QIAGEN Acquires Biosystems Business from Biotage
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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,
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