Qiagen shares hit 21-year high as COVID-19 test demand revives
- CFO sees upside for FY guidance
- Dip in test demand seen as temporary-CFO
- Qiagen says it is open for M&A deals
- Shares up 2.6% at 21-year high
FRANKFURT, Aug 27 (Reuters) - German genetic testing specialist Qiagen (QIA.DE) is seeing demand for its COVID-19 tests firming up again, leading it to believe that sagging demand in July was temporary, Chief Financial Officer Roland Sackers said on Friday.
The stock extended gains to hit a 21-year high after the comments, trading 2.6% higher at 47.51 euros by 1520 GMT versus a record 61.24 set in 2000.
Qiagen, whose shareholders a year ago rebuffed a takeover bid by life science tools maker Thermo Fisher (TMO.N), had said in July that faster-than-expected uptake of vaccination campaigns weighed on demand for its diagnostics kits, prompting it to cut its full-year guidance.
Sackers told Reuters that demand for tests had taken yet another turn as continued breakthrough infections from the Delta coronavirus variant in some vaccinated people was fuelling test kit demand.
"We are now at a turning point where we realise that a one-off boost is turning into normal business. COVID is becoming an infectious disease that stays with us. Therefore the tests will stay," he said.
In July, Qiagen predicted currency-adjusted sales growth of at least 12% in 2021, down from a previous outlook of 18%-20% amid a dip in demand for COVID-19 tests, even though second-quarter non-COVID related business including latent tuberculosis tests surpassed expectations.
"A growing COVID business is an additional upside to our guidance and it looks like we can realise some of that upside," Sackers added, when asked about the revised outlook. "I'm very confident that we'll have a good third quarter."
Industry executives and health officials have told Reuters that U.S. companies are scrambling to boost production of coronavirus tests as infection cases soar, and schools and employers revive surveillance programmes. read more
A spokesperson for Qiagen, which also serves the U.S. market, said it had the capacity to meet growing demand there.
Asked about the prospect of Qiagen becoming a takeover target again, Sackers said he had strong confidence in the group's growth potential but would not rule out any tie-up.
Qiagen could purchase companies worth well over $1 billion but share buybacks were also an option to spend excess cash, he added.
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