sample & assay technologies 18th annual credit suisse …€¦ · credit suisse healthcare...

Sample & Assay Technologies- 1 -

QIAGENSample & Assay Technologies

18th Annual

Credit Suisse Healthcare Conference

Phoenix, November 11, 2009

Roland Sackers, Chief Financial Officer


Safe Harbor Statement: Certain of the statements contained in this presentation 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 and markets and 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), variability of operating results, the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets, as well as the nucleic acid-based molecular diagnostics, applied testing markets and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including fluctuations from certain events including funding, budgets, and others), 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, the management of intellectual property, and the integration of acquisitions of technologies and businesses. In addition certain statements contained in this news release are based on company assumptions, including, but not limited, to revenue allocations based on business segments. For further information, refer to the discussion in reports that QIAGEN has filed with or furnished to the U.S. Securities and Exchange Commission (SEC).

Regulation G: The following slides contain certain summary information about QIAGEN N.V.’s sales, gross profit, operating income, net income, and earnings per share over a specific period and the comparable period, which information is presented on a “non-GAAP financial measures” basis rather than in accordance with U.S. generally accepted accounting principles (GAAP). Please review QIAGEN’s press releases for information on the company’s operating income, net income, and earnings per share for these periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company’s reports on Form 20-F or Form 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission.

Forward Looking Statements


Sample & Assay Technologies

Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic

reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic

reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic

reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, DNA,

Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic


reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic


reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils,

Neutrophils, Talin, ...

Complexsample

DNAPureAnalyte

InformationAssayTechnologies

Target Detected

Yes

No

SampleTechnologies

Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic

reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic


reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, Hemaglobins, Heptaglobins,

Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, DNA, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic


reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic


reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils,

Neutrophils, Talin, ...

Intro


Typical Products: From Sample to Results Sample & Assay Technologies on Automated Platforms

Fully Automated Platforms

Assay TechnologiesSample Technologies

Intro


Revenues:

2008:

US$893 M

05–08 CAGR: 31%Net income1:

2008:

US$163 M

05–08 CAGR 33%EPS1:

2008:

US$0.80 05–08 CAGR: 20%

Product Range:>500 consumable products

□

Sample Technologies: to collect, separate, purify, isolate, stabilize and store samples

□

Assay Technologies: to make such isolated target information (DNA, RNA, proteins, etc.) visible

Instrumentation for above consumables

Customers: >400,000Academic researchPharma/BiotechApplied testing (veterinary, forensics etc.)Molecular diagnostics

IP (06/09): >2,100 patents

(757

issued, 799 pending, 550+ licensed)

Employees: ~3,340

employees based in > 30 subsidiaries

QIAGEN at a Glance

(1)

Excluding acquisition, integration and relocation related charges as well as amortization of

acquired IP and equity-based compensation (SFAS 123R)For further information on the adjusted (adj.) figures, please refer to the reconciliation tables in

the appendix of this presentation.

Intro


Gaithersburg

Shanghai/Shenzhen

Düsseldorf

Switzerland = Automation Center of ExcellenceHamburg = Assay Center of ExcellenceValencia(1) = Customer satisfaction centerSingapore = Customer satisfaction centerShenzhen

= Certified Production(2)

23 Subs = Direct sales and marketing

(1) California

(2) Certified by the Chinese regulatory authorities SDA for production of diagnostic products

Global Set-up Three Headquarters in Major Markets Intro


Sample and Assay Technologies

Growth Drivers

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

220.000

240.000

260.000

280.000

1993 1994 1995 1996 1997 1998 1999 2000 2001

Financials

Intro

Technology Leadership Sales Strength

MARKETS

Academia

PharmaBiomedical

MDx

Inside SalesE-commerce

Appl. Testing


Sales Strength

MARKETS

Academia

PharmaBiomedical

MDx


Appl. Testing

Growth Drivers

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

220.000

240.000

260.000

280.000

1993 1994 1995 1996 1997 1998 1999 2000 2001

Financials

Sample and Assay TechnologiesTechnology Leadership

Technology Leadership


Any Analyte

QIAGEN Sample Technologies Enabling Access to the Content of Any Biological Sample

AnyApplicationAny

BiologicalSample



Technology and Innovation Leader

R&D at QIAGEN:

Investment: Approx. 12% of sales

People: >640 employees in R&D

Multiple locations:GermanyU.S.SwitzerlandSingaporeChina

Multiple disciplines:ChemistryBiologyPhysicsEngineering and others

Fast, proven innovation cycles:

Stable 4-5% revenue growth fromnew products launched in last 12 months.



