- Qiagen on Monday lowered its full-year 2021 outlook due to declining COVID-19 test demand. CEO Thierry Bernard told investors Tuesday the updated forecast was a result of a faster-than-expected drop in testing sales.
- The Dutch holding company is the latest diagnostics manufacturer to blame slumping coronavirus test sales on the uptake of vaccines globally. "The rollout of vaccination campaigns around the world have been much more successful than anticipated and this has led to reduced demand for testing," Bernard said. Qiagen joins Abbott Laboratories and Quidel in cutting 2021 outlook due to a drop in COVID-19 test demand.
- Like other testing companies, Qiagen is assuming demand will continue to drop throughout the second half of 2021. As a result, the company updated its full-year 2021 outlook for net sales to grow at least 12% constant exchange rate (CER), compared to prior guidance of about 18% to 20% CER. Jefferies said Qiagen's downgraded 2021 targets are disappointing, particularly given management's reiteration last month of its forecast, calling it "more COVID-dependent than thought" despite a similar decline in COVID-19 test sales flagged by peers months ago.
The pace of the global vaccination campaigns has caught Qiagen and other manufacturers by surprise, forcing the Dutch holding company as well as Abbott and Quidel to lower their full-year 2021 outlooks.
Qiagen also on Monday provided preliminary second-quarter results. While the company exceeded the outlook for overall net sales and adjusted earnings per share, COVID-19 sales fell 17% at CER in the quarter from a year ago, with lower sales levels seen across all regions and product categories due to the rollout of vaccines.
"This marks a break in the growth trends in the most recent quarters," Bernard said on the investor call. While the inevitable drop in demand was expected to "come at some point," the CEO acknowledged that the slowdown came faster than expected.
As a result, Bernard told investors that Qiagen's updated full-year 2021 outlook is taking "an increasingly more cautious view" on demand trends for COVID-19 testing in the second half of the year.
CFO Roland Sackers said Qiagen is now expecting its COVID-19 product group sales to be down about $200 million.
"This leads to the new outlook for at least 12% CER growth for 2021" in which "non-COVID performance is helping us to offset" the decline in coronavirus testing, Sackers said.
Other diagnostics makers have also taken a significant hit from the decline in test demand and adjusted their respective outlooks accordingly.
Quidel in March was the first company to lower its 2021 revenue guidance from $2.9 billion to roughly $2.5 billion, adjusting for a steep drop in coronavirus test demand in the first quarter. At the time, CEO Doug Bryant reported demand had plunged between 30% and 40% in February and March compared to the fourth quarter, with COVID-19 testing of symptomatic individuals falling sharply.
Abbott followed suit in June cutting its full-year outlook blaming global vaccination efforts for a sharp decline in demand for its coronavirus-related diagnostics, particularly for rapid tests. Currently, Abbott forecasts about $4 billion to $4.5 billion in COVID-19 testing sales in 2021. The company previously forecasted about $6.5 billion to $7 billion in coronavirus test sales.
As a result, Abbott has eliminated manufacturing positions tied to its COVID-19 diagnostics business. Last month, Abbott closed its Gurnee, Illinois facility, axing about 2,000 temporary jobs. Last week, the company also announced it is laying off a total of about 400 workers at two manufacturing sites in Maine.
Abbott will announce its second-quarter 2021 financial results on July 22. Quidel will report its results on August 5.