Stock to watch: Qiagen NV (NYSE: QGEN)

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Qiagen NV (NYSE: QGEN) stock plunged 16.3% last week  (Oct 7th-11th, 2019; Finviz) after Deutsche Bank downgraded the company to Hold rating from Buy. On a preliminary basis, the quarter sales growth for QGEN will be about 3% on a constant exchange rate basis compared to the guidance of 4 – 5%, on the back of significantly weaker-than-expected developments in China. Total sales growth was about 6% CER excluding China sales. QGEN projects the adjusted EPS to be within its outlook for approximately $0.35-0.36 CER. Further, QIAGEN plans to make a pre-tax restructuring charge of about $260-265 million (or about $1.14-1.15 per share after taxes), and predominantly in results for the third quarter of 2019. This charge will comprise of approximately $195-200 million of non-cash items that are mainly related to the decision on NGS instrument development activities and comprised of charges for the impairment of software and instrument development, licenses, partnership valuations and other assets. QGEN is expecting robust growth in the QuantiFERON latent TB test mainly in line with the targets along with solid trends in the United States.

Moreover, QGEN has also announced a new strategic collaboration with Illumina Inc. to advance the use of NGS technologies in clinical decision-making. For this the company has made a new orientation for its NGS-related activities that involves focusing development activities on this collaboration along with expanding its offering of universal NGS consumables solutions for use with any sequencer. The company plans to continue supporting customers of the GeneReader NGS System, which is a complete Sample to Insight system for the processing of smaller targeted gene panels, but has now decided to suspend ongoing NGS-related instrument development activities. In addition, the company is implementing initiatives, which are to be completed by the end of 2019, that will comprise of shifting its Global Operations organization to a regional manufacturing structure and to expand the scope of activities at QIAGEN Business Services (QBS) centers in Wroclaw, Poland, and Manila, Philippines.

Additionally, Peer M. Schatz, Chief Executive Officer, will step down as Chief Executive Officer and Chairman of the Management Board. He will remain with the company as Special Advisor to the Supervisory Board and transition into this role in the coming weeks. The Supervisory Board has now started a search for a permanent CEO. In the meantime, Thierry Bernard, Senior Vice President, Head of Molecular Diagnostics Business Area, is now acting as an interim CEO and work in tandem with Roland Sackers, Chief Financial Officer.

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