QIAGEN (QGEN) Announces Initiatives to Create Next-Gen Sequencing Portfolio

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QIAGEN N.V. (NASDAQ: QGEN) today unveiled an advanced initiative to enter the field of next-generation sequencing (NGS) that aims to establish these technologies as routine processes used in new areas such as clinical research and molecular diagnostics.

QIAGEN is in the advanced stages of creating sample-to-result, efficient and cost-effective NGS workflow solutions. These will combine a broad range of QIAGEN products - including automated sample preparation solutions (nucleic acid extraction, DNA enrichment, library preparation and targeted gene analysis panels) - with a previously undisclosed next-generation benchtop sequencer in development with Intelligent Bio-Systems, Inc., a privately held company that QIAGEN has acquired. New bioinformatics, including solutions emerging from a new collaboration with SAP AG, will be incorporated into the workflows. A first sample-to-result NGS solution is expected to be launched next year, while details on specifications and launch plans are set to be released in early 2013.

Key elements of this initiative include:

• Content: The development of a broad portfolio of gene panels designed for NGS analysis based on QIAGEN's extensive offering of molecular content, including GeneGlobe (http://www.geneglobe.com), an online portal that offers access to more than 60,000 well-defined and characterized molecular assays. In the first wave, QIAGEN plans to offer eight preconfigured gene panels for use in cancer, as well as enable customers to create customized panels for specific molecular pathways and diseases.
  
• Sample technologies: An extensive range of NGS sample preparation products is planned to be launched that are based on QIAGEN's global leadership position in sample technologies and enzymology.
  
• NGS module: A previously undisclosed NGS benchtop sequencer is in late stages of development with Intelligent Bio-Systems, Inc. (IBS), a privately held U.S. company that QIAGEN has acquired. This novel system can process multiple samples in parallel with highest flexibility and performance, and benefits from the use of proprietary sequencing by synthesis (SBS) technology exclusively licensed from Columbia University.
  
  Building on elements of previous IBS designs as well as on QIAGEN technologies, this new system - which is expected to enter beta testing with customers in 2012 - seeks to offer a new dimension of benefits and cost savings. Key features include new sample technologies and software as well as the ability to process up to 20 individual samples in parallel without a need for pooling and bar-coding, which can result in significant time and cost savings in clinical sequencing. Its design allows for flow cells and reagents to be loaded continuously while in operation, and also for up to 20 different assay types to be processed simultaneously and in random order. Many of these features - particularly the parallel processing of multiple samples and continuous loading of reagents and random samples - are considered essential for clinical sequencing. Two automation alternatives are being developed in combination with QIAGEN platforms to create workflow solutions from biological sample through to final result. One workflow integrates the NGS module into the QIAsymphony automation family, while a second is based on the QIAcube automated sample preparation system. Both workflows will offer extensive bioinformatics, including from the SAP collaboration. Financial terms of the IBS acquisition, which was completed during 2012, were not disclosed.
  
  "We are very excited to join forces with QIAGEN, which is an ideal partner to bring our new ultra-low cost sequencing technologies to the market as part of a complete workflow that will expand our product's use into new areas," said Steven J. Gordon, Ph.D., CEO and founder of Intelligent Bio-Systems. "We can deliver greater value to our customers from our novel technologies by leveraging QIAGEN's leadership in sample preparation, advanced gene panels and global reach along with the bioinformatics expected to emerge from the collaboration with SAP. Our goal is to better address the demands of clinical and core lab customers for complete solutions, since many have been struggling to adapt existing sequencing platforms to their workflows."
  
  
• Bioinformatics: SAP and QIAGEN are collaborating on bioinformatics efforts aimed at significantly reducing the time required for the analysis of sequencing data. The basis for the collaboration will be to apply the breakthrough SAP HANA® platform in next-generation sequencing interpretation. Reducing this time period is seen as an important factor in driving greater use of sequencing technologies in new areas and reducing overall operating costs.

QIAGEN intends to offer this new product portfolio across all of its customer classes, with priority focus on clinical research in Academia and Pharma as well as in some Molecular Diagnostics franchises, including select areas of Personalized Healthcare.

QIAGEN currently anticipates the investments planned to create this new NGS portfolio to be dilutive to adjusted EPS (earnings per share) by approximately $0.01 for full-year results in 2012 and by approximately $0.02 in 2013, but to be accretive to full-year results in 2014.

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