Forward Looking Statements - Sample to Insight - QIAGEN · · 2013-04-26UBS Global Life Sciences Conference, September ... W W W . Q I A G E N . C O M QIAGEN’s Mission QIAGEN

W W W . Q I A G E N . C O MUBS Global Life Sciences Conference, September 23, 2003, New York Slide: 1

Peer M. Schatz

Managing Director and CFO

UBS Global Life Sciences Conference

September 23, 2003, New York


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 and markets and operating results are forward-looking, such

statements are based on current expectations 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), variability of operating results,

the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets,

as well as the nucleic acid-based molecular diagnostics and genetic vaccination and gene therapy

markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's

products (including seasonal fluctuations), 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 its products from competitors, and the integration of acquisitions of

technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has

filed with the U.S. Securities and Exchange Commission (SEC).

Forward Looking Statements


QIAGEN’s Mission

QIAGEN

is the world´s leading provider of

innovative enabling technologies

for the separation,

purification and handling of

DNA and RNA.


Revenues: 2002: $ 298.6 million 96–02 CAGR: 33%Net income: 2002: $ 33.3* million 96–02 CAGR: 36%*EPS: 2002: $ 0.23* 96–02 CAGR: 34%*

Product range: • Approx. 320 consumable products• Instrumentation• Increased range of in-licensed technologies

IP: • 246 issued patents, 201 pending patents• Over 400 patents under license

Customers: 400,000 scientists worldwide

* excluding one-time charges related to the acquisition of GenoVision A.S. as well as

restructuring charges related to the closing of QIAGEN Genomics, Inc.)

QIAGEN at a Glance


Academic and Industrial Research Market

Genomics & Drug Development

MolecularDiagnostics

Gene Therapy

QIAGEN’s Customers


QIAGEN Products


BacteriaCellsTissue Blood

Roche BiochemicalsLife Technologies/InvitrogenAmersham PharmaciaSigmaPromegaNew England BiolabsBD ClontechApplied Biosystems

Applied BiosystemsMolecular DynamicsMolecular DevicesAffymetrix

Biologicalsample

DNA/RNApreparation

BioassayDetection

Building Blocks of Life Science Applications


DNA

DNA

DNARNA

DNARNA

DNA

RNA

DNARNA

Extraction of Nucleic Acids


Bio

log

ica

lsa

mp

les

Nucleic Acids/Genetic Information Format

Assays/Application

Bacteria

Tissue

Blood

gD

NA

SequencingSNP-Genotyping

Microarrays

tRN

A

pD

NA

Vir

al

RN

A

mR

NA

mt

DN

A

Oth

ers

Expression Profiling

Plants

Animal

Viruses

Others (Cloning, PCR...)

QIAGEN Product Dimensions


• Solid-phase anion-exchange chromatography

• Selective adsorption on silica surfaces

• Filtration

• Magnetic bead technology

• Thin membrane technology

• Hybrid capture on latex beads

• Endotoxin removal

• Cationic detergent technology

• Dendrimer technology for transfection

• Over 240 issued patents, over 240 pending applications

• Over 400 patents under license

QIAGEN Technologies


Labor

QIAGENproducts

Labor

Off-the-ShelfChemicals

Traditionalmethods

QIAGENsolutions

Purification Achieved at Low Relative Cost


Ma

rke

t sh

are

100%

TraditionalMethods

Competitors

QIAGEN is Substituting Traditional Methods


Traditional method QIAGEN

Time 24–48 hours 20 –25 minutes

Purity Low High

Ease of use — +

Nontoxic reagents — +

Automation possible — +

Scaleup possible — +

The QIAGEN Solution


QIAGEN

Traditional methods

Ra

ng

e o

f a

pp

licatio

n

Customer benefit

Commercial Competitors

Competitive Environment


samples (autom.) 1 6 48 96 (>20,000)

EasyOne

$28,000

BR M48 - M96BR 3000

$40,000-80,000

BR 8000 and UHT systems$70,000 and up

ConsumablesConsumables

samples (manual) 1 6 48 96

BioRobot Productline


ManualUsers 99%

Instrument Users 1%


Low Throughput DiagnosticsEasyOne BioRobot MDx

Growth Areas in Instrumentation


75%

11%10%

Consumables• 23% growth YoY• NIH improved again

Instruments

Synthetic Nucleic Acids• Synthetic RNA increasingly attractive• Synthetic DNA achieved profitability

4%Others

(Q2 2003)

