Thermo Fisher Expands Diagnostics Capabilities with $11.5 Billion Takeover of Qiagen

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Waltham, Massachusetts-based Thermo Fisher Scientific is acquiring QIAGEN N.V., based in Venlo, The Netherlands. Thermo Fisher is offering 39 euros per share in cash for a transaction total of about $11.5 billion. It is also taking on $1.4 billion of net debt.

Thermo Fisher has many facets but is generally known for manufacturing and selling laboratory equipment. Qiagen manufactures diagnostic tests for a variety of diseases including cancer and, currently, the coronavirus that causes COVID-19.

In March 2019, Thermo Fisher acquired Brammer Bio, a gene and cell therapy manufacturer, for $1.7 billion in cash. Brammer Bio is a contract development and manufacturing organization (CDMO) focused on manufacturing viral vectors for gene and cell therapies. In July of last year, Amicus Therapeutics inked a strategic manufacturing deal with Brammer.

Today’s announcement makes it one of Thermo Fisher’s largest deals after the 2014 acquisition of Life Technologies Corp. for $13.6 billion. That deal allowed Thermo Fisher to pick up Life Tech’s DNA-testing capabilities.

Qiagen’s new assay to detect the coronavirus in bodily fluids is being evaluated at four hospitals in China and one in France. Bloomberg reports that it provides results in about one hour.

Qiagen’s Peer Schatz, who had been the company’s chief executive officer for 15 years, stepped down in October 2019. The company explored possible sale options after receiving approaches from buyers, then halted them in December, stating they weren’t compelling enough. However, Qiagen indicates its board backs the Thermo Fisher deal.

“We are excited to bring together our complementary offerings to advance our customers’ important work, from discovery to diagnostics,” said Marc N. Casper, Thermo Fisher’s chairman, president and chief executive officer. “This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs. For shareholders, we expect the transaction to be immediately accretive and to generate significant cost and revenue synergies.”

Qiagen employs about 5,100 staffers at 35 sites in more than 25 countries. In 2019, it brought in $1.53 billion in revenue. Thermo Fisher will benefit from the company’s molecular diagnostics technology, including infectious disease testing, as well as its innovative sample preparation, assay and bioinformatics technologies. Thermo Fisher  has a market capitalization of more than $122 billion.

“Our vision at Qiagen has always been to make improvements in life possible with our differentiated Sample to Insight molecular testing solutions,” said Thierry Bernard, interim chief executive officer of Qiagen and senior vice president, head of the molecular diagnostics business area.

Bernard added, “This strategic step with Thermo Fisher will enable us to enter a promising new era and will give our employees the opportunity to have an even greater impact. The combination is designed to deliver significant cash value to our shareholders, while enabling us to accelerate the expansion of our solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of life and improved health outcomes.”

Although the tie-in with the coronavirus assay is timely, Thermo Fisher reportedly was interested in Qiagen before the coronavirus outbreak began in January. In addition to the four Chinese hospitals and one in France testing the kits, the company has applied for emergency authorization to market them in the U.S., Korea and China. They are expanded versions of the company’s QIAstat-Dx Respiratory Panel, which was used to test for other respiratory diseases.

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