Qiagen beats slightly, raises guidance slightly . . .
>>Qiagen's 2nd-qtr profit rises, beats forecast
Mon Aug 6, 2007 4:22PM EDT
By Mantik Kusjanto
FRANKFURT, Aug 6 (Reuters) - Qiagen NV (QGEN.O: Quote, Profile, Research) (QGEN.DE: Quote, Profile, Research), fresh from a $1.6 billion acquisition of Digene Corp, posted a 60 percent rise in quarterly net earnings on Monday on strong demand for its genetic test kits for diagnosing diseases.
Second-quarter net profit at the Netherlands-based company was $22.58 million, up from $14.15 million a year ago. A poll of 10 analysts by Reuters had expected, on average, a net profit of $20.7 million for the period.
Excluding one-time items, such as acquisition and restructuring charges, Qiagen earned $25.8 million, or 16 cents a share, beating market expectations.
Sales for the second quarter rose 19 percent to $135 million, above analysts' estimates of $130.7 million.
Qiagen, which announced in June it would acquire Digene to expand into testing for cervical cancer and sexually transmitted diseases, said it now expected adjusted diluted earnings of 62 to 64 cents a share this year, up from 60 to 63 cents a share previously.
"We clearly have a strong performance, a better than expected performance in pre-Digene business," Chief Financial Officer Roland Sackers told Reuters.
For the combined company, Qiagen now expects revenues of $614 million to $635 million for the full year, up from $518 million to $535 million earlier. It expects adjusted diluted earnings of 55 to 59 cents a share.
Digene's flagship product is a test for the detection of human papillomavirus (HPV), the cause of essentially all cervical cancers. The market for HPV testing is estimated to be worth more than $1 billion.
Sackers confirmed all the synergy numbers announced in June, including cost synergies of $35 million to $45 million in 2008.
"We closed the deal within 57 days from announcement, which of course helped us in integration," he said. He estimated another $36 million to $38 million in revenue in the third quarter coming from Digene because of the quick closing.
Sackers also said the combined company now had "some significant upside potential," though it was too early to quantify.
"I see potential in rolling out certain Digene products even faster in Europe and Asia. We will probably have less impact on the cost side but more on the revenue side," he said.
Netherlands-based Qiagen's acquisition comes as major drug makers pursue vaccines for cervical cancer, which is the second most common cancer in women aged below 40.
The U.S. Centers for Disease Control and Prevention estimates that 6.2 million Americans acquire a new genital HPV infection every year and that 80 percent of women will be infected by the age of 50.
The U.S. Food and Drug Administration last year cleared Merck & Co Inc's (MRK.N: Quote, Profile, Research) cervical cancer vaccine Gardasil.
GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research) said in March it applied for U.S. approval of its Cervarix vaccine.
Since announcing its Digene purchase in early June, Qiagen shares have fallen about 1.5 percent, compared with a 6 percent dip in the pan-European DJ healthcare index (.SXDP: Quote, Profile, Research). <<
No reason not to continue holding for the long haul here, IMO.
Cheers, Tuck |
