QIAGEN (QGEN) to Boost NeuMoDx Production With US DOD Contract
QIAGEN's (QGEN) NeuMoDx platforms offer a unique combination of speed, flexibility, throughput and ease of use for molecular diagnostics testing, including laboratory-developed tests.
QIAGEN N.V. QGEN recently announced the receipt of the U.S. Department of Defense (DOD) contract to increase the production capacity for consumables used on its NeuMoDx 96 and 288 integrated PCR testing systems. As the COVID-19 pandemic continues, the receipt of the U.S government contract marks an important step to support laboratory testing.
The NeuMoDx platforms provide a unique combination of speed, flexibility, throughput and ease of use for molecular diagnostics testing, including laboratory-developed tests.
The recent development will likely expand QIAGEN’s PCR testing capacity, thus boosting its Molecular Diagnostics business.
More on the Contract
On behalf of and in coordination with the Department of Health and Human Services (HHS), the U.S. DOD awarded QIAGEN a $3.4-million contract to boost production capacity for COVID-19 tests running on NeuMoDx instruments at QIAGEN site in Ann Arbor, Michigan. Further, QIAGEN plans to ramp up production to more than 16 million tests per year, up from the present level of nearly 10 million by the end of March 2022.
The recently awarded contract follows an approximately $600,000 contract awarded by DOD and HHS to QIAGEN in August 2021 to expand production capacity for chemical reagents at QIAGEN's site in Beverly, MA. The QIAGEN site at Beverly is the hub of the company’s reagent manufacturing for other Original Equipment Makers (OEMs) in the molecular testing market, including COVID-19 tests.
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Significance of the Contract
Per QIAGEN’s management, the U.S. government DOD contracts and capacity expansions are a testament to the vital role of PCR testing in the battle against COVID-19 and their increasing value to enhance patient outcomes. QIAGEN is escalating its flexible production capabilities to ensure the availability of PCR testing solutions for COVID-19 and other diseases where they are required most.
Per a report by Grand View Research, the global PCR market size was valued at $4.5 billion in 2019 and is expected to reach $16.2 billion by 2027, at a CAGR of 17.5%.
Considering the market growth, the recent contract gained by QIAGEN to enhance PCR testing comes at an opportune time.
Growth in PCR Testing Solutions
During the second-quarter earnings update, QIAGEN noted that despite reduced demand for COVID-19 testing, the QIAstat-Dx and NeuMoDx solutions registered higher sales than the second quarter of 2020. The global rollout of the QIAcuity digital PCR instruments gained momentum and witnessed impressive sales growth sequentially. QIAGEN’s QuantiFERON-TB sales improved 109% at CER in the second quarter led by strong demand in the United States. Sales of QIAstat-Dx and NeuMoDx solutions remained high as well.
In July 2021, QIAGEN received CE-IVD certification for its NeuMoDx HAdV Quant Assay for the European Union and countries that accept this marking to identify and quantify human adenovirus (HAdV) DNA. By securing this certification, QIAGEN drove the deployment of non-COVID-19 tests in the United States, Europe and other markets.
Over the past six months, shares of the company have gained 1.3% against the industry’s fall of 2.9%.
Zacks Rank and Key Picks
Currently, QIAGEN carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the broader medical space are Alcon Inc ALC, McKesson Corporation MCK and Biolase, Inc. BIOL, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.
Alcon has an estimated long-term earnings growth rate of 18%.
McKesson has an estimated long-term earnings growth rate of 8%.
Biolase has a projected long-term earnings growth rate of 15%.
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