Shares of Qiagen (NYSE: QGEN) this past week returned to trading in the $50 per-share range after three years mostly lumbering between the high $30s and mid $40s.
Investors flocked back to the stock after Bloomberg News reported that the provider of biotech workflow solutions was evaluating strategic options that include a potential sale—a report attributed to unnamed sources—amid fresh interest from would-be buyers in acquiring the company.
According to the report, Qiagen “has held talks with several possible buyers in recent weeks, including some U.S. strategics” or companies whose product portfolios make them a strategic fit with the potential takeover target. Qiagen is working with advisers as its supervisory board evaluates preliminary interest from potential suitors.
Qiagen has declined to comment on the Bloomberg report and similar reports from other news outlets.
“This potential sale does not come as a surprise to investors, as the company has long been viewed as a takeout candidate,” Casey Woodring, vice president, equity research focused on life science tools & diagnostics with J.P. Morgan, wrote in a research note.
That view, Woodring explained, has held among market-watchers at least since March 2020, when Thermo Fisher Scientific (NYSE: TMO) offered to acquire Qiagen for approximately $11.5 billion. Thermo Fisher’s deal for Qiagen was driven by the COVID-19 pandemic of the period, as the would-be buyer said its purpose in acquiring Qiagen was to expand its molecular diagnostics portfolio with a SARS-CoV-2 coronavirus test and other infectious disease tests.
Thermo Fisher terminated its buyout offer five months later when it failed to win support from two-thirds (66.67%) of investors, with only 47% of holders of outstanding Qiagen shares agreeing to tender their shares. Key to the deal falling through was vocal opposition from the hedge fund Davidson Kempner, an activist investor that raised its stake in Qiagen from 3.6% to 8%. The deal collapsed despite Thermo Fisher sweetening its offer to $12.5 billion by raising its per-share offering price from €39 ($45.75) to €43 ($50.45).
Through a spokesperson, Thermo Fisher declined to comment on its current interest in Qiagen.
Two years later, in 2022, The Wall Street Journal reported that Bio-Rad Laboratories (NYSE: BIO) was in talks with Qiagen on a merger deal valued at more than $10 billion, a deal that neither company confirmed at the time. A Bio-Rad spokesperson at deadline had not responded to a GEN query seeking comment on the company’s interest in Qiagen.
Favorable timing
“While the company [Qiagen] has not commented, the timing is favorable (following recent CEO exit), and we see potential strategic interest from several scaled tools companies given prior passes from TMO and BIO,” Tycho Peterson, a managing director focused on life science tools, diagnostics, and medical devices with Jefferies, wrote in a research note.
He did not identify the several scaled tools companies from which he sees interest in Qiagen, but did add: “Now more than ever, a deal makes sense, in our view.”
Perterson cited several reasons why. One is the CEO transition in progress, which he called “timely.” Another is Qiagen’s streamlining its offerings post-COVID-19 by ending sales of its NeuMoDx 96 and 288 Molecular Systems in 2024, citing changing post-COVID-19 customer needs for integrated PCR-based clinical molecular testing systems, as well as adopting its “five pillar” growth strategy.
During the recent J.P. Morgan 44th Annual Healthcare Conference, Qiagen restated its goal of generating at least $2 billion in combined annual sales by 2028 across its five growth pillars—sample technologies, QIAstat-Dx syndromic testing, QIAcuity digital PCR, QIAGEN Digital Insights (QDI) bioinformatics, and QuantiFERON for latent tuberculosis (TB) testing.
Headquartered in Venlo, the Netherlands, Qiagen is set to release Q4 and full-year 2025 results on February 4, with a conference call for analysts set for the following day.
After finishing 2024 with $83.591 million in net income (down 75.5% from $341.303 million a year earlier) on $1.978 billion on net sales (up 0.7% from $1.965 billion in 2023), the company is guiding investors to 2025 net sales growth of 4–5% at constant exchange rates (about 5–6% CER core sales after accounting for divestments). Qiagen has also raised its adjusted diluted EPS target to about $2.38 CER (previously about $2.35 CER).
Two other reasons why a Qiagen buyout makes sense now, Peterson added:
- Qiagen’s ratio of enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) is just 10x rather than 15x, as with most of the company’s peers in biotech instrument development.
- Qiagen’s portfolio of instrument offerings, from digital polymerase chain reaction (dPCR) to its latent TB test kits.
“Sum of the parts”
“Given idiosyncratic growth drivers, QGEN’s asset value may be best demonstrated as a sum of the parts,” Peterson wrote. “Using blended multiples from precedent transactions and public comps, we find support for a potential $13B+ deal or ~$60/share (16x EBITDA) although given that there are potentially multiple suitors (per Bloomberg), a takeout in the low- to mid-60s (17x EBITDA) s not off the table, in our view.”
According to Peterson, the potential $13 billion deal would break down as follows:
- Diagnostic Solutions (39% of deal value): Consisting primarily of QuantiFERON, a >$500 million franchise growing by double digits with a >70% market share in a $1.6 billionm total; addressable market that remains only 40% penetrated; and the fast growing QIAStat-Dx syndromic testing solution (30% sales growth during Q1–Q3 2025) with double-digit growth; $5 billion EV based on 5–6x sales.
- Sample Tech (30%): A $700 million franchise anchored by a dominant 60% share in DNA/RNA extraction across a >30,000-instrument installed base, characterized by high recurring revenues; $4 billion EV based on 15x EBITDA.
