Sample and Assay Technologies
QIAGEN – Sample and Assay Technologies
Cheuvreux 7th German Corporate Conference
Frankfurt, January 21, 2008
Dr. Joachim Schorr Senior Vice President Global Research & Development
-1- Sample & Assay Technologies Forward Looking Statements
Safe Harbor Statement: Certain of the statements contained in this presentation may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products and markets and operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets, as well as the nucleic acid-based molecular diagnostics, applied testing markets and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including fluctuations for certain events including funding, budgets, and others), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors, the management of intellectual property, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with or furnished to the U.S. Securities and Exchange Commission (SEC). Regulation G: The following slides contain certain summary information about QIAGEN N.V.’s sales, gross profit, operating income, net income, and earnings per share for the third quarter 2007, and the comparable period of 2006, which information is presented on a “non-GAAP financial measures” basis rather than in accordance with U.S. generally accepted accounting principles (GAAP). Please review QIAGEN’s press release dated November 5, 2007, for information on the company’s operating income, net income, and earnings per share for these periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company’s reports on Form 20-F or Form 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission.
-2- Sample & Assay Technologies QIAGEN at a Glance
Intro
Revenues: 2006: $ 466 million 03–06 CAGR: 15% Net income: 2006: $ 85 million 03–06 CAGR 22%1 EPS: 2006: $ 0.56 03–06 CAGR: 21%1 Product Range: >500 consumable products □ Sample technologies: to collect, separate, purify, isolate, stabilize and store samples □ Assay technologies: to make such isolated target information (DNA, RNA, proteins, etc.) visible Instrumentation for above consumables
Customers (>400,000) Academic research Pharma/Biotech Applied Testing (veterinary, forensics, biodefense etc.) Molecular Diagnostics
IP (08/07): >1’500 patents (550+ issued, 480+ pending, 500+ licensed) Employees: >2‘600 employees based > 30 subsidiaries
1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R)
-3- Sample & Assay Technologies Sample & Assay Technologies
Intro
Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Complex Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, DNA, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, sample Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Talin, ...
Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, DNA, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Sample Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, DNA, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma Technologies membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin, Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Talin, ...
Pure DNA Analyte
Target Dectected Assay Yes 9 Information Technologies No
-4- Sample & Assay Technologies Sample and Assay Technologies
Intro
Technology Leadership Sales Strength
MDx
Appl. Testing M Pharma A R Biomedical K E Research T S Inside Sales E-commerce
Growth Drivers Financials
280.000
260.000
240.000
220.000
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
-5- Sample & Assay Technologies Sample and Assay Technologies
Technology Leadership
Technology Leadership Sales Strength
MDx
Appl. Testing M Pharma A R Biomedical K E Research T S Inside Sales E-commerce
Growth Drivers Financials
280.000
260.000
240.000
220.000
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
-6- Sample & Assay Technologies QIAGEN Sample Technologies
Enabling Access to the Content of Any Biological Sample Technology Leadership
Any Any Application Biological Sample
Any Analyte
