Qiagen ups 2020/21 outlook despite industry scepticism

Chloe Kent 11 December 2020 (Last Updated December 11th, 2020 14:42)

Qiagen has raised its outlook for 2020 and 2021 amid continued demand for Covid-19 tests and a growing confidence in its post-pandemic future. But its stocks dipped 8% last month after Covid-19 vaccine trials proved successful, and some analysts remain sceptical about the company’s future.

Qiagen ups 2020/21 outlook despite industry scepticism
Covid-19 has massively driven Qiagen’s growth, offsetting the related falls in sales from other parts of the business. Credit: Shutterstock

Qiagen has raised its full-year 2020 outlook for growth of net sales and adjusted earnings per share (EPS) and is expecting a strong sales performance next year, after a tumultuous 12 months for the diagnostic technology provider.

The company has announced that it now expects net sales for Q4 to grow by 32% at constant exchange rates (CER) from $413.5m in the same period last year to nearly $546m. It also expects its 2020 net sales to grow by 22%, from $1.53bn last year to $1.86bn this year.

Qiagen expects these trends to continue into 2021, anticipating a net sales growth next year of 18-20% despite the chance that the demand for Covid-19 diagnostics could soften as vaccines are distributed.

Covid-19 has massively boosted Qiagen’s growth

Qiagen looked set to be bought by Thermo Fisher at the beginning of 2020, only for Covid-19 to raise confidence in its prospects as a standalone business. Now that the firm has turned down Thermo Fisher’s offer, it faces immense pressure to live up to these challenges.

Qiagen’s products include several different rapid, portable and antigen-based Covid-19 tests, which have boosted its shares by 30% since the pandemic began.

The company faced a slight wobble in late November, when several Covid-19 diagnostic developers saw a drop in their share prices following the announcements from Pfizer/BioNTech and Moderna that their Covid-19 vaccines had proven highly effective in clinical trials. Qiagen saw an 8% drop in its share price, but its value has since bounced back to be slightly higher than it was before the news.

Covid-19 has massively driven Qiagen’s growth, offsetting the related falls in sales from other parts of the business. The firm believes that the pandemic has accelerated its growth strategy and will allow it to prosper even as the crisis dies down. It has placed more than 3,300 new instruments throughout the year.

“We do not believe that vaccination kills testing,” said Qiagen CEO Thierry Bernard during a conference call on 8 December.

Bernard also suggested that a test-and-treat strategy could be the future of healthcare, noting the number of flu tests that are still administered annually despite the availability of flu vaccines.

T-cells and serology could be integral to the company’s future

Not all analysts are entirely convinced of the current Qiagen outlook, with both William Blair and Jefferies questioning the longevity of the company when Covid-19 has been so important to its growth.

William Blair analysts have pointed to several risks, including the difficulties involved with managing multiple areas of business, stiff market competition and the risk of Covid-19 related product sales dropping off faster than expected. Jeffries is also dubious about whether Qiagen will be able to deliver on its projected sales growth when the future of Covid-19 testing over the next few years is so uncertain.

But even as vaccines are rolled out, Qiagen maintains that there will be an ongoing need for Covid-19 testing, especially T-cell and serology tests that can evaluate a person’s immunity to the disease.

This week, the company launched a new Covid-19 blood test specifically designed for researchers working on understanding the body’s immune response to the disease. The test, which is based on Qiagen’s QuantiFERON platform, detects the activity of T-cells, which may provide longer-lasting immunity to Covid-19 than antibodies.

Evidence also suggests that T-cell responses can help predict the severity of Covid-19 infection in a patient, as well as their level of immunity following vaccination or viral recovery.