Just weeks after rejecting Thermo Fisher Scientific Inc.'s overtures, Qiagen NV completed its own deal – the acquisition of the final 80.1% of diagnostics instruments company Neumodx Molecular Inc. for $248 million in cash. Qiagen, based in Hilden, Germany, bought a 19.9% stake in Neumodx back in 2018 with the option to purchase the rest for $234 million. With U.S. regulatory approval recently obtained, the deal closed with an additional $14 million in customary adjustments for cash, indebtedness, and transaction costs.
While a substantial transaction, Qiagen’s acquisition pales in comparison to the proposed purchase of the company itself by Thermo Fisher. That deal had been valued at $11.5 billion when initially proposed in March 2020 and rose to $12.67 billion when the U.S. firm sweetened the deal in July.
Back in December 2019, Qiagen had said that a review of its strategic options indicated that a standalone position represented its best path. The events of 2020 give strong support to that analysis. “The magnitude and duration of the global coronavirus pandemic have proven the increasingly critical importance of molecular testing to society. Qiagen’s business prospects have improved significantly, as shown in our performance for the first half of 2020 and the strong outlook for the rest of this year and for 2021,” said CEO Thierry Bernard in announcing that shareholders rejected Thermo Fisher’s offer.
At the time, the company said that it would proceed with the Neumodx acquisition. “In light of the outcome, we will also move forward with our plans to fully acquire Neumodx Inc., which is growing fast thanks to its unique offering of molecular diagnostic testing platforms along with a solution for coronavirus testing and an expanding range of assays in Europe, the U.S. and rest of the world.”
Continued investment in new unit
The platform developed by Ann Arbor, Mich.-based Neumodx enables industry-leading turnaround time for PCR diagnostics systems, providing a valuable complement to Qiagen’s portfolio of automated molecular testing solutions.
“Neumodx’s automated molecular testing platforms offer a unique combination of speed, flexibility, throughput and ease of use for molecular diagnostics assays, including laboratory-developed tests,” said Bernard. “Neumodx has built an unparalleled platform that has demonstrated superior value during the coronavirus pandemic. This will expand Qiagen’s portfolio of automated testing solutions and provide another driver for future growth.”
As part of the initial deal, Qiagen has distributed the high-throughput Neumodx 288 and medium-throughput 96 platforms in markets outside the U.S. since 2018. All in all, the transaction will bring 100 instruments into the market under the Qiagen label.
Qiagen plans to “integrate [Neumodx] as smoothly as we have done with all other acquisitions in the past,” a company spokesperson told BioWorld. “CEO Jeff Williams will resign, but other key senior leaders will stay on board to ensure we keep the momentum.” About 160 Nuemodx staff will be folded into Qiagen, boosting its total number of employees to nearly 5,400.
If anything, the Ann Arbor unit is likely to see additional resources as part of Qiagen’s development strategy. “This is about growth, not about reduction,” added the spokesperson. Neumodx “is a growth driver for Qiagen, and awe will invest significantly into [Neumodx] production capacities in Ann Arbor and other resources to further leverage their great success.”
Neumodx’s two ultra-fast PCR-based devices and the company’s true continuous random access platform boast the fastest fully automated turnaround time currently available, with results delivered in an hour instead of the typical three hours. Their speed enables processing of a substantially more tests, an advantage likely to prove invaluable to laboratories as the COVID-19 pandemic again sees rapidly rising rates of infection in Europe and the U.S. The analyzers utilize a proprietary reagent technology, Neudry, which integrates magnetic particle affinity capture with real-time PCR chemistry in a multisample cartridge.
The deal also adds 13 assays CE-marked for in vitro diagnostic use to Qiagen’s line up. These include tests for three blood borne viruses – HIV, hepatitis C, and hepatitis B – as well as several focused on viruses associated with transplants as well as many sexually transmitted viruses.
The U.S. FDA recently authorized the company’s group B Streptococcus assay for use in antepartum pregnant women. That assay can identify women with strep in the birth canal so steps can be taken to ensure the baby is not infected.
Neumodx’s SARS-CoV-2 test received emergency use authorization in March. Qiagen plans to launch an assay that identifies and discriminates between influenza A, influenza B, respiratory syncytial virus (RSV) and SARS-CoV-2 by the end of the year, which has been in development by Neumodx. Another four assays are in the pipeline.