-7- Sample & Assay Technologies QIAGEN Assay Technologies
Technology Leadership Assay Technologies Technologies: □ All forms of DNA, RNA, methylation, proteins □ Amplification of target or of signal (including: PCR, real-time PCR, multiplexed PCR, Rolling Circle Amplification, HybridCapture) □ Whole Genome/Transcriptome amplification □ RNAi assays Formats □ “Open” kits (generic) □ “Closed” kits (target-specific), e.g. molecular diagnostics Automation Hardware design Software development Electronic engineering
-8- Sample & Assay Technologies QIAGEN Technology and Innovation Leader
Technology Leadership R&D at QIAGEN: Approx. 10% of sales >460 employees in R&D Germany, U.S., Switzerland and China Chemistry, biology, physics, engineering and others Fast, proven innovation cycles: 4-5%-points of sales growth comes from new products launched in last 12 months
-9- Sample & Assay Technologies QIAGEN has Significant
Marketing and Sales Power Sales Strength
Technology Leadership Sales Strength
MDx
Appl. Testing M Pharma A R Biomedical K E Academia T S Inside Sales E-commerce
Growth Drivers Financials
280.000
260.000
240.000
220.000
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
-10- Sample & Assay Technologies Strong Sales and Marketing Force
Sales Strength
Europe Approx 41% of Sales Sales and Marketing Force: 459
Asia America Approx 11% of Sales Approx 52% of Sales: Sales and Marketing Sales and Marketing Force: 227 Force: 440
S Channels P E MDx M C Appl. Testing A I R Pharma A K L Biomedical E I Research T S S Inside Sales T S E-commerce
> 1,100 Sales and Marketing Professionals
-11- Sample & Assay Technologies Revenue Distribution
Third Quarter 2007 Sales Strength
By Product Groups By Geographic Regions
Consumables 45% Growth CER Asia RoW sample technologies 29% Growth CER 2% of sales assay technologies 9% 89%
37% 52%
9%
Others Instruments Europe North America 39% Growth CER 23% Growth CER 70% Growth CER
CER = Constant Exchange Rates
-12- Sample & Assay Technologies QIAGEN is Addressing Key Growth Markets
Growth Drivers
Technology Leadership Sales Strength
MDx
Appl. Testing M Pharma A R Biomedical K E Research T S Inside Sales E-commerce
Growth Drivers Financials
280.000
260.000
240.000
220.000
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
-13- Sample & Assay Technologies Growing By Leveraging Technologies
Growth Drivers
Market Size Market QIAGEN Revs* Growth All figures are estimates (US$ M) Growth (% of Sales) Drivers
Molecular Replacing traditional 2,800 15-20% 48% Sample &Assay Technologies Diagnostics New tests
Applied 500 20-25% 8% Molecular biology Testing “going everywhere”
Personalized medicine Pharma 1,000+ 6-10% 17% Clin. trials monitoring Translational research
Life Science Replacing traditional 1,000 3-6% 27% Biomedical research Research Translational research
* Consolidated annualized revenues
-14- Sample & Assay Technologies Disseminating Technologies Into Four Markets
Growth Drivers
Molecular Applied Life Science Pharma Diagnostics Testing Research
SAMPLE ASSAY Technologies Technologies
Product and Technology Continuum
-15- Sample & Assay Technologies Leading in Molecular Diagnostics
Growth Drivers
Sales in MDx (run rate Q2 2007): approx. $380 million #1 (excluding blood banking and viral load monitoring)
Sample technologies: proven standard
Assay technologies: unparalleled breadth (>120 assays) PCR and real-time PCR assays Multiplexing leader: QIAplex Molecular Diagnostics Leading in key assay areas (HPV) Broad platform base
Regulated portfolio – global and growing 5 FDA (PMA approved or 510k cleared) products 38 CE-marked assays, 6 CE-marked sample preparation products 9 SFDA approved assays 98 general purpose reagents
-16- Sample & Assay Technologies Global In Vitro Diagnostics Market
By Segment (2006E) Growth Drivers
In Vitro Diagnostics Molecular Diagnostics Estimated market volume: ~US$ 33B (2006) Estimated market volume: ~US$ 2.4 billion (2006) CAGR 2006 – 2010: 7% CAGR 2006 – 2010: 17%
