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Transaction adds fundamental assay technology for high-resolution sequence detection and quantification of genetic variations
VENLO, The Netherlands, October 1, 2008 - QIAGEN N.V. (NASDAQ: QGEN; Frankfurt, Prime Standard: QIA) today announced that it has acquired all assets related to the Biosystems business from Biotage AB, a publicly listed developer, manufacturer and distributor of products for genetic analysis and medicinal chemistry headquartered in Uppsala, Sweden. The transaction is valued at approximately US$53 million in cash (subject to certain customary purchase price adjustments) and performance milestone payments of up to approximately US$7 million over the next four years.
The Biosystems unit of Biotage is best known for having pioneered Pyrosequencing®, which has become a fundamental technology in next-generation sequencing. Pyrosequencing is a patented assay technology that in special formats can achieve significantly longer runs and can be employed in a massively parallel design to address the needs for applications such as high volume data generation in whole genome sequencing applications. In its widely used standard format this technology provides the opportunity to read DNA-sequences up to 100 base pairs in real time and at a price per read in the single dollar range.
To automate the use of the Pyrosequencing technology, Biosystems has developed PyroMark instrumentation, the world's first real-time sequence detection system whose primary product family includes the PyroMark MD, PyroMark ID and PyroMark Q24. The system is considered to offer significant advantages over other sequence analysis technologies in short length sequence detection and quantification and to represent a synergistic addition to other detection technologies QIAGEN offers. For example, while detection methods such as PCR and qPCR allow to make "yes/ no" and "indirect quantitative" statements about the presence of a specific target with high sensitivity and specificity, Pyrosequencing provides a high resolution sequence detection and quantification down to reads of the level of a single base-pair and thereby allows detection not only of known but also of unknown DNA sequences or mutations in targeted regions.
The technology offers significant value for applications including:
* Epigenetics in research and molecular diagnostics: Pyrosequencing is the only proven technology that offers absolute and direct quantification of methylation patterns. Assessments and quantifications of methylation, a mechanism that controls gene-expression, help to better understand and predict diseases which are associated with abnormal methylation patterns, such as cancer.
* Multiplex analyses in genetic and pathogen detection: Due to its ability to be performed in parallel, Pyrosequencing assays have great utility in detecting a broad range of different targets in the same run. Unlike PCR based multiplex assays, this technology detects both known and unknown genetic variants in DNA target regions. Pyrosequencing assays are therefore used to perform analyses of oncogenes such as K-ras, which require the analysis of several sections of DNA and which are associated with colon and other cancers. The technology is also widely used for multiplexed genotyping of viruses, bacteria, fungi and others.
In 2003 Biotage licensed rights to certain massively parallel formats of the Pyrosequencing technology to 454 Life Sciences for a product development, which later became Roche's next generation sequencing platform. While this and other massively parallel formats are very useful for generating large volumes of data in whole genome sequencing applications, current cost and workflows make next generation sequencing technologies prohibitive for many key applications in research and molecular diagnostics. Many assays, such as K-ras cancer tests require the generation of smaller data volumes and target limited stretches of DNA in known regions. Many other assays have to be performed at prices ranging as low as under $10 per run. In these applications, the PyroMark solutions to sequence-based detection and quantification have proven to be of great value and are increasingly recognized for their capabilities to perform highly reliable, quantifiable reads at prices as low as $1 per 100 base pairs. With this acquisition, QIAGEN has therefore not only acquired fundamental technologies used in next generation sequencing formats, but added formats of this same technology which have significant utility for current and near term applications in areas including research and molecular diagnostics.
The acquisition of sequence-based detection and quantification technology complements QIAGEN's existing portfolio of detection platforms. Detection marks the final of the three steps which are performed in molecular testing. QIAGEN holds leading market positions in the first two steps (sample preparation and assay setup) and recently added strong positions in detection through the acquisitions of eGene (for DNA fragment analysis by capillary electrophoresis) and Corbett Life Science (for its real-time PCR platform). The addition of detection modules allows QIAGEN to offer its proprietary molecular testing solutions in solutions spanning from sample to result. The Biosystems solutions are compatible with QIAGEN's consumables and instruments. QIAGEN intends to optimize existing assays for use on PyroMark and also develop novel molecular diagnostics as well as research use tests for use with the platform and its successor systems.
"Pyrosequencing technologies are excellent complements to our portfolio of current and future molecular testing solutions, including our modular processing platform QIAsymphony", said Peer Schatz, CEO of QIAGEN. "We are proud to offer our customers in molecular diagnostics, applied testing, pharma and academic research 'sample to result' solutions which address further, significant information needs. Our 'sample to result' solutions now span qualitative/endpoint PCR, multiplex technologies, capillary electrophoresis as well as quantitative and high resolution sequence-based analysis. With Pyrosequencing, we are adding nothing less but a proven Gold Standard for high-resolution sequence detection and quantification which, due to its high level of reliability, accuracy, ease-of-use and cost-efficiency is widely used in today's next generation sequencing technologies. As such, QIAGEN is not only gaining financial interest and technological leadership in a core next generation sequencing technology, but is also addressing significant current and future needs in our core markets for quantitative, high-resolution sequence analyses of short-medium stretches."
