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Sample & Assay Technologies
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J.P. Morgan Healthcare ConferencePeer M. Schatz Chief Executive OfficerJanuary 2012
Sample & Assay Technologies
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Forward looking statements
Safe Harbor Statement: Certain of the statements contained in this presentation may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's
products, markets, strategy or operating results, including without limitation its expected operating results, are forward-looking, such statements are based on current expectations and assumptions that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations, regulatory processes and dependence on logistics), variability of operating results and allocations between business segments, the commercial development of markets for our products in applied testing, personalized healthcare, clinical research, proteomics, women's health/HPV testing and nucleic acid-based molecular diagnostics; changing relationships with customers, suppliers and strategic partners; competition; rapid or unexpected changes in technologies; fluctuations in demand for QIAGEN's
products (including fluctuations due to general economic conditions, the level and timing of customers' funding, budgets and other factors); our ability to obtain regulatory approval of our products; difficulties in successfully adapting QIAGEN's
products to integrated solutions and producing such products; the ability of
QIAGEN to identify and develop new products and to differentiate and protect our products from competitors' products; market acceptance of QIAGEN's
new products and the integration of acquired technologies and businesses. For further
information, please refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
Regulation G: Some of the slides in this presentation contain certain summary information about QIAGEN N.V.’s
sales, gross profit, operating income, net income, and earnings per share, which information is presented on a “non-GAAP financial measures”
basis rather than in accordance with U.S. generally accepted accounting principles (GAAP). Please review QIAGEN’s
press releases, which can be found in the Investor Relations section of QIAGEN’s
webpage under www.QIAGEN.com, for information on the Company’s operating income, net income, and earnings per share presented
on a GAAP basis. Such GAAP-basis information will also be contained in the Company’s reports on Form 20-F or Form 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission.
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Sample & Assay Technologies
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World leader in Sample & Assay Technologies
Enable access to molecular information
Biological sample to digital result
> 500 core products
Consumable kits and instruments
> 500,000 customers worldwide
Molecular Diagnostics
Applied Testing
Pharma
Academia
Innovative power
~2,500 patents
Healthy financial position
Strong cash conversion
Improving margins
2010 key figures (In $ millions)
Net sales (CER) 1,087 + 8%
Adjusted net income 222.7 +12%
Adjusted EPS
(In $ per share) 0.93
Free cash flow 171.1
Employees 3,600
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CER –
Constant exchange rates
Sample & Assay Technologies
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Broad product offering with common purpose
From biological sample to clinical result
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SAMPLE Technologies ASSAY
TechnologiesBIOLOGICAL SAMPLE
VALUABLE MOLECULAR
INFORMATION
Sample & Assay Technologies
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Pharma
Making improvements in life possible
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Molecular revolution is only just beginning
How do we secure food supplies and protect
public safety?
Applied Testing AcademiaMolecular Diagnostics
How do we fight diseases
and improve healthcare?
How do we develop
better and safer drugs?
How do we achieve
scientific breakthroughs
even faster?
Sample & Assay Technologies
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Operating in attractive markets
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Applied Testing AcademiaMolecular Diagnostics
9M 2011 sales ~46% ~7% ~21% ~26%
Long-term growth opportunities +++ +++ ++ +Key customers
Reference labs
Hospitals
Forensic labs
Industrial
Government agencies
Big Pharma
Specialty / Biotech
CROs
Government research
Academic and private labs
Highlights
Personalized Healthcare
Virology
QuantiFERON
HPV
Forensics
Vet and food safety portfolio
GeneGlobe:
Pathway analysis
Biomarkers
Trusted brand
Involvement with breakthroughs
Translational research
