SIAL (MM)

Qiagen (QGEN) recently increased its offering to the shareholders of Cellestis Limited (CST) in a bid to acquire this Australia-based biotechnology company. As per the updated terms of the deal, Qiagen increased the offer price by 7% from the original offer price of $3.69 (A$3.55), announced on April 4, 2011, to $4.06 (A$3.80) per share.

The revised offer price represents a 33.1% premium to the one-month volume-weighted average price (VWAP) of the last trading day’s (April 1, 2011) share price of Cellestis prior to the announcement of the agreement and 40.8% to the three-month VWAP ending on April 1, 2011. With this acquisition, Qiagen is expected to gain access to Cellestis’ proprietary QuantiFERON technology, an innovative disease diagnostic tool.

This pre-molecular testing technology QuantiFERON has been commercialized by Cellestis with already marketed test and its flagship product QuantiFERON-TB Gold In-Tube (QFT) for detection of latent tuberculosis (TB).

Moreover, Qiagen is in the early stages of commercializing QuantiFERON-CMV for monitoring the disease risk of life-threatening CMV virus. This patent-protected platform technology enables quick detection of the diseases compared to other traditional DNA-based molecular tests.

With this latest move, Qiagen is tending to complement and enrich its molecular diagnostic product portfolio, thereby accelerating the growth of molecular diagnostic testing. QuantiFERON is expected to be beneficial for Qiagen’s current assay portfolio and pipeline while relocating and combining with products like QIAsymphony, QIAensemble and other relevant needs. 

Strategically, Qiagen is focusing on expanding its molecular diagnostics product portfolio (contributing 44% of total sales in first quarter of 2011), which recorded a 2% year-over-year decline due to sales disruptions in Japan and Egypt and soft sales of HPV tests in the US. However, with improving trends in the US, sales are expected to increase in the coming quarters based on higher patient visits to physician offices. Moreover, Personalized Healthcare is expanding attributable to higher companion diagnostic sales in Europe and co-development projects with pharmaceutical companies.

Moreover, Qiagen is adopting aggressive acquisition strategy in order to widen its scope and strengthen its position in the competitive landscape with major players like Life Technologies (LIFE) and Sigma-Aldrich (SIAL).

 
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