Qiagen has braced investors for increased volatility in COVID-19 testing as the new phase of the pandemic progresses.
In the first quarter, Qiagen's coronavirus-related revenues were flat sequentially, helping the company to grow above its outlook. However, the consistency masks changes in where tests are in demand.
Qiagen expects region-to-region variability and volatility to continue but, with non-pandemic sales growing in the first quarter, still contends it is positioned to hit its full-year sales target.
Revenues rose 48% on a constant-currency basis, exceeding the 45% growth targeted by Qiagen and keeping the company on track to increase sales by 18% to 20% over the full year. The sales growth reflected demand for both COVID-19 materials and products unrelated to the pandemic.
Coronavirus-related sales at other diagnostic companies such as Abbott Laboratories and Quidel have fallen short of analyst expectations in recent financial updates. Qiagen is subject to similar forces to those companies but its geographic mix enabled it to stay on track in the first quarter, as CEO Thierry Bernard explained on a Tuesday call with investors.
"It is true that demand has been softening in some geographies, the U.S. [and] Israel, for example. But the demand is still extremely strong in some other geographies ... in some countries in Europe, or obviously the examples of Brazil, Russia or India, showing us that there is still room for significant testing demands. We are entering a phase probably of increased volatility," Bernard said.
COVID-19 revenues came in at $203 million, up slightly on the fourth quarter and significantly on the comparable period of 2020. One year ago, Qiagen grew 9%, easily beating its outlook, as early sales related to coronavirus more than offset the weakening of the broader business because of the disruption caused by the pandemic.
The weakening of Qiagen's core business in the first quarter of 2020 created an easier comparison for the non-COVID-19 product lines in the most recent results. Sales of non-coronavirus products grew 16% year on year but fell 2% compared to the fourth quarter of 2020.
Qiagen cited year-on-year growth in sales of non-COVID-19 consumables kits for DNA extraction as a driver of the 42% jump in revenues from sample technologies, the largest part of its business. Sales of diagnostic solutions were up 52% year on year. However, sales of diagnostic solutions and sample technologies were down versus the fourth quarter.
The dip in diagnostic sales was underpinned by QuantiFERON-TB sales, which were down 4% compared to the fourth quarter. NeuMoDx sales also fell just short of the $35 million recorded in the fourth quarter, but QIAstat-Dx revenues grew sequentially and year on year. Qiagen attributed the year-on-year growth in the automated PCR testing systems QIAstat-Dx and NeuMoDx sales to COVID-19 and other clinical testing applications.
Analysts at Jefferies framed the growth in QIAstat-Dx sales in the context of the March slowdown in U.S. demand for multiplex respiratory panels reported by competitors. However, the fact that QIAstat-Dx is at an early stage in its launch complicates the comparison to more established competitors.
Nonetheless, Jefferies analysts said the early launch dynamics of QIAstat-Dx "seem encouraging" and could be
"a key mid-term growth driver" while "sustained benefits from the pandemic include a larger and more rapid
ramp-up of installed base for both QIAstat-Dx and NeuMoDx for greater future pull-through of consumables."