Recently, Qiagen N.V. (QGEN - Free Report) gained the U.S. Food and Drug Administration (FDA) approval to commercialize its therascreen EGFR test. The test reflects positive outcome from the strategic collaboration with German pharmaceutical major Boehringer Ingelheim. Following the market launch, the molecular diagnostic company will substantially expand its addressable market as Qiagen continues to grow its gamut of tests.
The test will serve as a companion diagnostic to monitor the use of Boehringer Ingelheim's new targeted therapy, GILOTRIF or afatinib, for treatment of metastatic non-small cell lung cancer (NSCLC) in patients whose tumors have certain EGFR gene mutations. The company’s novel therascreen EGFR test allows clinicians to identify patients with positive EGFR mutation who are eligible for treatment with afatinib. The therascreen EGFR test will standardize workflow and improve standards of patient care on the back of improved analytical and clinical performance.
Qiagen remains optimistic about its partnership with Boehringer Ingelheim on afatinib. According to statistics, lung cancer is the most dangerous form of cancer with over 0.2 million new cases found in the U.S. each year. Statistics also show that NSCLC accounts for about 85% of all lung cancer cases (0.16 million deaths). Thus, the therascreen EGFR test represents a lucrative high volume market opportunity in the U.S.
According to company findings, the total market potential for the test is estimated at $35 million. The estimates are based on the untapped market opportunity of about 0.12 million patients suffering from metastatic NSCLS in the U.S., who could annually benefit from the test.
Qiagen believes that the regulatory approval in the U.S. represents a landmark in the company’s effort towards expanding its Personalized Healthcare franchise globally. The clearance also makes the therascreen EGFR test the third FDA-approved diagnostic kit to run on Qiagen’s well-regarded Rotor-Gene Q MDx, a molecular detection instrument that uses real-time PCR technology.
The therascreen EGFR test will be the second FDA-cleared companion diagnostic test to run on the Rotor-Gene Q MDx. The Rotor-Gene Q MDx belongs to the QIAsymphony family of products. The company expects rapid uptake of the tests as the majority of laboratories across the U.S. have adopted the therascreen KRAS test and the Rotor-Gene Q MDx.
We are encouraged by Qiagen’s effort to boost its portfolio of companion diagnostic test kits. The company has also collaborated with other pharmaceutical majors like Amgen Inc. (AMGN - Free Report) , Bristol-Myers Squibb Company (BMY - Free Report) and Eli Lilly and Company (LLY - Free Report) among others to expand its companion diagnostic portfolio.
However, dismal earnings performance in the first quarter of 2013 and the subsequent bearish estimate revision trend warrant caution. Further, the company’s negative earnings growth rate for the second quarter reflects that the stock has more downside left. Accordingly, the stock is presently out of favour as it carries a Zacks Rank #4 (Sell).