9M 2011 sales: $835.3 million
Sample & Assay Technologies
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Covering R&D continuum to meet customer needs
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Automation solutions
Basic research Biomarkers Translational
medicine
Clinicaltrials
Regulatory
approvals
Productcommercialization
Academia
Pharma
Molecular Diagnostics
Applied Testing
Sample & Assay Technologies
Sample & Assay Technologies
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Molecular Diagnostics
Well positioned in competitive landscape
Applied Sciences MDx MDx
Sample Technologies
Life Sciences - - - -
Molecular Diagnostics (MDx) -
Assay Technologies
Life Sciences -
MDx -
Automation instruments -
R&D continuum coverage - - - -
Life Sciences customers
Academia - - - -
Pharma - - - -
Applied Testing - - - -
MDx
customers
Prevention - - - -
Profiling - - - -
Personalized Healthcare - - - -
Point of Need - - - -
Geographic presence
Narrow Broad
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Academia / Pharma
/ Applied Testing
Sample & Assay Technologies
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Growth drivers in place, addressing challenges
Growth driver contributions
2011 Near-
to medium-term
Long-term
Key growth drivers
QIAsymphony
Profiling: Viral load testing
Personalized Healthcare: CDx
Applied Testing: Forensic standards
Applied Testing: Veterinary/food safety Academia/Pharma: Molecular pathways Academia/Pharma: Translational medicine MDx
Prevention: QuantiFERON
Key challenges
Lower U.S. healthcare utilization (HPV) ()U.S. HPV competition reduces growth ()Managing broad pipeline Macroeconomic factors
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Long-term positivefundamentals
Short-termtransitory
headwinds
Sample & Assay Technologies
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Preparing for a new growth phase after disruptions
2007 2009 2011 2013
Expand life sciences leadership and build up MDx Targeted acquisitions Customer relations Global expansion
Growth drivers for next wave
QIAsymphony
Expanding test menu
High-growth markets
Personalized Healthcare
Updatedgrowth plan
Recession impact
HPV uptake in U.S.
R&D funding
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Project Full Potential:
1. Accelerate sales growth
2. Reallocate resources
Sample & Assay Technologies
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Strategic initiatives to drive growth and innovation
Drive platform success
Roll out QIAsymphony
worldwide
Advance QIAensemble
strategy
Leverage leadership in Sample & Assay Technologies
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Add content
New tests across all customer classes
Broaden geographic presence
Target high-growth emerging markets
Grow efficiently and effectively
Sustained growth and improved profitability
Leverage synergies across customer classes
Best-in-class team and work environment
Molecular Diagnostics
Applied Testing
Academia
Sample & Assay Technologies
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Delivered on 2011 goals, setting ambitions for 2012
Strategic initiatives 2011 goals 2012 goals
End-2011 target: >550 QIAsymphony
systems
Decapper
launch
Update QIAensemble
strategy
Increase QIAsymphony
base
Improve HPV test automation
Deliver QIAensemble
milestones
Selected submissions:
KRAS (Erbitux)
KRAS (Vectibix)
Influenza
careHPV
Cellestis
and Ipsogen
Complete selected submissions:
EGFR (Tomtovok)
artus
CMV
QuantiFERON
CMV… and many others
Dynamic growth in top 7 EGM
Direct entry in India / Taiwan
Target high-growth regions: Eastern Europe, Asia, Americas
Sales and earnings growth
Launch productivity initiatives
Reallocating resources
Grow at a faster pace than 2011
Drive productivity initiatives
Improve margins
Drive platform success
Add content
Grow efficiently and effectively
Broaden geographicpresence
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Sample & Assay Technologies
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QIAsymphony
RGQ: New era of automation
QIAsymphony
RGQ –
Integrated workflow QIAsymphony
placements
Most versatile molecular testing system
QIAsymphony
SP
Sample input module
Automates purification
QIAsymphony
AS
Eluate
input
Automates assay setup
Sample Result
Rotor-Gene Q Detection Analysis
End 2011
target
> 550
2008
Achieved 2011 target500
1,000
Installed base
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(QIAsymphony
SP launch)
NEW
Ongoing global expansion(~50 new placements per quarter)
Sample & Assay Technologies
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QIAsymphony
RGQ: Across all customer classes
Americas~40%
Europe~30%
Asia-Pacific/Japan~30%
Asia-Pacific/
Japan~10%
Europe~55%
Americas~35%
Applied Testing
Pharma
Academia~40%
Molecular Diagnostics