Other CAGR 3.5% Hematology CAGR 3.9%
Clinical Chemistry Blood banks Viral CAGR 2.6% Others Infections Molecular Immuno-assays Diagnostics CAGR 4.7% US$ 2.4B CAGR 17.0% Blood Glucose Non-Viral Oncology CAGR 11.5% Infections Genetic Microbiology Testing CAGR 5.7%
Hemostasis Point of Care Coagulation CAGR 10.9% CAGR 10.2%
MDx: Fastest Growing Segment in In-Vitro Diagnostics
Note: IVD market estimates vary by source and range between ~$29B–$35B Source: RBC Capital Markets, Nature Biotechnology (August 2006), Digene internal reports, Recap, Kalorama, BioCentury, L.E.K. Analysis
-17- Sample & Assay Technologies Breadth and Depth in Molecular Diagnostics
Growth Drivers
Infectious Blood- Viral Non-Viral Genetic Oncology screening Sample Technologies 9 9 999
Open Assay Technologies 9 9 999
Distributed Closed Assays 9 9 9 9 by (HLA, PGx) (incl. HPV) Partners
Leading Player – Broad Footprint
-18- Sample & Assay Technologies QIAGEN Platforms
Growth Drivers
Sample Technology Automation (Broad portfolio of QIAGEN solutions) Sample Biorobot MDX Processing BioRobot 8000 BioRobot M48 BioRobot EZ1 QIAcube
Endpoint PCR cycler (standard lab equipment, Real-time off patent 2008) PCR cycler Rapid Detection (standard lab Capture equipment Genetic ABI, Roche, Liquichip Corbett) Analyzer (Luminex) (eGene)
• Assay •Hybrid • Quantitative • QIAplex • Qual. PCR technology Capture PCR multiplexing QIAplex low
• Throughput • Ultra-high • All (open • Medium • Medium platform)
• Assays • HPV, • 120 real • ResPlex, • HLA and CT/GC and time PCR MVPplex others others assays (HAI)
-19- Sample & Assay Technologies Significant Untapped Potential for HPV Testing
Growth Drivers
Increased global awareness of the link between HPV and cervical cancer Accelerated adoption into medical guidelines U.S. Current tests: ~ 8.4M Vaccine campaigns promote awareness Penetration rate: ~ 22% New genotyping tests expand market to include HPV positive patients Significant untapped potential within developing
Europe countries Current tests: ~ 2.0M Penetration rate: ~ 6% Infrastructure + breadth of combined offering key
Asia/Latin Europe America ~ $350M ~ $280M Asia/Latin America: Current tests: 0.9M U.S. Penetration rate: ~ 3% ~ $490M Total: >$1.1 billion
Substantial Growth Potential - Increasing Awareness
-20- Sample & Assay Technologies HPV Studies
Growth Drivers
North America Canada (NEJM)
Europe UK (2 trials – 1 RCT) Netherlands (Meijer - RCT) Italy (Ronco - RCT) Sweden (Dillner - RCT) Finland (Nieminen - RCT) France (Clavel) Germany (Petry) Switzerland (Bigras) Denmark (Kjaer) ECCC (Dilner, Petry, Iftner, Cuzick, Clavel, Bosch, Sanjose, Kjaer) – meta- analysis of EU trials
RCT = Randomized Controlled Trials (government funded)
Demonstrate Superior Value of HPV Testing
-21- Sample & Assay Technologies Molecular HPV Testing Outperforms Cytology
Growth Drivers
Key findings & recommendations to date: HPV testing consistently more sensitive HPV testing detects lesions earlier HPV a better predictor of risk for older women Follow up of HPV+/cyto normal women with genotyping or cytology improves specificity Liquid based cytology (LBC) does not detect more high-grade squamous intraepithelial lesions (HSIL) and will not be recommended (Italy) HPV testing is safe and likely cost effective Extended interval = benefit for women and lower costs for health care system Self sampling effective to extend coverage for unscreened
HPV Frontline Primary Screen is the Logical Next Step
-22- Sample & Assay Technologies HPV Testing
Is Not Comparable to Other Infectious Disease Tests! Growth Drivers
HPV testing is different than typical infectious disease testing HIV test detects HIV infection HPV test detects HPV infection and prevents cancer
Ultimate goal is clinical, not analytical, sensitivity High analytical sensitivity often a disadvantage The HC2 HPV Test has demonstrated clinical performance Studies published in peer-reviewed journals on over 250,000 women.
