our pharmaceutical customers requiring companion diagnostics for precision medicine.”
For 2015, QIAGEN expects the acquired Enyzmatics activities to provide approximately $20 million CER (constant exchange rates) of incremental net sales (which takes into account overlapping product portfolios) and to be accretive by approximately $0.01 to adjusted diluted EPS. QIAGEN will provide guidance for 2015 with the publication of its fourth quarter and full-year 2014 results on January 29.
Following this transaction, QIAGEN will now take a business integration and acquisition-related pre-tax charge on operating income in the fourth quarter of 2014 of approximately $21 million (or approximately $0.06 per share of adjusted diluted EPS), and of which $18 million are non-cash items. These charges, which will be excluded from adjusted results, involve actions to reduce overlapping activities and sites, including the closing of the Gaithersburg, Maryland, site. In addition, following a review to further improve efficiency and effectiveness, QIAGEN will now take a restructuring-related pre-tax charge on operating income in the fourth quarter of 2014 of approximately $26 million (or approximately $0.08 per share), and of which $20 million are non-cash items. In line with QIAGEN’s policy, these restructuring charges, which primarily involve the impairment of various technology-related assets, will not be excluded from adjusted results. For full-year 2014, QIAGEN expects to have achieved its previously announced guidance for diluted adjusted EPS of $1.08 CER, but for these results to be reduced to approximately $1.00 CER as a result of the new restructuring charges.
QIAGEN is reaffirming its guidance for adjusted net sales growth of approximately 4% CER for both the fourth quarter of 2014 as well as the full year.
QIAGEN N.V., a Netherlands-based holding company, is the leading global provider of Sample & Assay Technologies that are used to transform biological materials into valuable molecular information. Sample technologies are used to isolate and process DNA, RNA and proteins from biological samples such as blood or tissue. Assay technologies are then used to make these isolated biomolecules visible and ready for interpretation. QIAGEN markets more than 500 products around the world, selling both consumable kits and automation systems to customers through four customer classes: Molecular Diagnostics (human healthcare), Applied Testing (forensics, veterinary testing and food safety), Pharma (pharmaceutical and biotechnology companies) and Academia (life sciences research). As of September 30, 2014, QIAGEN employed approximately 4,200 people in over 35 locations worldwide. Further information can be found at http://www.qiagen.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 its 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 customer classes, the commercial development of markets for our products in applied testing, personalized healthcare, clinical research, proteomics, women's health/HPV testing and nucleic acid-based molecular diagnostics; 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 products; 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 our products from competitors' products; market acceptance of QIAGEN's new products, the consummation of acquisitions, and the integration of acquired technologies and businesses. For further information, please refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).