October 8, 2019 -- Qiagen and Illumina have signed a 15-year strategic partnership on IVD tests that will take advantage of their respective strengths in companion diagnostics and sequencing systems. The news came as Qiagen reported disappointing preliminary earnings for the third quarter and the departure of longtime CEO Peer Schatz.
Per the deal, announced on October 7, Qiagen gets nonexclusive rights to develop and commercialize IVD kits with Illumina's MiSeqDx and NextSeq 550Dx systems. Qiagen may also expand the agreement to include new diagnostic systems developed by Illumina. Furthermore, the partnership may involve the development of companion diagnostics for Illumina's TruSight Oncology genomic profiling assays for immunotherapy.
In a statement, the companies said the partnership will broaden the use of and patient access to IVD kits based on next-generation sequencing (NGS), including companion diagnostics. While the partners aim to start with oncology IVD kits, they envision expanding the collaboration to a range of other therapeutic areas, including cardiology and infectious disease.
The partnership makes sense given that Qiagen has been successful in developing companion diagnostics and is the key to relationships with pharmaceutical companies, while Illumina leads in sequencing systems, commented Bruce Carlson, publisher of market research firm Kalorama Information, a sister company of LabPulse.com. Not even the large companies can do it alone in today's diagnostic world due to the complexity of molecular approaches, he added.
"This is a positive development for next-generation sequencing's clinical future, not only in diagnostic assessment of disease but also in therapy selection," Carlson said. "But this is still about future development, and we'll watch the products that the collaboration produces. We'll also watch what the competition does -- partnerships oft beget other partnerships."
Sales fall short, CEO steps down
The alliance with Illumina is one of a number of shake-ups at Qiagen. On October 7, the company announced disappointing preliminary sales results for the third quarter.
"For the third quarter of 2019, Qiagen currently expects preliminary total net sales growth of about 3% at constant exchange rates (CER) compared to the outlook for about 4-5% CER growth, and mainly due to significantly weaker-than-expected developments in China," the company said in a statement.
Qiagen said it will focus development on the collaboration with Illumina and expand its portfolio of next-generation sequencing consumables that may be used with any sequencer. The company will discontinue its own development of NGS instruments, but it will continue to provide customer support for its GeneReader NGS system for smaller gene panels. Qiagen is also overhauling its manufacturing organization, resulting in a restructuring charge for the third quarter.
Also on October 7, Qiagen announced that Peer Schatz resigned from his position as CEO and chairman of the management board after 27 years with the company, though he will continue to serve in an advisory capacity. In a statement, Schatz said he is looking forward to new opportunities and challenges outside of Qiagen.
The company's head of molecular diagnostics, Thierry Bernard, is stepping up to the role of interim CEO and will work jointly with Roland Sackers, Qiagen's chief financial officer. Meanwhile, the company will look for someone to fill the role permanently.