QIAGEN‘s Product Breakdown - Worldwide


QIAGEN‘s Consumables Business

0

20

40

60

80

100

Q2 2002 Q2 2003

Others

Synthetic NA

Instruments

Consumables

Net

Sale

sU

S$

mill

ions

+23%

Consumables ConsumablesConsumables


Period

Gro

wth

vs

pri

or

ye

ar

calculated under actual currency rates

Synthetic DNA business achievedprofitability

Growth in QIAGEN‘s Product Lines

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Q1

2001

Q2

2001

Q3

2001

Q4

2001

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Consumables

Instruments

Synthetic NA


Organic revenue growth Q2 2003 at CER

-8

-6

-4

-2

0

2

4

6

8

10

PE A AM* BE M BR FS I* T Q

% r

evenue g

row

th

* Molecular Biology divisions Sources: reported financials

Revenue Growth Comparison in Life Sciences


US/

Can Ger UK F Nor CH Aus JP NL Italy

Total

Q2 03

Total

Q2 02 Growth

Production 135 265 45 30 475 565 -16%

R&D 23 202 12 26 263 239 10%

Sales 210 132 37 24 3 17 16 39 7 485 472 3%

Marketing 39 42 4 2 2 4 6 1 100 130 -23%

Admin 84 105 4 5 1 12 4 8 4 3 230 262 -12%

Total 491 746 45 31 18 104 20 83 4 11 1553 1668 -7%

Employees June 30, 2003


International Presence

L.A.

CanUK

DFCH

Aus

JMaryland

SFONL

I


Rapid Change of Market Dynamic


Entering the Next Stage: Functional Analysis

SamplePreparation

Sequencing+PCRCollection

Stabilization

SamplePreparation+ +

Functional Genomics“Understand the Function”

Discovery Genomics“Find the Gene”2001 2003 Future

Microarray (AFFX +33%)QPCR (ABI +21%)

GenotypingClinical

pDNAfrom

Bacteria

Low complexityLower value contribution of QIAGEN products

High complexityHigh value contribution fromQIAGEN products


Arrays

DetectionAssay

High Quality Samples lead to High Quality Results

PurificationCollectionStabilization

Microfluidics


DetectionAssayPurificationCollectionStabilization

... and others

... and othersPartner of

High Quality Samples lead to High Quality Results


siRNA is more than a RNA OligonucleotidesiRNA is an Integrated Application

• Exciting market with very high growth rates

• High margins

• Only four licensees worldwide

• QIAGEN with largest sales andmarketing force in siRNA

• QIAGEN has the complete portfolio with

QIAGEN transfection reagentsQIAGEN sample preparation productsQIAGEN qPCR reagents

QIAGEN pre-developed assays


siRNA

Transfectionreagent

silencing

Microarray

Quantitative RT PCR

–

A P G TTY

Protein Assay

RNAStabilizationExtractionPurification

+PCR

+Probes

siRNA is more than a RNA OligonucleotidesiRNA is an Integrated Application



Research Market

GeneTherapy

Genomics & Drug

DevelopmentClinical

Diagnostics

Research Market

GeneTherapy

Genomics & Drug

Development

Market Opportunities for QIAGEN


• DNA & RNA purification kitsTransfection reagentsPCR reagents & kitsBioRobot 3000/8000/9600& consumables

• Academic research labsBiotechnology companiesPharmaceutical companiesDiagnostic laboratories

Research

The Present: Research MarketResearch


Worldwide Life ScienceResearch Budgets

Worldwide Research budget : approx. US$ 100bn

50%

15%

35%Big Pharma

Academia

Biotech

Research


Academia (~45% of total Net Sales)• budgets released• return to normal (delays in 2001 and 2002 contribute to cautiousness)• outlook for QIAGEN’s focus areas for 2004 encouraging

Pharma (~25%)• budget increases projected by companies themselves is significant• spending still low but signs of acceleration• good outlook for 2004

Biotech (~10%)• comparable to Pharma

Diagnostics (~20%)• accelerating and rapid growth

Academia

Pharma

Biotech

Diagnostics

QIAGEN‘s Markets Entering the Next Stage:Functional Analysis

Research


NIH Budget Growth

Source: DB Securities Inc., July 2003

R&

Dspendin

gin

bill

ion

US

$

Gro

wth

in R

&D

sp

en

din

gin

%

Research

* excluding US$ 1.3 billion in one-time facility charges

*

0

5

10

15

20

25

30

1999 2000 2001 2002 2003 2004

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%NIH Budget $

NIH Budget Growth


Diabetes

InfectiousDiseases

Oncology

FunctionalGenomics

CNS

NIH Budget Allocation –Shift in LifeScience Research by Focussing on Specific Areas