~60%
>550 QIAsymphony
placements by end 2011
Sample & Assay Technologies
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QIAsymphony
RGQ driving “lean labs”
Typical mid-sized European hospital laboratory
49 molecular tests
Annual volume: ~70,000 tests and growing
Process tests for 8 hospitals and clinics
Issues
Redundant instruments
Administrative tasks
Need for consolidation
Conducted “lean”
analysis
Minimize waste
Consolidate platforms and vendors
Outcome: 38 of 49 tests
now on QIAsymphony
RGQ
Case study: St. Elisabeth Hospital, Tilburg, The Netherlands
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Assay providers
Com
petit
ors
Com
petit
ors
Past Present
Past Present
Platform providers
Sample & Assay Technologies
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Early phase of long-term product cycle
Sales
Launch ~15 years
New system
Build installed base Expand test menu / Add new features
Maximize value / Develop new system
Typical product cycle
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QIAsymphony
RGQ
(Late 2010 launch)
QIAsymphony
SP/AS (2008-2009 launches)
Targeting sustained QIAsymphony
RGQ expansion
Today
Sample & Assay Technologies
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Adding content to automation platforms
Selected key menu submissions
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QIAsymphony(Marketed)
QIAensemble(In development)
2011submissions
Planned submissions2012
Planned submissions≥
2013
careHPV
artus Influenza
QuantiFERON
tests
therascreen KRAS (Vectibix)
therascreen KRAS (Erbitux)
QuantiFERON
CMV
artus CT/NG
artus CMV
artus HIV
artus HCV
therascreen JAK2
therascreen EGFR
therascreen KRAS (lung)
therascreen BRAF
therascreen BCR-ABL
artus CT/NG
Rotor-Gene Q(Marketed)
Sample & Assay Technologies
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Rapid growth in Personalized Healthcare
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Personalized Healthcare sales2011 estimate: ~$75 million
Co-developmentprojects(Molecular Diagnostics)
Other(Molecular Diagnostics
Clinical research in Academia / Pharma)
Commercial
biomarker assays
(Molecular
Diagnostics)
Milestone payments
Broad portfolio for solid and hematological
tumors
Sample & Assay Technologies
Biomarker analysis and validation
Automation instruments
Third-party manufacturing (OEM)
Ongoing strong double-digit sales expansion
NEW EGFR biomarker test approved in Japan
(December 2011)
NEW ALK biomarker
(January 2012)
NEW IGH1 / IGH2 biomarkers
(January 2012)
Sample & Assay Technologies Leading co-development project portfolio
Selected Personalized Healthcare co-development projects
Project Partner Indication Biomarker Status
Eribitux
(cetuximab)
Colorectal
cancer KRAS Submitted U.S.
(PMA) in H2 2011
Vectibix
(panitumumab)
Colorectal
cancer KRAS Submitted U.S.
(PMA) in H2 2011
PF-00299804
(dacomitinib)
Lung cancer
(NSCLC) KRAS In development
Iressa
(gefitnib)
Lung cancer
(NSCLC) EGFR CE-IVD kit in Europe and
other non-U.S. markets
Tomtovok
(afatinib)
Lung cancer
(NSCLC) EGFR U.S. submission planned
for 2012
Early-stage compound Blood cancer JAK2 In development
Not disclosed Confidential partners Oncology and non-oncology Various In development
Partner of choice: Industry-leading 15 projects under way
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Sample & Assay Technologies
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TB remains a major health issue
QuantiFERON: New gold standard for latent TB detection
Superior to 120-year-old Tuberculin Skin Test (TST)
No impact from BCG vaccination
Only one visit
U.S:, Europe and Japan approval and reimbursement
R&D collaboration with Max Planck Institute (Berlin)
Follow-up PCR-based test
Assess risk for latent TB activation
QuantiFERON-TB Gold: New global test standard
Test group QuantiFERON-TB Gold Tuberculosis Skin Test (TST)
Specificity1 99.2% 65.9%
Sensitivity for active TB 89.0% 76.0%
Bacille
Calmette-Guerin (BCG) vaccination
Unaffected2 20% -
40% are false positive3
Non-TB mycobacterial
infections (NTM)
Mostly unaffected4 In U.S.-born, up to 50% false positive5
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1
Menzies
D, et al., 2007 2
Mori t., et al., 2004 3
Farhat
M., et al., 2006 4
Anderson P., et al., 2000 5
von Reyn
C.F., et al., 2001
Ongoing strong double-digit sales expansion
“TB is an old disease that never went away, and now it is evolving with a vengeance.”-
Zsuzsanna
JakabWHO regional director Europe (Reuters, Sept 2011)
NEW
Sample & Assay Technologies
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Expanding QuantiFERON-TB Gold target markets
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Global addressable market: > 50 million tests
ClinicalPatients with TB symptoms
Contact tracingPublic health / Hospitals
