Qiagen is aiming for a 50-fold increase in output of viral RNA extraction kits to meet rising demand for tests that detect the SARS-CoV-2 virus.
In first-quarter results posted Wednesday, the company confirmed sales grew 9% on a constant currency basis as soaring demand for coronavirus tests more than offset headwinds created in other parts of the business by lockdowns.
Based on trends over the first month of the second quarter, Qiagen said Tuesday it expects sales during the period to grow by at least 12% year over year, citing demand for coronavirus testing as the key driver. At the same time, it suspended its 2020 forecast, citing the unpredictability of the pandemic.
With Qiagen expecting the growth to continue throughout 2020, it has already stepped up output and is planning to continue increasing production to well above historical levels.
In 2019, Qiagen produced enough RNA nucleic extraction reagents to support around 400,000 tests a month, although it has historically allocated enough capacity to supply 1.5 million tests a month. Whatever the baseline, Qiagen is now well above it. By the end of April, Qiagen was making enough reagents to support more than 7 million coronavirus tests, beating its own target of 6.5 million.
The upward trend is set to continue. Qiagen expects to support more than 10 million tests by the end of June, and pass 20 million toward the tail end of the year. Depending on whether 400,000 or 1.5 million is taken as baseline, the target represents either a 50- or 13-fold increase in production.
Qiagen’s commitment to the increase in output follows a series of statements that have made it clear the crisis is a near-term net positive for company sales, with demand for coronavirus tests negating headwinds in other parts of the business. In April, Qiagen said first quarter sales rose around 9%, a figure confirmed in its final results on Wednesday. Qiagen previously guided investors to expect growth of 3%, at most, in the quarter.
Qiagen is responding to the sudden shift in the growth areas of its business by ramping up output at sites in the U.S. and Europe and tasking its R&D teams with developing tests for use in the crisis. A test panel designed to differentiate infection with SARS-CoV-2 from 21 other respiratory pathogens is now cleared for use on both sides of the Atlantic. Qiagen is now investing to increase production of cartridges to meet anticipated demand. A serology test is also in the works.
The exact level of demand for the cartridges and other products will depend on how the pandemic plays out in the coming months, leading Qiagen to withdraw its guidance for the year.
Thermo Fisher Scientific, which is due to close its $11.5 billion acquisition of Qiagen next year, also pulled its financial guidance in response to the coronavirus. Last month, Thermo Fisher CEO Marc Casper said the two companies have “very complementary” coronavirus capabilities. The deal was disclosed in early March.