Growth Drivers

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

220.000

240.000

260.000

280.000

1993 1994 1995 1996 1997 1998 1999 2000 2001

Financials


Significant Sales and Marketing PowerSales Strength

Sales Strength

MARKETS

Academia

PharmaBiomedical

MDx


Appl. Testing


QIAGEN’s Global Footprint

Americas Approx. 51% of Sales

Europe Approx. 35% of Sales

Asia Approx. 11% of Sales

MARKETS

MDx/

Companion DxApplied TestingPharmaBiomedicalAcademia

Others

Sales Channels

>990in

>450in

SPECIALISTS

Rest of World Approx. 3% of Sales

Sales Strength


Revenue Distribution Third Quarter 2009

RoW

Americas12% growth

15% growth CER

Europe16% growth

24% growth CER

By Geographic Regions

86%

14%

51% 35%

11%

CER = Constant Exchange Rates

Sample and Assay Technologies12% growth16% growth CER

Instruments18% growth23% growth CER

Asia41% growth

37% growth CER

By Product Groups

Sales Strength


0%

2%

4%

6%

8%

10%

12%

14%

16%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

2004 2005 2006 2007 2008 2009

QIAGENIndustry average

QIAGEN Organic Growth Sustainable and Industry-Leading

Industry-Leading Organic Growth

(1)

Industry data include: Illumina, Luminex, Cepheid, Techne, GenProbe, Sigma Aldrich, Bio Rad, Mettler, Meridian, Beckman, Waters,

Becton Dickinson, Roche, Thermo, Millipore, Bruker, Celera, Affymetrix, Immucor, QIAGEN, Tecan, Digene

(pre-acquisition),

Innogenetics, Life Technologies (Invitrogen/Applied Biosystems)

(1)

Source: Company data, Analyst reports

Sales Strength


Sales Strength

MARKETS

Academia

PharmaBiomedical

MDx


Appl. Testing

Financials


QIAGEN is Addressing Key Growth MarketsGrowth Drivers

Growth Drivers

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

220.000

240.000

260.000

280.000

1993 1994 1995 1996 1997 1998 1999 2000 2001


Leading Position - Multiple Growth Drivers

Product and Technology Continuum

SAMPLETechnologies

ASSAYTechnologies

PublicPrivate

Life ScienceResearch

PharmaceuticalIndustry

AppliedTesting

MolecularDiagnostics

DiscoveryDevelopment

VeterinaryForensicBio defenseFood

PreventionProfilingPersonalizedHealthcare

Growth Drivers


QIAGEN Customer Segments

Molecular Diagnostics (approx. 50% of sales)Overall: Solid markets - exciting trendsPrevention: QIAensemble – clinical trials initiating in coming weeksProfiling: Influenza screeningPersonalized Healthcare: significantly expanded portfolio

Applied Testing (approx. 6% of sales)Expanded partnership with VLA on veterinary testingFocus on forensics, veterinary and food testing

Pharma (approx. 21% of sales)Discovery: some improvementDevelopment: expanding position (Funnel: SABiosciences->DxS)

Life Science Research (approx. 23% of sales)Stimulus packages slowly coming throughPeople still cautious in terms of spendingPositive outlook for 2010

Growth Drivers


Market Leadership in Molecular Diagnostics

Sample Technologies: proven standard

Assay Technologies: unparalleled breadth (>120 assays)PCR, real-time PCR assays, QIAplex PCRIsothermal amplified and non amplified assay techLeading in key assay areas (Companion Dx, Pathogen, HPV)Broad platform base

Regulated portfolio – global and growing15 FDA (PMA approved or 510k cleared) products>100 CE-marked products10 SFDA approved assays

InfrastructureThree Centers of Excellence worldwide~ US$100 M spent in R&D in 2008IP estate: >2,100 patents & licenses> 450 individuals in MDx Sales & Marketing