DrugDiscovery

NCE

Sequencing

2002 2003

Bu

dg

et

in U

S$ Bioterrorism

DrugDiscovery

InfectiousDiseases

FunctionalGenomics

DiabetesCNS

Oncology

NCE

Sequencing

$

$

$

$$

$

$Bioterrorism

Research


R&D Spending in Top 9 U.S. Pharma

Source: DB Securities Inc., July 2003

R&

Dspendin

gin

bill

ion

US

$

Gro

wth

in R

&D

sp

en

din

gin

%

Research

0

5

10

15

20

25

30

35

1999 2000 2001 2002 2003 2004 2005

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%R&D $

R&D Growth


Labor

QIAGENproducts

Labor

Off-the-ShelfChemicals

Traditionalmethods

QIAGENsolutions

QIAGEN Technologies providecost reduction through:

• reduction of labor time• reduction of mistake costs

• standardised procedures• technology advantage

• ease of use

• highest efficiency with aportfolio addressing more than80 different applications

• automation solutions

QIAGEN reduces CostsResearch


time

assumed CAGRof overall market 10-15%

Assumed CAGR 15-25%

QIAGEN Share20%

Rapid growth expected for many years to comedue to substitution of a very large„Traditional Methods“ share

Traditional Methods

QIAGEN Opportunities in the Purification Market

Research



Research Market

GeneTherapy

Genomics & Drug

Development



a Leading Supplier to Molecular Diagnostics

• Clinical Laboratories

• Blood Banks

• Paternity testing services

• Clinical Research Laboratories

• Forensic and Identity

Laboratories

• Food & environment testing


Molecular Diagnostics:An Exciting Growth Driver

• Market volume: approx. $2.5 Billion (2003)

• Rapid growth

• More and more tests available for infectious diseases, oncology,genetic testing, HLA, identity testing

• Critical need for standardized preanalyticalsolutions includingsample collection, stabilization, purification and handling



• Standardized and proven solutions

• Strong product pipeline

• Unparalleled range of applications

• Extensive breadth of chemistriesand technologies

• Strong IP position

• Regulatory compliance

• Highly skilled R&D

• Sales & Marketing experience

• 10 years experience in MDx

• Very strong brand name in MDx

Proven Standards

QIAGEN’s Strength in Molecular Diagnostics



gD

NA

Infection (HIV, HCV, HBV, CT/NG etc.)

Plasma

DiagnosticTests

Collection/Stabilization

Purification

bact.

DN

A

Vir

al N

A

Swabs

Blood

QIAGENAddressing Today‘s Needs in MDx



DiagnosisPredisposition

(screening)Monitoring(follow-up)

Prevention MonitoringTherapy

Gene expression

Protein expression

Mutation analysis

Translocation

Geneticmarker

Tumor marker Enzymology

QIAGENAddressing Today‘s and Future Needs in MDx



gD

NA

tota

l R

NA

Bac

DN

A

Vir

al

RN

A

Vir

al

DN

A

mR

NA

Oth

ers

Infection (HIV, HCV, Bacterial etc.)

AssayDetection

Collection/Stabilization

Purification

Plasma

Culture

Blood

Others

Swabs

Tissue

Gene/Protein Expression ProfilingOncology, Predisposition Forensic, Identification

Others

QIAGENAddressing Today‘s and Future Needs in MDx



m U

S$

Source: Roche Diagnostics R&D Day, 2003

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2005 2013

Cancer, Metabolic diseases

Pharmacogenetic

Mono-genetic diseases

Forensic testing

HLA

Identity testing

Market Development in Molecular Diagnostics



Biologicalsample

DNA/RNApreparation

BiochemicalApplication

SampleCollection

DetectionAnalysis

PreAnalytiX

Integrated with Analytical Platforms

Direct Sales

Molecular Diagnostics



Biologicalsample

TaqPrepDNA/RNApreparation

DetectionAnalysis

TaqManPCR

Partnership between ROCHE Diagnosticsand QIAGEN



Nucleic Acids/Genetic Information Format

Bio

log

ica

lsa

mp

les

gD

NA

Oncology, Predisposition

Pre-natal, Others

Assays/Application

tRN

A

pD

NA

Vir

al

RN

A

mR

NA

mt

DN

A

Oth

ers

Gene/Protein Expression Profiling

Bacteria

Tissue

Blood

Others

Plasma

Viruses

Forensic, Identification

The PreAnalytiX Concept

Infection (HIV, HCV, Bacterial etc.)



