As Kalorama publishes its latest update in molecular diagnostics, finding a 13 billion-dollar market, a major merger is set to change things.  Here’s what to expect.

The market picture for molecular diagnostics had remained stable over the years.   While there are scores of molecular diagnostic companies, and an explosion of PCR test kit companies during the recent pandemic, big market share hasn’t changed.  The main players – Diagene (now Qiagen), Roche, Abbott, GenProbe (now Hologic), Thermo Fisher have held top market share in various categories since the beginnings of DNA-based testing.  Thus the merger of two traditional molecular giants is big news.

After an on-and-off courtship, Thermo Fisher Scientific announced it is set to acquire Qiagen in a deal worth $11.5 billion. The transaction will give Thermo Fisher access to Qiagen’s molecular diagnostics expertise and potentially lead to faster development of diagnostic tests.

The deal values Qiagen at 39 euros ($44) per share, which is 23% higher than its closing price on March 2.

Thermo Fisher said the deal will expand its specialty diagnostics portfolio by adding Qiagen’s capabilities in molecular diagnostics. Thermo Fisher’s strengths include next-generation sequencing (NGS) and quantitative polymerase chain reaction (qPCR) technologies, while Qiagen markets molecular diagnostics for infectious diseases.

Qiagen products will benefit from Thermo Fisher’s commercial and geographic reach. In 2019, Qiagen reported revenue of $1.526 billion in 2019, up by 4% after currency adjustments from 2018. The company reported a loss for the year of $41.5 million, compared with net income of $190.4 million in 2018.

Table 1-3: Complementary diagnostic products offered by Thermo Fisher, Qiagen
Thermo FisherQiagenBenefits of combination
Allergy and autoimmunity

Transplant diagnostics

QuantiFeron-TB Gold Plus latent tuberculosis detection testIncreased access to a more comprehensive specialty diagnostics portfolio
Genetic analysis technologies (including qPCR, NGS, Sanger, and microarrays)Molecular diagnostics for infectious disease (QIAsymphony)

Syndromic testing capability (QIAstat)

Companion diagnostics offering

Bioinformatics capabilities

Higher-value diagnostic insights (accuracy, speed)

Improved healthcare economics

Source: Thermo Fisher investor presentation.

Thermo Fisher’s interest in acquiring Qiagen was publicized in a Bloomberg report in November, boosting Qiagen’s value to $8.3 billion. At the time, Qiagen said it was considering offers from multiple suitors and reviewing what would make the most sense strategically. However, in January, Qiagen said the options were not compelling and that all discussions regarding an acquisition had been terminated.

The deal will affect several fields, such as lab instrumentation, next-generation sequencing, and pharmaceutical research.

Qiagen has made a number of acquisitions that expanded its position in molecular diagnostics, and it includes tests in just about every facet of molecular testing: automated DNA sample processing, molecular HPV testing, companion test development, liquid biopsy, NGS automation, and, last but not least, digital PCR.

Qiagen has several deals with pharmaceutical companies in place and creates greater opportunity in personalized medicine for Thermo Fisher. Qiagen is developing a pipeline of assays for preventive screening and diagnostic profiling of diseases and the detection of biomarkers to guide precision medicine in cancer and other conditions, Carlson commented.

In terms of IVD company rankings, Thermo Fisher is the fifth largest and Qiagen ranks No. 10, according to Kalorama estimates. The combined company would have $4 billion to $5 billion in IVD-related revenue. The top four — Roche, Abbott, Danaher, and Siemens — are very large, but the new entity would be competitive and could change positions.

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