ScreeningHealthcare / Immigration
Travel / Military
ImmunosuppressionCancer / Dialysis
Rheumatology / HIV
QuantiFERON-TB Gold application areas
Sample & Assay Technologies
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Broadening TB portfolio with risk assessment test
Latent or
active
TB
Latent TB
Treatment
Monitoring
Future QuantiFERON
screening opportunity
Treatment
Isolation
Identification and treatment critical to TB disease control
Active TB Test(MDx)
Quantiferon
TB Gold
Risk test
(R&D
project)
Sample & Assay Technologies Addressing HPV market dynamics
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9M 2011
U.S. –
Solidify market leadership
Driving HPV testing conversion
~45% penetration
Guidelines favor HPV / Pap co-screening
Untapped opportunities
Working with customers
Renewing major multi-year contracts
Benefits: Gold standard and switching risks
Providing automation improvements
QIAensemble
Decapper
launched in Q4 2011
Building on HPV status
Blockbuster assay
Strong relations with many labs
Rest of world –
Convert to primary screening
Unrivaled clinical data
Regional actions
Europe: Leader
Latin America: Mexico implementation
Asia-Pacific/Japan: Opportunities
MolecularDiagnostics(non-HPV)
~26%
Pharma~21%
Academia~26%
Applied Testing~7%
$835.3 million
MolecularDiagnostics
(HPV)
U.S. ~15%
Ex-U.S. ~5%
All figures at actual exchange rates
QIAGEN sales overview
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~46%
23
NEW
Sample & Assay Technologies
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Expanding geographic presence
First nine months 2011 net sales by region
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Targeting expansion in Eastern Europe and Latin America
48%
33%
17% Asia-Pacific / Japan
Europe / Middle East / Africa
Americas
Until 2004 2004 -
2007 2008 -
2010 2011 -
Future
US, Europe and Japan
Distributions in other regions
Asia-Pacific
Brazil and Mexico
Turkey
India and Taiwan
Eastern Europe
Latin America
Africa
Sample & Assay Technologies
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Net sales (In $ millions) Adjusted net income (In $ millions)
Sustained sales and earnings improvement
2005 –
2010 CAGR: 22% 2005 –
2010 CAGR: 26%
Adjusted net income excludes business integration and relocation-related charges as well as amortization of acquired intellectual
property and equity-based compensation (SFAS 123R)
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Sample & Assay Technologies
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Healthy financial position
As of Sept 30, 2011
Group liquidity (In $ millions) 486
Net debt (In $ millions) -336
Shareholder equity ratio 65%
Net debt / adjusted EBITDA ratio 0.9
Healthy financial position supporting business expansion
Leverage ratio: Net debt / EBITDA
Cash flow (In $ millions) Q3 2011 9M 2011
Net operating cash flow 59 165
Purchases of property, plant and equipment -17 -56
Free cash flow 42 109
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For further information on adjustments, please refer to the reconciliation tables in QIAGEN's
Q3 2011 earnings release or appendices
0.00.2
3.3
2.2
0.4
0.1
0.9
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2005 2006 2007 2008 2009 2010 20119M
Digene
acquisition
Cellestis
and Ipsogen
acquisitions
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Sample & Assay Technologies
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Sustainable sales expansion
2012: Improving CER growth vs. 2011
2013 onwards: Return to faster growth
Margin improvement
New projects to unlock efficiency gains
End-2013 target: ≥
31% adjusted operating margin
Taxes and capital allocation
Further tax rate reductions
Capital allocation measures –
including share repurchase program –
under review
Focus on delivering shareholder returns
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1
2
3
CER –
Constant exchange rates
Focus on maximizing bottom-line growth and delivering shareholder returns
Drive adjusted EPS
growth
Sample & Assay Technologies
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Track record of growth and innovation
Robust development pipeline
Strong free cash flow
World leader in Sample & Assay Technologies
Driving the dissemination of molecular testing
Key considerations: Strong growth potential
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Attractive and growing markets
Building leadership in Molecular Diagnostics
Highly competitive offering in Academia, Pharma
and Applied Testing
Capitalizing on diverse growth opportunities
Pioneer in Personalized Healthcare
Expansion into high-growth markets
Sample & Assay Technologies
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Thank you!
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