QIAGEN (QGEN) Gains From New Alliances Amid FX Headwind
QIAGEN’s QGEN business is expected to get a boost from its expanded test menu and growth-driving strategic collaborations. However, overdependence on relationships with collaborative partners and foreign exchange headwinds are major downsides. The stock carries a Zacks Rank #3 (Hold) currently.
QIAGEN’s long-term business strategy involves entering into strategic alliances as well as marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of some of their existing and potential products.
In October 2023, QIAGEN and Myriad Genetics collaborated to develop companion diagnostic tests in the field of cancer. The partnership aims to deliver innovative services and products to pharmaceutical companies, enabling the development and commercialization of proprietary cancer tests for the U.S. clinical market and providing distributable companion diagnostic test kits for the global market.
In July 2023, QIAGEN expanded its digital PCR offering for the development of cell and gene therapies in the biopharma industry.
QIAGEN is also progressing well with its testing menu expansion strategy, which is driving the company’s growth.
QIAGEN N.V. Price
QIAGEN N.V. price | QIAGEN N.V. Quote
In October 2023, QIAGEN launched the QuantiFERON-EBV RUO assay. This new addition to the QuantiFERON portfolio of assays is designed to support research in EBV infection and EBV-related malignancies by utilizing highly specific EBV antigens to stimulate a cell-mediated immune response, offering a dynamic view of the host’s active immune engagement with the virus.
In September 2023, QIAGEN added two new nucleic acid extraction kits, extending its eco-friendly QIAwave product line. The two new kits are QIAwave RNeasy Plus Mini Kit and QIAwave DNA/RNA Mini Kit, eco-friendlier versions of the RNeasy Plus Mini Kit and the All DNA/RNA Mini Kit.
QIAGEN’s NGS portfolio has been witnessing double-digit revenue growth over the past few quarters. Management aims to expand the NGS platform by rapidly scaling up new Enterprise Genomics Services. It is also working on the launch of a range of proprietary Digital NGS technology-based new gene panels within the GeneReader system. QIAGEN’s latest partnerships with NHS England and Element Biosciences are expected to add further growth momentum within the genomics business.
QIAGEN is one of the top three providers of human identification solutions, which have included sample preparation and PCR kits. The company is now leveraging this position as it expands into next-generation sequencing-based applications with the acquisition of Verogen. It acquired Verogen in early 2023, which is offering new ways to solve cases and bring resolution to those affected.
On the flip side, QIAGEN currently markets products in more than 100 countries. In many of these emerging markets, QIAGEN faces several risks. These include economies that may be dependent on only a few products and are therefore subject to significant fluctuations, weak legal systems that may affect the company’s ability to enforce contractual rights, exchange controls, unstable governments, and privatization or other government actions affecting the flow of goods and currency.
Recording more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may drag down the top and bottom lines further in the future.
Foreign currency transactions resulted in a net loss of $9.0 million and $4.1 million for the years ended Dec 31, 2021 and 2020, respectively.
Considering QIAGEN’s huge gamut of services, it is also susceptible to competitive headwinds. The company is facing increasing competition from firms that provide competitive pre-analytical solutions and other products used by its customers. The markets for some of the company’s products are highly competitive and price-sensitive. Other product suppliers may have significant advantages in terms of financial, operational, sales and marketing resources and experience in research and development.
According to the company, customers in the market for pre-analytical sample technologies and assay technologies display significant loyalty to their initial supplier of a particular product. As a result, it may not be easy to convert customers who have purchased products from competitors.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, HealthEquity, Inc. HQY and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 38.2% compared with the industry’s 9.4% rise in the past year.
HealthEquity, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 27.5%. HQY’s earnings surpassed estimates in each of the trailing four quarters, with the average being 16.5%.
HealthEquity has gained 8.2% against the industry’s 6.3% decline over the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 44.9% compared with the industry’s 3.7% rise in the past year.
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