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Biotech / Medical : Trickle Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: scaram(o)uche who wrote (1038)	2/1/2002 8:38:26 PM
From: tuck	Respond to of 1784

OK, I'm gonna do QGENF, because it was an update, not an earnings call, thus quicker. I need to head out soon. ABI is important, and I'll do it Monday. QGENF sees 15% growth in global R&D spending, fueled by strong academic funding, and some strength from biotech. They see pharma budgets re-aligning toward genomics. This is QGENF's bailiwick. It likes to target "home brew" reagents with their own corporate version. These markets are still not deeply penetrated, so they see plenty of opportunity left. They have recently introduced the BioRobot 8000 clinical version. Diagnostics is a new frontier for Qiagen, but customers have been asking for this, and they have them identified. Should be a good a launch. They have also just introduced the high throughput plasmid purification platform they developed with Zymark. They will soon introduce their microarray products, developed with ZeptoSens, for purification and amplification of RNA. They see no competition here. I had a hard time understanding what they were saying about proteomics -- partly Kolpan's accent, and he was talking a bit fast here. They are clearly starting to emphasize that more than they did a few quarters ago. Something about a platform for purification & expression analysis, high and low throughput versions. The LT to be introduced in the 2nd quarter, the HT in the second half. They saw the market as being $500 million, which is big, but smaller than nucleic acids. They made the distinction between industrial versus R&D proteomics markets. It is unclear to me now which one, if not both, they are after. They guided to 30% revenue growth for '02, yielding roughly $350 million in revenue. EBIT margin of ~60%. This would yield $.38 in EPS, also a 60%+ growth rate. COGS flat, while SG&A is expected to drop from 15% in '01 to 12% in '02. R&D to be flat at 12%. There are 145 million shares out now. They expect similar growth rates in '03. Capex should decline somewhat with the opening of their new North American facility, but they are still working on the one in Berlin. The product mix is little changed: Consumables 67% of revenue, preanalytics & instruments 4%, something (probably oligos from Operon division) 15%, the balance synthetic DNA. They foresee possible munches in their core are of nucleic acid handling and purification, but also automation. modules, maybe complete solutions. Some companies -- ABI is one -- have carped about the delayed NIH budget. QGENF sees little effect on their business from this. Chiefly instrument sales, which are a small part of the mix. Responded to a question about the Luminex system assays. These are kinases immobilized on beads. The lab version will do 60 assays at once. An HT version is in the works, I guess. There are also applications in protein-protein interactions. I may throw in a bit more QGENF commentary later. For now, I will say that the stumble after 9/11 seems to have been temporary, and that they are executing well. At least some of their forays into new territory ought to be successful. Trickle and its manager remain long. Cheers, Tuck