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Qiagen Reports 1 Percent Rise in Q2 Revenues; Lowers FY Expectations on Lagging China NGS Sales

NEW YORK – Qiagen on Wednesday afternoon reported preliminary second quarter financial results ahead of its full Q2 earnings release next week, and said that it is adjusting its full-year financial targets downward due to lower-than-expected sales of its sequencing products in China.

In Q2, Qiagen's net sales rose 1 percent year over year to $381.6 million from $377.2 million a year ago, and grew 5 percent at constant exchange rates (CER), in line with a previously provided outlook.

Instruments (about 12 percent of total sales) rose 9 percent at CER, while consumables and related revenues (88 percent of total sales) rose 4 percent at CER.

By customer class, Molecular Diagnostics grew 5 percent at CER, with sales of the company's QuantiFeron-TB tests growing 6 percent at CER, below the company's annual target of at least 15 percent CER growth due to a very strong year-ago Q2 amid the transition to the fourth-generation version of the test. Companion diagnostic co-development project revenues declined 21 percent at CER in Q2 to $11 million, also tampering overall growth in this segment.

Meanwhile, Life Sciences grew 5 percent, Pharma rose 4 percent, and Academia/Applied Testing jumped 5 percent, all at CER.

Qiagen's Q2 net income was $44.7 million, or $.19 per share, compared to $36.8 million, or $.16 per share, in the year-ago period. On an adjusted basis, Q2 EPS was $.33, or $.34 at CER, in line with the company's previously stated outlook.

Qiagen also said that it intends to restructure the current format of its next-generation sequencing partnership in China due to slower-than-expected uptake of in vitro diagnostic clinical sequencing in that country, although it didn't provide additional details. Qiagen originally inked the joint venture with China's Maccura Biotechnology in May 2017.

Sales from this partnership were expected to be about $30 million at CER for full-year 2019, and weighted primarily to the second half of the year. Therefore, as a result of its planned restructuring of the deal, Qiagen now expects full-year 2019 net sales growth of approximately 5 percent to 6 percent at CER from a previously stated range of 7 percent to 8 percent growth. Qiagen also said that it now expects full-year EPS of approximately $1.42 to $1.44 at CER, down from a previous range of $1.45 to $1.47.

For the third quarter, Qiagen expects net sales to grow 4 percent to 5 percent at CER and adjusted EPS of $.35 to $.36.

As previously announced, Qiagen will release its full Q2 financial results on July 30 after the close of the market.

In mid-morning trading on the New York Stock Exchange on Thursday, Qiagen's shares were down more than 5 percent to $37.89.