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Qiagen Shutters NeuMoDx Business, Reaffirms Q2 Outlook

NEW YORK – Citing changing customer needs for integrated PCR-based clinical molecular testing systems, Qiagen announced on Thursday that it will discontinue its NeuMoDx business.

"This decision underscores our unwavering commitment to focus where we can develop profitable leadership positions and frees up resources to invest in other portfolio areas," Qiagen CEO Thierry Bernard said in a statement.

Qiagen acquired Ann Arbor, Michigan-based startup NeuMoDx in September 2020 for $248 million.

At the time of the acquisition, the NeuMoDx 96 and NeuMoDx 288 molecular systems were described as combining proprietary extraction technologies, microfluidics, and silicon-based thermal cycling for fully automated, sample-to-answer, random-access molecular testing with the ability to process both commercial assays and laboratory-developed tests. The NeuMoDx technology was also the subject of a patent infringement lawsuit filed in 2019 by Becton Dickison, which Qiagen settled in 2021 for $53 million.

The NeuMoDx systems currently run a menu of approximately 16 CE-IVD assays, but only two of the assays have regulatory clearance from the US Food and Drug Administration.

Following a nearly 60 percent decline in NeuMoDx sales in October, Bernard said that the business's continued inclusion in the firm's five pillars of growth depended on its business outlook, adding that the product and the team needed to deliver. In April, following a nearly 30 percent decline in NeuMoDx sales, Bernard said on a call with investors that the firm was reviewing its options for the business. 

In Thursday's statement, Bernard said that although the systems played a critical role during the COVID-19 pandemic, "the market dynamics have since changed considerably, and we do not see a realistic path to developing this system in a value-creating way."

Qiagen said it will continue to provide support for existing NeuMoDx users during a transition period into 2025, including ongoing maintenance, technical support, and the provision of necessary consumables for a specified period.

The firm also said it will offer support in helping customers transition to other solutions.

Qiagen also reaffirmed its second quarter outlook for net sales of at least $495 million at constant exchange rates (CER) and adjusted diluted EPS of $.52 CER. It also raised its full-year projection to adjusted diluted EPS of $2.14 at constant exchange rates from at least $2.10 CER projected previously.

The firm has begun discussions with NeuMoDx customers to review the implications of this decision on its 2024 NeuMoDx sales forecast for at least $55 million CER. It expects to incur a restructuring charge of approximately $400 million that will be recognized primarily in Q2 of 2024. The restructuring charge will be excluded from adjusted results, Qiagen said, and involves approximately $300 million of noncash charges, including $90 million for inventory, with $120 million for acquired intellectual property making up the bulk of approximately $210 million in charges for long-term assets.

Cash charges involve commitments to customers and suppliers, severance payments, and other obligations, Qiagen said, adding that related workforce reductions "will be handled in a socially responsible manner with respect for affected employees and in compliance with local labor laws." The firm did not disclose how many employees would be affected by the decision.