Growth Drivers


QIAGEN’s 3 “P” Framework in Lab-based MDx

PREVENTION

Asymptomatic patientsGoal: Early detection

PROFILING

Symptomatic patientsGoal: Confirm

PERSONALIZEDHEALTHCAREPre-diagnosed patientsGoal: Guide Therapy

Assay Technologies

Narrow portfolioHigh volume/<$20/assay

Broad portfolioHigh value, low volume

Growing portfolioHigh value, low volume

Examples•

HPV•

Chlamydia/NG•

5 additional assays in pipeline

•

More to come

Examples:•

CMV•

EBV•

HBV•

HIV•

HCV•

Influenza

Examples•

KRAS•

EGFR•

B-RAF•

PI3K•

Pathogen Genotyping

Instruments

High throughputContinuous load

Random accessContinuous load

Random accessContinuous load

QIAensemble QIAsymphony QIAsymphony

Assay Design Fast, typically isothermal amplification or no amp

PCR

Pyrosequencing

PCR

Pyrosequencing

Growth Drivers


Molecular Diagnostics - Prevention Significant Untapped Potential for HPV Testing

Adoption of existing guidelines

Patient, physician communications

Key focus: market penetration, conversion to Pap+HPV

Adoption into medical guidelines (>30 countries!)

Advocacy, patient, physician communications

Laboratory marketing

Adoption into medical guidelines

Significant cost/benefit advantages

Emerging national (primary) screening programs

Substantial Market –

Diverse Marketing Profiles

U.S. Current tests: ~ 11.4MPenetration:

~ 30%

EuropeCurrent tests: ~ 2.3MPenetration:

~ 7%

Asia/Latin America:Current tests: 0.9MPenetration:

~ 3%

Asia/Latin

America~ US$280M

U.S.~ US$490M

Europe~ US$350M

Total market: >US$1.1 B

Note: Represents market from existing Pap Smear Tests onlySource: Company estimates (based on 2008 numbers)

Growth Drivers


Current solutions

Fully automated assay

Today’s gold standard in HPV screening

NextGen Evolution: Next-generation HC2 (starting 2009)

Fully automated sample preparation fromliquid cytology vials on QIAsymphonySP

Fully automated assay

Genotyping 16/18/45 reagents

NextGen Revolution QIAensemble (2010, 2012 in US)

Broad menu high throughput screening system

Fully automated sample and assay technologies

HPV testing on novel chemistry, leveraging HC2

Unprecedented throughput and utility

Molecular Diagnostics - Prevention Workflow Performance: The digene HPV Test

Semi-automated use Assay automation

Growth Drivers


Molecular Diagnostics - Personalized Healthcare An Emerging, Transformational Paradigm in Healthcare

Definitions:

Personalized healthcare (PHC): the combined use of companion diagnostics and therapeutics.

Companion diagnostics: tests that are typically developed in partnerships with pharmaceutical companies.

Rapidly emerging trend:

Recent regulatory changes: changes how PHC is perceived

Personalized Healthcare

Previously: reduced market potential

Now: improved profiles of drugs

Growth Drivers


Acquisition of DxS Ltd. A Leader in Companion Diagnostics

Combined Company offers:

Market and technology leadership in companion diagnosticsLeading portfolio of CDx testsMultiple technology platformsStrong pipeline

Excellent access to pharmaceutical industryCombined: more than 15 partnerships with pharmaMore than 10 partnerships in oncologyIndependence

Specialized sales force in molecular diagnostics/companion DxMore than 450 people in sales and marketing in MDx

Excellent basis for future expansion and growthLeading technologies and R&DService infrastructure for pharma development

World-class capabilities and organization to ensure success

Growth Drivers


Drug Vectibix Erbitux Tovok

Marker KRAS KRAS EGFR

Indication Colon cancer Colon cancer Lung Cancer

Cases WW 1 Million 1 Million 1.5 Million

Drug status Approved Approved Phase III

Assay status EU Approved N/A N/A

Assay status NA Review Review N/A

Assay status RoW Approved N/A N/A

Examples for Partnerships in CDx Assays are Leveraged Across Many Therapeutics

Deep Pipeline in Partnership with Key Players in Pharma

Source: QIAGEN

ManyMore

...

...

...