"The fit with QIAGEN is extra ordinary and will be very beneficial for customers of both companies,'' Torben Joergensen, CEO of Biotage said. "QIAGEN has an excellent molecular assay and also epigenetic portfolios which perfectly fits together with our PyroMark instruments. Many of our customers are QIAGEN customers as well. In addition, QIAGEN's technology leadership in molecular sample and assay technologies, its global reach and extensive marketing, combined with strong relationships with researchers and leading laboratories around the world, bring exciting opportunities for Biosystems. QIAGEN is the ideal partner to take the Biosystems business to the next level and to fully exploit the Pyrosequencing technology.''
Under the terms of the agreement, QIAGEN has acquired all assets related to the Biosystems business for the consideration described above. This consideration includes also the purchase of the remaining 17.5% of the outstanding stock of Corbett Life Science Ltd. QIAGEN will assume all employees related to the Biosystems business. Biotage will also in accordance with a separate "transfer service agreement" provide certain administrative services to QIAGEN for the next twelve months.
QIAGEN expects to incur one-time charges of approximately US$0.02 in EPS in the fourth quarter of 2008 in connection with this acquisition. These charges primarily relate to in-process research and development and the write-off of certain assets. In addition, based on preliminary analyses and following the streamlining of Biosystem's product portfolio, QIAGEN expects this transaction to contribute approximately US$2.5 million in sales in the remaining three months of 2008 and approximately US$15 million in sales for the full year of 2009. On an adjusted basis excluding one-time charges, integration and restructuring costs, and amortization of acquisition related intangible assets, the acquisition is expected to be dilutive by approximately US$0.01 to EPS in the fourth quarter of 2008 and to be dilutive by approximately US$0.02 to adjusted EPS in 2009. Beyond 2009, it is expected that the acquisition will contribute significant accretion to net income.
Financial highlights of the acquisition:
QIAGEN acquires the assets related to the Biosystems business from Biotage for US$53 million in cash (subject to certain customary purchase price adjustments) and up to approximately US$7 million in milestone payments over the next four years.
* Expected to add revenues of approximately US$2.5 million in the remaining three months of 2008 and approximately US$15 million in sales for the full year of 2009.
* Expected one-time charges of approximately US$0.02 in EPS in the fourth quarter of 2008.
* Expected to be dilutive by approximately US$0.01 to adjusted EPS in the fourth quarter of 2008 and to be dilutive by approximately US$0.02 to adjusted EPS in 2009. Beyond 2009, it is expected that the acquisition will contribute significant accretion to net income.
About QIAGEN QIAGEN N.V., a Netherlands holding company, is the leading provider of sample and assay technologies. Sample technologies are used to isolate and process DNA, RNA, and proteins from biological samples such as blood or tissue. Assay technologies are used to make such isolated biomolecules visible. QIAGEN has developed and markets more than 500 consumable products as well as automated solutions for such consumables. The company provides its products to molecular diagnostics laboratories, academic researchers, pharmaceutical and biotechnology companies, and applied testing customers for purposes such as forensics, animal or food testing, and pharmaceutical process control. QIAGEN's assay technologies include what is considered to be the broadest panel of molecular diagnostic tests available worldwide. This panel includes the only FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer. QIAGEN employs more than 2,800 people in more than 30 locations worldwide. Further information about QIAGEN can be found at www.qiagen.com.
About Biotage Biotage AB is a Swedish company offering solutions within two fields: pharmaceutical chemistry, conducted in the Discovery chemistry business, and genetic analysis, which makes up the Biosystems business unit. The company's shares are listed at the Small Cap list at the OME Nordic Exchange. Biotage is headquartered in Uppsala, Sweden, and employs a staff of 336 in offices in 5 countries.
SAFE HARBOR STATEMENT Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, markets, strategy or operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations and risks of dependency on logistics), variability of operating results, the commercial development of the applied testing markets, clinical research markets and proteomics markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's, products (including fluctuations due to the level and timing of customers' funding, budgets, and other factors), our ability to obtain regulatory approval of our infectious disease panels, difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors' products, market acceptance of QIAGEN's new products and the integration of acquired technologies and businesses. For further information, refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
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Qiagen N.V. Spoorstraat 50 KJ Venlo Netherlands
WKN: 901626; ISIN: NL0000240000; Index: HDAX, MIDCAP, Prime All Share, TECH All Share, TecDAX; Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Niedersächsische Börse zu Hannover, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Stuttgart;
