Thermo Fisher Scientific terminated its agreement to obtain QIAGEN after the lead failed to convince enough QIAGEN shareholders to approve the prospective $12.5 billion agreement.
Shareholders who own only 47% of QIAGEN’s notable shares accepted the acquisition transaction, which required the approval of the owners of 66.67% of those shares.
The rejection came even though Thermo Fisher softened the deal last month by expanding its offer value consistent with a steady percentage of $39 (€46) to $43 (about $51). This added $1 billion to the prospective cost of the deal compared to the initial $11.5 billion when the acquisition plans were announced on March 3. In addition, QIAGEN reduced the consistent minimum percentage of consistent percentages whose owners had to approve the agreement by 75%. .
However, the softened agreement was not enough to attract a fierce critic, hedge fund Davidson Kempner, who last week increased its share of QIAGEN from 3.6% to 8%. “Davidson Kempner considers Qiagen’s fair price to be between $48 and €52 consistent with a consistent percentage [$57 to $61], and considers the existing offer offer to be completely inadequate,” the company said on August 3, and said it would not bring its consistency with Thermo Fisher’s percentages.
“We respect the resolution of our shareholders and will now continue to execute our strategy of developing and creating a higher price with our Sample to Insight portfolio that meets the developmental desires of life sciences and molecular diagnostics,” HH Bjorklund, PhD, Chairman of QIAGEN’s Supervisory Board, said in a corporate statement.
QIAGEN will pay Thermo Fisher a $95 million “expense refund payment” after the transaction is complete.
“Thermo Fisher is a disciplined acquirer with a pleasure forged in executing value-creating transactions. We remain incredibly well placed to put in place our shown expansion strategy and continue to generate significant returns for our shareholders,” Said Marc N. Casper, President and CEO of Thermo Fisher, in a separate statement.
An analyst with Casper’s assessment that Thermo Fisher (TMO) can thrive beyond the completion of the QIAGEN agreement
“We don’t see any problems in the completion of the offer,” Puneet Souda, managing director of life sciences tools and diagnostics at SVB Leerink, and his colleagues on a note to investors wrote today. “We expect TMO to continue its track record of success in researching, integrating and operationsing its merger and acquisition goals.”
CoVID-driven growth
Thermo Fisher said it would gain benefits from the deal because the acquisition of QIAGEN would allow it to expand its molecular diagnostics portfolio with a new SARS-CoV-2 coronavirus control being evaluated in China and other infectious disease controls.
QIAGEN benefited from an increase in the call for COVID-19 tests, to what the company attributed last week to its quarterly results at the right time: net profit doubled more (101%) $89.8 million a year per year to $44.7 million, and jumped 75% in the first part of this year to $129.6 million from $74.2 million a year earlier. Net sales increased 16% in the last quarter of the moment, from $381.6 million to $443.3 million, and to 12% by January-June 2020, to $815.3 million from $730.3 million.
The unprecedented call for products used in the coronavirus is driving the functionality of QIAGEN by 2020. Our workers around the world are fully committed to serving all of our consumers in the public fitness reaction to the pandemic around the world,” QIAGEN CEO Thierry Bernard said in August. 4. “Sales of verification responses for the new coronavirus were strong in all regions in the first part of 2020, for life science studies and among Molecular Diagnostics customers to be used to identify patients with COVID-19.”
QiAGEN’s expansion driven by COVID-19 contrasts with last year’s turbulence, when the company changed its NGS business around a 15-year partnership with Illumina to increase the availability and use of in vitro diagnostics in precision medicine by creating a diversity of diagnostics. tests designed to be carried out in Illumina’s diversity of Dx sequencers.
More dramatically, Peer Schatz, the company’s long-time CEO and chairman of the board of directors, said in October 2019 that he resigned after the company missed the third quarter’s earnings targets. Schatz’s departure raised the hypothesis among industry and market observers that the company is ready for an acquisition.
A month later, QIAGEN revealed that it had gained “several conditional and non-binding indications of interest” when it began a review of strategic opportunities, a review that ended the following month by saying that it would continue as an independent company.
Thermo Fisher has also benefited from COVID-centric growth, within a broader set of product offerings, Souda and its colleagues said, reporting that the company produces 10 million kits per week to meet growing demand.
“The administration guided COVID’s third quarter earnings to $1.1 billion after approximately $1.3 billion in the current quarter. The merit of testing turns out to be durable, as PCR remains the benchmark for virus detection and TMO kits are flexible for manual applications, semi-automated to a fully automated configuration (built through third parties) “, Souda and his colleagues added. “We still think that the $1.1 billion may be conservative in the third quarter.”
Thermo Fisher reported a year-on-year increase of 3.3% in the second quarter’s net source of revenue from $1.119 million to $1.156 million; and a 10% increase in revenue to $6.92 billion from $6.32 billion.
“We don’t see any problems for TMO given its already extensive diversification in its portfolio and the continued benefits of obtaining COVID-19 testing through its TaqPath PCR kit franchise, which is now increased through the Amplitude automated system,” Souda wrote.
“TMO also supports more than two hundred vaccination and healing projects aimed at COVID-19 through its pharmaceutical products and facilities department, so we see many benefits for TMO in the pandemic.
Growth strategy
QIAGEN stated that its expansion strategy included the creation of a coVID-19 diagnostic response portfolio by:
Also on the COVID-19 front, QIAGEN said it will expand the production capacity of reagents sold to other corporations for their own COVID-19 testing and accelerate the progression of their own tests to trip over the virus.
These controls come with serological control and immediate antigenic control, whether they are scheduled for publication at this time this year.
Bet on NeuRoDx
Another detail of QIAGEN’s strategy is to drive the commercialization of QIAstat-Dx and NeuMoDx, the latter by obtaining NeuMoDx, a diagnostic developer from Ann Arbor, MI, who has intensified its efforts in months in COVID-19 testing.
QIAGEN already owns 19.1% of NeuMoDx’s shares and announced plans to get the remaining 80.1% for approximately $234 million. QIAGEN said it would reveal more main points of its planned acquisition when the effects of the third quarter are released later this year.
“QIAGEN expects NeuMoDx to provide significant long-term sales contributions in its differentiation as a fast, built-in PCR platform that provides a compromised COVID-19 verification, as well as an expanding verification menu for other infectious diseases, such as a new combination of multiple verification influenza controls, RSV (respiratory syncytial virus) and SARS-CoV-2 virusArray, which is scheduled to be launched by 2020” QIAGEN said.
QIAGEN also said it would expand the QIAstat-Dx syndromic testing platform by investing in increased formula cartridge production capacity at the Hilden, Germany and Barcelona, Spain sites, as well as expanding the test menu on the platform to trip various diseases.
Other parts of QIAGEN’s expansion strategy include:
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