FRANKFURT Genetic testing specialist Qiagen NV QGEN.DE said it bought privately held U.S. software developer Ingenuity Systems Inc for $105 million to expand further into genetic sequencing technology.
The deal, which the company expects will add to earnings per share from 2015, was announced on Monday as Qiagen cut its full-year profit outlook, citing U.S. government cutbacks that are hurting research institutions.
Silicon Valley-based Ingenuity helps scientists and lab operators to structure and interpret the vast amounts of genetic data that new sequencing technology has made available.
Devices pioneered by companies such as Life Technologies Corp (LIFE.O) and Illumina Inc (ILMN.O) have dramatically cut down the time and cost of sequencing human DNA. But this has created a bottleneck when it comes to the analysis and interpretation of the stream of new biological data.
Qiagen, which last year bought Boston-based Intelligent Bio-Systems Inc to make inroads into the fast-developing genetic sequencing market, remains on track to launch its first sequencing device in the second half and now hopes its customers will also buy Ingenuity software to parse the data.
"It's no longer enough to have a readout of all the data, you need to have database algorithms and an interpretative system," CEO Peer Schatz said in a statement.
The German company now expects adjusted earnings per share of about $1.13 for 2013, down from a previous target range of $1.16-$1.18, amid budget cuts in U.S. academic research and costs linked to integrating Ingenuity.
First-quarter adjusted net income was flat at $54.7 million, slightly shy of the average analyst estimate of $55.9 million in a Reuters poll. Quarterly sales edged 2 percent higher to $303.6 million.
(Reporting by Ludwig Burger; Editing by Sriraj Kalluvila)