Growth Drivers


Pathway-

/disease-based content (primers, probes)

Sample & Assay Technologies(PCR)

Readout on QIAGEN instruments

Bioinformatics and assay selection tools

Company2010e revenues approx. US$ 24 Mio., above average growth80% of sales panels of real time PCR assays: gene expression, genotyping, epigenetics, micro RNA etc.104 employees, 42% Ph.D.Customers: biomedical, pharma, academiaExpertise: building panels of assays around diseases or pathways. This allows customers to “blast” pre-designed assay panels against their samples.Located in Frederick, MD – next to QIAGEN Headquarters

Rationale:Adds to QIAGEN the solutions to use QIAGEN reagents and instruments in a pathway/disease-focused way. Significantly expands QIAGEN’s GeneGlobe content offeringIs to discovery and validation what DxS is to pharmadevelopment and MDx: builds a content funnel

Financials:2010: neutral to adjusted EPS2011: accretive to adjusted EPSContributes to sales growth and to earnings growth

SABiosciences A Leading Content-Company Growth Drivers

http://www.sabiosciences.com/home.php

http://www.sabiosciences.com/home.php


Sales Strength

MARKETS

Academia

PharmaBiomedical

MDx


Appl. Testing

Growth Drivers

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

220.000

240.000

260.000

280.000

1993 1994 1995 1996 1997 1998 1999 2000 2001


QIAGEN Strong Financial Base – Exciting Model Financials

Financials


QIAGEN Group Revenue and EPS Growth 2005 - 2008

All figures excluding business integration and relocation related charges as well as amortization of acquired IP

and equity-based compensation (SFAS 123R). EPS 2007 includes a non-cash tax benefit of US$ 0.02 and

EPS 2008 includes a non-cash tax charge of US$ 0.01 from revaluation of acquired tax positions.

CAGR2005-2008 = ~31%

CAGR2005-2008 = ~20%

Revenues

EPS adjusted

Financials

398.4466.0

649.8

893.0

100

200

300

400

500

600

700

800

900

1000

2005 2006 2007 2008

in U

S$in

US$

M

0.46

0.560.63

0.80

0.00

0.10

0.200.30

0.40

0.50

0.60

0.700.80

0.90

1.00

2005 2006 2007 2008


QIAGEN Group Operating Cash Flow and Free Cash Flow 2005 - 2008 Financials

91.2101.5

84.8

173.0

020406080

100120140160180200

2005 2006 2007 2008

77.5 72.5

50.3

133.6

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008

Operating Cash flow

Free Cash flow

Free cash flow computed using net cash from operating activitiesless capital expenditures.

in U

S$M

in U

S$


In US$M unless indicated

GuidanceAug 11, 2009 Reported

Net sales, actual rates 260

Net sales, guidance rates 235 -

245 246 Exceeded

Operating margin, adj. 29% -

30% 31% Exceeded

EPS, adj. (US$) 0.26

EPS, adj. (US$), guidance rates 0.23 -

0.24 0.25 Exceeded

Guidance rates based on January 31, 2009 foreign currencies exchange rates.

EPS, adj. excluding a gain of approximately US$0.02 related to the transfer of Olerup

SSP business and other acquisition related income.

For further information on the adjusted (adj.) figures, please refer to the reconciliation tablesin QIAGEN’s

Q3 2009 earnings release.

Key Performance Metrics Third Quarter 2009

Exceeded Expectations

Financials


In US$M Q3 2009 Q3 2008

Net income 37.7 20.8

Depreciation & amortization 30.4 28.1

Income taxes (deferred and actual) 0.4 (10.6)

Increase in inventories (7.3) (12.8)

Others, net 15.7 6.0

Operating cash flow 76.9 31.5

Capital expenditures (14.0) (11.3)

Free cash flow1 62.9 20.2

1

Free cash flow computed using net cash from operating activities less capital expenditures

Cash Flow and Balance Sheet Key Figures Third Quarter 2009

In US$M unless indicated As of 9/30/2009

Cash and cash equivalents 861.3

Net debt 90.9

Equity ratio 59%

Net debt / EBITDA, adj. ratio 0.3

Financials


Key Investment Considerations Strong Growth at Low-Risk

Strong Strategic PositionAddressing high growth marketsFocused, complete and technology-leading portfolioCritical mass, well functioning global organizationBroad footprint and activities in Asia

Asia Headquarters in Shanghai and SingaporeStrong link into Singapore → Dx AssaysInfluenza surveillance

Innovation is keyProven innovation leadership in industry>80 product launches in 20085% of revenue growth from new introduced products

Strong Financial PerformanceRevenue growth in 2008: 37%Organic adj. growth in 2008: 13%Operating cash flow up 105% to US$173 M in 2008Defensive nature of investments

Summary


Thank you!

sample & assay technologies 18th annual credit suisse …€¦ · credit suisse healthcare...

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