QIAGEN HPV test is positioned to remain the standard of care FDA approved, launched 1998 Exciting pipeline with new tests to come Proven, superior clinical performance Industry-leading throughput and automation
HPV Testing Differs from Infectious Disease Testing
-23- Sample & Assay Technologies Assay Centers of Excellence
Growth Drivers
QIAGEN Germany QIAGEN Maryland 30 in Assay Development, 300 total > 90 in R&D
QIAGEN China 30 in R&D
Dx Assays Joint Venture 30 in Assay Development
~ 150 in MDx Development 400 in R&D
-24- Sample & Assay Technologies Sales Approach in Molecular Diagnostics
Growth Drivers
Multiple Channels – Multiple Products Leveraging portfolio with blockbuster product plus sample and assay technologies Multi-channel approach Global reach
Direct to Consumer Consumers Advertising Campaigns Focus: HPV Awareness
Clinical Sales Force Physicians (80 Professionals) Focus: HPV Awareness
Laboratory Sales Force (170 Professionals) Laboratories Focus: Complete Portfolio Focus: Sales
-25- Sample & Assay Technologies Expanding in Applied Testing
Growth Drivers
Sales (Q2 run rate) approx. $60 million
Sample technologies: proven standard
Assay technologies Veterinary Surveillance (e.g. avian flu)
Applied Testing Focusing on forensics, veterinary, biosecurity Others: food, quality control environmental, lifestyle Great success in forensics (sample technology is key!) Exciting product launches in 2008 in veterinary (“cadus” line)
Proven Industry Standards Fuel Molecular Testing in Applied Markets
-26- Sample & Assay Technologies QIAGEN
Strong Financial Base – Exciting Model Financials
Technology Leadership Sales Strength
MDx
Appl. Testing M Pharma KAM A R Biomedical K E Research T S Inside Sales E-commerce
Growth Drivers Financials
280.000
260.000
240.000
220.000
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0 1993 1994 1995 1996 1997 1998 1999 2000 2001
-27- Sample & Assay Technologies QIAGEN Revenues 2003 – 2007E
Financials
US$ millions 650 CAGR = 15% 600 2003-2006
550
500
450
400
350
300
250
200 2003 2004 2005 2006 2007E Revenues excluding the synthetic DNA business unit, sold in Q2 2004
QIAGEN – Continuous Double Digit Revenue Growth Rates
-28- Sample & Assay Technologies QIAGEN Net Income 2003 – 2007E
Financials
US$ millions 110 CAGR2003-2006 = 22% 100
90
80
70
60
50
40
30 2003 2004 2005 2006 2007E EPS US$ 0.32US$ 0.39 US$ 0.46 US$ 0.56 US$ 0.61- Adj. US$ 0.62 All figures excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) QIAGEN – Strong Earnings Engine
-29- Sample & Assay Technologies Fourth Quarter and Fiscal Year 2007 Guidance
Financials
Guidance FY 20071
Revenues (US$m) 614 - 635 EPS (US$), adj.2, old 0.55 – 0.59 EPS (US$), adj.3, new 0.61 – 0.62
Guidance Q4 20071
EPS (US$), adj2 0.13 – 0.14
1 based on January 31, 2007 foreign currency exchange rates 2 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) 3 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) as well as including a tax benefit of US$0.02 in Q3 2007
QIAGEN Significantly Increases EPS (adj.) Guidance by US$ 0.03
-30- Sample & Assay Technologies Key Investment Considerations
Summary
Leading, focused: sample and assay technologies Strong financial performance Strong growth projected: organic growth rate: ~15%
Proven innovation leadership in industry Successful acquisition track record
Core competency drives growth opportunities MDx Pharma<->MDx Applied Testing
Analyst Day on February 14 in NYC
-31- Sample & Assay Technologies