(QGEN) Qiagen Hopeful of Ipsogen Takeover

Recently, Qiagen (QGEN) entered into an agreement to acquire 47% stake in France based Ipsogen at €12.90 per share. Thereafter, Qiagen wishes to make a public offer to fully acquire the company. With Ipsogen, Qiagen would have access to a wide portfolio of biomarkers targeted to patients suffering from with blood cancer.

Ipsogen recorded 24% sales growth in 2010 to €8.4 million (approximately $11 million). The total value on fully acquiring Ipsogen would stand at €70 million (fully diluted) or $101 million (at exchange rate of €1.00 = $1.44). The whole transaction (including the public offer) is expected to be completed by the third quarter of 2011.

Qiagen would fund this acquisition using its existing cash balance. The transaction, on an adjusted basis, would be slightly dilutive to adjusted EPS in 2012, but accretive to adjusted EPS in 2013.

Based on a solid cash position ($776 million at the end of first quarter) the company is adopting an aggressive acquisition strategy in order to widen its scope and have a better grip over the competitive landscape with major players like Life Technologies (LIFE) and Sigma-Aldrich (SIAL).

Earlier, in April, Qiagen had decided to acquire Australia based Cellestis Limited for $3.69 (A$3.55) per share in cash or $355 million (A$341 million). With this acquisition, Quiagen was expected to have access to Cellestis’ proprietary QuantiFERON technology, an innovative disease diagnostic tool.

This pre-molecular testing technology QuantiFERON has been commercialized by Cellestis with already marketed test and its flagship product QuantiFERON-TB Gold In-Tube (QFT) for detection of latent tuberculosis (TB).

Qiagen primarily derives revenues from Molecular Diagnostics, Applied Testing, Pharma and Academia, which represented 44%, 6%, 21% and 29% of total sales during the first quarter of fiscal 2011. Molecular diagnostics recorded a 2% decline at constant exchange rates (CER) as

Profiling was negatively affected by sales disruptions in Japan and Egypt. Moreover, Prevention was affected by soft HPV tests in the US. However, this dip in sales was partially offset by Qiagen’s gain in personalized healthcare, banking on expansion of companion diagnostic sales in Europe and co-development projects with pharmaceutical companies.

The molecular diagnostics market in the US has a fair chance of improving in the coming quarters with the uptrend in patient visits to physician offices. Moreover, the proposed acquisition of Ipsogen should strengthen Qiagen’s leadership in molecular diagnostics, significantly expanding its profiling and personalized healthcare portfolios.

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