PreAnalytiX‘s ObjectiveGold Standard for any Analytical Platform

DNAand/orRNA

AnalyticalPlatform

Roche/BM Abbott

Organon Chiron

Bayer Gen-Probe

BDGene etc.

PCR LCR TMAbDNA NASBA SDABiochip Southern

Doctors OfficeClinical

Laboratory

Sample Nucleic Acid Collection Stabilization

& Lysis

Nucleic Acid Isolation/Purification



PreAnalytiX



ClinicalDiagnostics

Research Market

GeneTherapy

Genomics & Drug

Development



•Industrial-Scale Products

•Other Services

•pAlliance: Valentis/DSM

Gene Therapy Products & Services GeneTherapy


Academic and Industrial Research Market

Genomics & Drug Development


Gene Therapy

QIAGEN’s Customers


In $ millions unless indicated Q2 2003 Q2 2002 Growth

Revenues 86.3 72.7 19%

EBIT margin (%) 20.0 13.0

EBIT margin (%) adj. 20.0 17.0*

Operating Income 17.3 9.4 85%

Operating Income, adj. 17.3 12.2* 42%

Net Income 11.1 4.6 143%

Net Income adj. 11.1 6.8* 64%

EPS in $ per share $ 0.08 $ 0.03 167%

EPS, adj., in $ per share $ 0.08 $ 0.05* 60%

WA Number of Shares 146.7 145.9

* excluding charges related to the acquisition of Genovision A.S

QIAGEN Second Quarter 2003


2003 2003 2002

Q2 Q2 Q2 Growth Rates

Reported

Constant

Currency Reported Reported

Constant

Currency

Total Revenues in USD 86.251.000 79.479.000 72.747.000 19% 9%

Consumables 75% 75% 72% 23% 13%

Instruments 10% 10% 11% 17% 6%

Oligos 11% 11% 12% 1% -5%

Other 4% 4% 5% -2% -8%

Total Revenues 100% 100% 100% 19% 9%

Gross Margin 65% 67% 67% 16% 10%

Income from operations 20% 23% 13% 85% 98%

Income from operations excl.

Acquisition costs and In-

process R&D 20% 23% 17% 42% 52%

Net income 13% 15% 6% 143% 152%

Net Income excl. Acquisition

costs and In-process R&D 13% 15% 9% 64% 70%

EPS in USD 0,08 0,08 0,03 167% 167%

EPS excl. Acquisition costs

and In-process R&D in USD 0,08 0,08 0,05 60% 60%

QIAGEN Q2 2003 – at Constant Currencies


In $ millions unless indicated 6M 2003 6M 2002 Growth

Revenues 165.8 143.3 16%

Operating Income 33.4 25.1 33%

Operating Income, adj. 35.0* 27.9** 25%

Net Income 22.1 14.1 57%

Net Income, adj. 21.6* 16.3** 33%

EPS, $ per share $ 0.15* $ 0.11** 36%

WA Number of Shares 146.4 145.6

Employees (number) 1,553 1,668 -7%

Cash, Marketable Securities 63.2 57.6

Net Debt 53.1 52.0 2%

* excluding costs related to the closure of QIAGEN Genomics, Inc.** excluding charges related to the acquisition of Genovision A.S.

QIAGEN First Half 2003


(Q2 2003)

Japan 11%

Europe 32%

Distributors + RoW 8%

North America49%

Geographic Distribution of Net Sales


Operating Margin Improvement over next Quarters

0

20

40

60

80

100

120

140

Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003

0%

5%

10%

15%

20%

25% Fixed Cost

Revenues

Operatingmargin


• one core expertise – one core focus area

• 80% of QIAGEN‘s business is core (rest directly flanking businesses)

• highest market share in its core markets

• focus on market penetration - not on breadth of product offerings

• standing between the challange of raw sample and purified nucleic acids

while analytical tools change, this challenge always remains

• very strong in clinical diagnostic marketdifferent growth drivers than research market.

• large unconverted market still using traditional methods, e.g. phenol.

Substitution is primary target – market growth provides upside.

Key Investment Considerations

Forward Looking Statements - Sample to Insight - QIAGEN · · 2013-04-26UBS Global Life Sciences Conference, September ... W W W . Q I A G E N . C O M QIAGEN’s Mission QIAGEN

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