- Digital PCR (4%): QIAcuity, which generates more than $100 million in revenues but has grown by double digits to become the fastest-growing product in the digital PCR market despite the overall weak environment; $1 billion EV based on 13x sales.
- Software (6%): A more than $100 million franchise targeting mid-teens growth with a base of more than 90,000 users; $1 billion EV based on 9x sales.
- Other, including NGS consumables and PCR products (21%): Includes $450 million in sales outside the five-pillar growth strategy; $2 billion EV based on 12x EBITDA.
Woodring of J.P. Morgan commented that investor speculation about a Qiagen buyout has increased since November, when the company announced that Thierry Bernard, who has served as CEO and a managing director since 2020, will step down once a successor is appointed. Qiagen’s Supervisory Board has hired an executive search firm charged with identifying, evaluating, and appointing a successor from both internal and external candidates.
The takeover talk propelled Qiagen shares to their highest levels since February 2023. Qiagen shares jumped 17% Tuesday on news of the strategic options rethink, rising to $55.45 from $47.57 on January 16. From there, shares inched up 1% to $55.66 Wednesday, then slid 2.5% to $54.25 Thursday before finishing the week on Friday up 2.5% at $55.58, for a 15% one-week gain.
Because the surge caused Qiagen’s stock price to surpass its 12-month price target of $52, Deutsche Bank analyst Jan Koch downgraded the company’s shares from “Buy” to “Hold”. But Koch raised his firm’s price target on Qiagen shares by 4%, to $54.
By contrast, Qiagen shares had only risen 3.6% in the 12 months before the news report surfaced about the strategic options, and were actually down 1.5% over the six months pre-report.
This past week’s surge surpassed the one-day spike in Qiagen stock that saw its share close at $51.79 on July 25, three days after the company launched its QIAseq xHYB Long Read Panels, a suite of target enrichment solutions designed to enable long-read sequencing of genomically complex regions. The launch was intended to position Qiagen as a provider of solutions for next-generation sequencing (NGS) platforms applying long- as well as short-read technologies.
“Given the run in shares (+17% on 1/20), there is potential downside risk should a deal get dismissed,” Peterson added. “That said, absent a severe deterioration in fundamentals (our downside PT = $38), we think shares stay above the trailing six-month floor of $45/share, with little deal premium (in our view) embedded in the stock prior to this week.”
Leaders and laggards
- Coherus Oncology (NASDAQ: CHRS) shares jumped 30% from $1.59 to $2.06 Friday after Jay Olson, managing director and senior analyst covering biotechnology for Oppenheimer, initiated his firm’s coverage of the developer of next-generation combination cancer therapies with an “Outperform” rating and a 12-month price target of $10 a share. The positive rating comes more than two weeks after the company announced the publication of preclinical and clinical biomarker research in Molecular Cancer Therapeutics, describing the high selectivity, picomolar binding affinity, and significant effector-mediated killing of CCR8+ cells of tagmokitug. The anti-CCR8 monoclonal antibody is in Phase Ib/IIa trials in patients with solid tumors in combination with the Coherus-licensed, Junshi Biosciences-developed PD-1 inhibitor Loqtorzi® (toripalimab) and chemotherapy.
- Corvus Pharmaceuticals (NASDAQ: CRVS) shares nearly tripled, rocketing 166% from $8.05 to $21.41 Tuesday after the immune disease and cancer drug developer announced positive results from cohort 4 of a Phase I trial (NCT06345404) evaluating soquelitinib in patients with moderate to severe atopic dermatitis. Corvus said the cohort 4 data showed positive safety and efficacy results with 75% of soquelitinib patients achieving an Eczema Area and Severity Index (EASI) of 75, 25% achieving EASI 90, and 33% achieving Investigator Global Assessment 0 or 1. The results reflected additional clinical benefit seen following longer 56-day treatment vs. the 28-day treatment of patients in cohorts 1-3, Corvus said.
- IO Biotech (NASDAQ: IOBT) shares plunged 60% from 52 cents to 21 cents on Wednesday after the developer of immune-modulatory, off-the-shelf therapeutic cancer vaccines announced it intends to explore a range of strategic alternatives “to maximize stockholder value.” Those alternatives, IO said, include but are not limited to a merger, a business combination, a sale of assets or other strategic transaction, or a liquidation and dissolution. IO added that it is also weighing additional layoffs and “other efforts to significantly reduce the company’s operating expenses.” IO halved its workforce in September after the FDA advised the company to not submit a Biologics License Application for Cylembio® (imsapepimut and etimupepimut, adjuvanted) based on data from its Phase III IOB-013 trial (NCT05155254) that narrowly missed statistical significance despite showing that the cancer vaccine plus Merck & Co. (NYSE: MRK)’s Keytruda® (pembrolizumab) improved progression free survival.
- NovaBay Pharmaceuticals (NYSE American: NBY) shares plummeted 56% from $14.77 to $6.50 Tuesday, after the developer of eyecare, wound care, and skin care products disclosed in a regulatory filing that it agreed to sell up to $100 million worth of its common shares through an at-the-market sales agreement with broker-dealer Virtu Americas. NovaBay disclosed its ATM offering four days after saying it completed a private placement of pre-funded warrants to buy 837,696,130 common shares for $25 million cash, $51 million in stablecoins, and approximately $58 million in SKY tokens. “We intend to use the net proceeds from this offering for general corporate purposes, including but not limited to supporting a multi-year capital allocation strategy focused on acquiring and holding a portfolio of select digital assets that exhibit revenue-generating characteristics, consistent with our operating and risk framework, with SKY being the first approved asset to date,” NovaBay stated in its private placement Prospectus.
