Qiagen intends to surpass the industry's growth rate.
In the midst of the COVID-19 crisis, Qiagen is thriving and moving forward. This diagnostics company is repositioning itself, with potential acquisitions playing a significant role in its future growth. The company predicts a significant sales increase by 2028, anticipating a constant exchange rate average annual growth rate of approximately 7%. The operational profit margin is expected to reach at least 31%, rising from 26.9% in 2023.
Qiagen hopes to achieve this growth largely by focusing on its primary growth drivers, such as the Quantiferon tuberculosis test, the Qiastat-Dx diagnostic system, and probetechnologies. These areas are expected to generate a combined revenue of $2 billion by 2028. The NeuMoDx PCR test system, whose sales Qiagen recently halted, will no longer be part of the growth strategy. While NeuMoDx was vital for many laboratories during the pandemic, it is now putting pressure on profit margins.
With the discontinuation of NeuMoDx, Qiagen has raised its forecast for the cleaned-up earnings per share to at least $2.14 for this year (previously $2.09), and expects revenue to increase by around 1.5% to at least $2 billion. However, there will be restructuring expenses of $400 million.
Qiagen is exploring the exit from other low-return smaller products. An update could be provided this year. simultaneous, the company is also pursuing additional, complementary acquisitions.
The company, which specializes in the detection of diseases and laboratory equipment, was a winner during the COVID-19 pandemic. However, the demand for COVID-19 tests has decreased significantly, which was reflected in a substantial drop in sales and earnings in the past year. Qiagen aims to grow its business by offering PCR gene tests for laboratories and diagnostic tests for cancer and infectious diseases like meningitis, pneumonia, and gastrointestinal infections. Analytical software and the tuberculosis test are also expected to be key aspects.
Shares may be bought back by the company under a synthetic buyback program, which combines direct capital repayment and asset consolidation. From 2024 to 2028, Qiagen plans to return at least $1 billion to its shareholders. In January, Qiagen announced a buyback of over $300 million, and shareholders are expected to approve another $300 million at the annual meeting on Friday.
