VENLO, The Netherlands and NEW HAVEN, Connecticut, September 27
/PRNewswire-FirstCall/ -- QIAGEN N.V. , (Frankfurt, Prime Standard: QIA) today announced that it has completed the acquisition of the key assets of Molecular Staging, Inc. (MSI). MSI, a privately held company, has developed a range of proprietary products and services based on its Multiple Displacement Amplification (MDA) technology. The key application of MDA is whole genome amplification (WGA) which is designed to eliminate limitations created by the scarce quantities of DNA samples available for customers to perform an increasing number of analyses. MSI's products and services are primarily targeted at QIAGEN's current customer base and are a natural complement to QIAGEN's current product range. The technology portfolio acquired from MSI adds a new dimension of customer benefit and is in QIAGEN's core focus on pre-analytical solutions. QIAGEN believes that this transaction further expands its position as the market and technology leader in nucleic acid handling, separation and purification in the industrial and academic research, and molecular diagnostics markets.
Under the terms of the acquisition agreement, QIAGEN has acquired the major assets of MSI (which include over 160 applied or issued patents) for US$28.5 million in cash plus potential earn-outs of up to US$6.75 million. QIAGEN expects to incur one-time charges relating to the acquisition of approximately US$2 million in the third quarter 2004. Based on preliminary analysis, QIAGEN expects this transaction to have a positive and slightly accretive impact on QIAGEN's 2005 net income per share and revenue growth - adding approximately US$6 million in Net Sales and approximately US$1 million in Net Income in 2005. QIAGEN expects products derived from this transaction to generate very rapid growth in Net Sales and Operating Income in the following years.
The challenge of having insufficient quantities of DNA for analysis, frequently known as DNA Constraint, is a significant limitation for a growing number of customers worldwide. The importance of this limitation is increasing due to: 1) the rapidly increasing number of DNA analyses and 2) the use of DNA source material which is limited in quantity.
The problems associated with DNA Constraint have been particularly fueled by the increasing trend towards analyzing greater numbers of clinical patient samples. In many cases the amount of available DNA source material is limited. Patient samples collected in biobanks or in clinical trials are limited in quantity and re-collecting the sample from the same donor at some later time is often not feasible or could result in different DNA content. Collection techniques such as small needle biopsies and less invasive sample collection methods such as buccal swabs, also limit the amount of sample taken originally. In addition, even larger amounts of genomic DNA are being required for the increasing number of analyses that are currently being conducted, such as patient genotyping and to enable the sharing of patient DNA samples between researchers at different locations.
QIAGEN expects that the technology portfolio acquired from MSI will provide a solution to the limitations of scarce DNA samples. Following QIAGEN-based nucleic acid purification, whole genome amplification (WGA) provides precise, complete and unlimited copies of the entire genome and thereby creates a sufficient quantity of DNA from even the smallest amounts of starting material to enable a practically unlimited number of analyses. Performing WGA is therefore often described as "immortalizing" the sample. QIAGEN believes that the opportunities for the WGA technology it acquired from MSI are broad, reaching from general research to sample storage facilities and into diagnostics.
WGA is distinct from PCR since it allows non-specific amplification of the complete genome to create more DNA for analyses, whereas PCR amplifies only specific, mostly very short stretches of DNA matching a predefined target sequence and is designed to detect specific sequences. The two technologies, WGA and PCR, are therefore often synergistic as samples can be pretreated with WGA to create sufficient sample amount for many subsequent analyses using PCR and other downstream applications.
QIAGEN intends to launch a series of kits integrating MSI's WGA technology to address specific customer needs in early 2005. MSI's WGA activities will be integrated into QIAGEN's operations in Germantown, Maryland and Hilden, Germany.
Under the terms of the acquisition, QIAGEN also acquired MSI's technology portfolio related to rolling circle amplification (RCA) which includes the exclusive rights to use this technology for protein applications. QIAGEN expects that products arising from this technology can target applications for both nucleic acids and proteins.
"This accretive acquisition adds a unique and highly synergistic technology position to QIAGEN. We believe that following this transaction, QIAGEN will be the clear technology and market leader for whole genome amplification and is thereby adding a new and valuable dimension of customer benefit for pre-analytical processing between sample collection and analysis. We expect that the technologies acquired will provide solutions for rapidly emerging needs in fast-growing segments of our core markets and integrate well with QIAGEN's unparalleled and broad product portfolio for nucleic acid sample handling, separation and purification. It is a terrific fit for us, as we are addressing the same customers, with comparable product formats and are leveraging the core strengths of our focused sales force,'' said Peer M. Schatz, QIAGEN's Chief Executive Officer. "We are very impressed by this proven technology and how it can eliminate the limitations resulting from sample scarcity. The need for such solutions has rapidly increased in target markets such as functional studies and clinical trials which are showing significant and long-term growth. We are excited about our potential to create value from this acquisition - it adds a technology portfolio to QIAGEN in pre-analytical solutions - an area where we have paralleled innovation and marketing power.
"As a leader in the field of nucleic handling and preparation, QIAGEN is the ideal platform for the further development of our technology portfolio", said Richard Barker, MSI's Chairman. "We have seen great enthusiasm from the market for our WGA products and have confidence that QIAGEN will be able to build upon this and further develop the technology to ensure that it remains the leader in the exciting and dynamic market where DNA is a scarce and valuable asset."
Detailed information on this acquisition will be presented in a Company's conference call today, September 27, 2004 at 9:30am EDT. The corresponding presentation slides will be available 60 minutes ahead of the conference call on the Company's website at http://www.qiagen.com/goto/092704. A webcast of the conference call will be available on the same website at http://www.qiagen.com/goto/092704.
Gargoyle Partners LLP acted as exclusive financial adviser to QIAGEN in this transaction.
Molecular Staging, Inc. was established in 1998. Further information on MSI can be found at http://www.molecularstaging.com/.
QIAGEN N.V., a Netherlands holding company with subsidiaries in Germany, the United States, Japan, the United Kingdom, Switzerland, France, Italy, Australia, Norway, Austria, Canada, and the Netherlands believes it is the world's leading provider of innovative enabling technologies and products for the separation, purification and handling of nucleic acids. QIAGEN has developed a comprehensive portfolio of more than 320 proprietary, consumable products for nucleic acid separation, purification and handling, nucleic acid amplification, as well as automated instrumentation, synthetic nucleic acid products and related services. QIAGEN's products are sold in more than 42 countries throughout the world to academic research markets and to leading pharmaceutical and biotechnology companies. In addition, QIAGEN is positioning its products for sale into developing commercial markets, including DNA sequencing and genomics, nucleic acid-based molecular diagnostics, and genetic vaccination and gene therapy. QIAGEN employs approximately 1,400 people worldwide. Further information on QIAGEN can be found at http://www.qiagen.com/.
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 DNA sequencing, genomics and synthetic nucleic acid-related 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 seasonal fluctuations), 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, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with the U.S. Securities and Exchange Commission (SEC).