Molecular diagnostics solutions provider, Qiagen (QGEN) recently received 510(k) clearances from the US Food and Drug Administration (FDA) for two of its products for in vitro diagnostic use (IVD) in the US. Of the two products, Rotor-Gene Q MDx provides a real-time polymerase chain reaction (PCR) testing in molecular IVD applications while the artus Infl A/B RG RT-PCR Kit is a compatible test on Rotor-Gene platform to detect Influenza A/B.
Qiagen is currently witnessing higher demand for its wide-ranging Rotor-Gene Q models, the integral part of lab automation platform QIAsymphony RGQ, which is widely accepted in clinical laboratories worldwide along with other molecular detection platforms. Although clinical laboratories outside the US already had access to the company’s molecular diagnostic tests portfolio for use on these platforms, US customers did not have any such offer. The Influenza A/B assay is the first test kit of Qiagen to receive FDA nod and is expected to open the door forfurther expansion in diagnostic test kits.
As per the recent data published by the US Centers for Disease Control and Prevention, 50,000 influenza tests are performed in the US laboratories annually. Thus, the latest FDA approvals of these IVD products are expected to work in favor of Qiagen and provide it with solid near-term revenues.
Moreover, these products should fit well in the company’s product portfolio as the company itself has been pursuing the development of molecular detection platforms across the world. This is to note that the earlier versions of the artus Infl A/B RG RT-PCR kit were widely used across the world during the 2005/2006 and 2009/2010 influenza epidemics.
Qiagen is facing mounting competition in the molecular diagnostic space especially from players like Quest Diagnostics (DGX), Laboratory Corporation of America Holdings (LH) and Myriad Genetics (MYGN).
However, we remain encouraged by Qiagen’s focus on strategic initiatives to drive growth and profitability in the companion diagnostics market. Its innovative tests in the genomic/esoteric arena with a focus on the high-margin esoteric testing business are expected to accelerate sales growth in the next several quarters. Qiagen’s long-term strategy involves technological advancement and new product introduction that can hugely enhance its competitive advantage.
Currently, Qiagen retains a Zacks #3 Rank (short-term Hold). Over the long term, we are Neutral on the stock, at par with LabCorp and Myriad.
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