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QIAGEN Ties Up With Natera, Boosts GeneReader NGS Platform

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In a bid to fortify its position in the DNA testing platform, QIAGEN N.V. (QGEN - Free Report) recently entered into a 10-year collaboration agreement with Natera, Inc. (NTRA - Free Report) . Natera is a developer of next-generation sequencing (NGS) assays encompassing non-invasive prenatal genetic testing and the analysis of circulating tumor DNA.

Per the agreement, both companies will jointly develop cell-free DNA assays for use on QIAGEN’s GeneReader NGS System. Moreover, QIAGEN’s customers using these and other assays in combination with the QIAGEN Clinical Insights (QCI) bioinformatics solution will be entitled to use Natera’s Constellation software.

Financial Details

In regard to this deal, QIAGEN is liable to pay Natera $40 million in prepaid royalties and upfront licensing fees in first-quarter 2018. Further, QIAGEN will pay an additional $10 million of milestone payments to Natera, along with the ongoing royalty payments. Moreover, per the terms of the agreement, the companies will have to incur the development costs for the assay.

 

 

Strategic Collaborations — A Key Growth Driver

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 certain of their existing and potential products.

In this regard, last October, QIAGEN announced a partnership and co-marketing agreement with CENTOGENE AG. According to the agreement, QIAGEN will integrate its bioinformatics suite with CENTOGENE’s CentoMD rare disease variant database with an aim to improvise test understanding. This integration of CentoMD phenotype/genotype database is expected to considerably enhance the QIAGEN Knowledge Base and QIAGEN Clinical Insight (QCI) bioinformatics solution. Additionally, QIAGEN will act as the authorized and exclusive international commercial distribution partner of CentoMD.

Solid Next-Generation Sequencing (NGS) Platform Projection

QIAGEN has highlighted certain strategies to boost top-line contributions from the NGS portfolio to $140 million in 2018 from more than $115 million in 2017. Notably, this platform has been witnessing double-digit revenue growth over the past few quarters.

Management aims to expand the NGS platform by rapidly scaling-up the new Enterprise Genomics Services. It also plans to introduce the proprietary, new third-generation chemistry and a range of proprietary Digital NGS technology-based new gene panels within the GeneReader system. Per management, innovative GeneReader NGS chemistry is prepared for a launch and is based on proprietary formulations.

Also, the GeneRead QIAact Myeloid panel — a latest gene panel — is geared up for an early 2018 launch. Furthermore, upgraded versions of the GeneRead QIAact BRCA 1/2 gene panel and QIAact Actionable Insights Tumor Panel FPPE gene panel are in the cards. The upgradation will involve making complete use of QIAGEN’s proprietary Digital NGS technology with the addition of further relevant genes.

Share Price Performance

QIAGEN has been gaining investor confidence on consistently encouraging results. Over the past three months, the company’s share price has outperformed its industry. The stock has gained 8.8% compared with the broader industry’s 3.4% gain.

Zacks Rank & Key Picks

QIAGEN carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) and athenahealth, Inc. .

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is another Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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QIAGEN N.V. (QGEN) - free report >>

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