Qiagen to reorganize around 15-year NGS partnership with Illumina as CEO quits

As part of its reallocation of resources, Qiagen said it plans to shift its global operations organization to a regional manufacturing structure by the end of this year. (Qiagen)

Illumina and Qiagen signed on to a long-term diagnostics partnership—with the latter opting to develop kits for the sequencing giant’s hardware, rather than continuing to develop its own instruments. The two companies plan to work together on a series of next-generation sequencing-based (NGS) tests in different therapeutic areas over the next 15 years.

The news comes as the Netherlands-based Qiagen announced that it missed its third-quarter revenue targets and that its long-time CEO, Peer Schatz, would step down as chief and chairman of the company’s management board.

Qiagen also said it plans to reprioritize and reallocate in order to “free up resources” to better focus on its new partnership, including suspending its in-house work on developing NGS-related hardware, though it will continue supporting customers of its GeneReader next-gen system.

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Going forward, the company “has established a new orientation for its NGS-related activities that involves focusing development activities on this collaboration as well as expanding its offering of universal NGS consumables solutions for use with any sequencer.”

Through the partnership, Qiagen will gain non-exclusive rights to design and commercialize in vitro diagnostic kits for use on Illumina’s MiSeq Dx and NextSeq 550Dx systems. Additionally, Qiagen will have the opportunity to develop companion diagnostic tests that evaluate tumors for potential immunotherapies based on Illumina’s TruSight Oncology assays.

Together, the two companies will work on validated workflows that combine their respective content and bioinformatics solutions, and the agreement includes the chance to be expanded, to include the development of future Illumina diagnostic systems.

“Bringing together our highly complementary capabilities marks an important milestone to advance the use of NGS technologies in clinical decision-making and our shared vision of using this powerful technology to improve the outcomes for patients worldwide,” Schatz said in a statement, calling the collaboration a cornerstone of the company’s strategy before the leadership transition was announced.

After 27 years with the company, Schatz will stay on as a special advisor during the transition—which will see Senior VP Thierry Bernard, head of Qiagen’s molecular diagnostics business, serve as interim CEO while a search is made for a permanent successor.

“It has been a tremendous privilege to serve as the CEO of Qiagen for such a long time,” Schatz said. “I am incredibly proud of the market and technology leadership that we have created and what our teams and partners have accomplished together. Qiagen has contributed to modern molecular biology in a way very few companies have had the honor to do.”

Schatz described the company’s realignment around the Illumina partnership as a “natural inflection point to bring in new leadership,” after joining the company in 1993 as one of its first employees.

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For the third quarter of 2019, Qiagen had sought between 4% and 5% net sales growth at constant exchange rates, but came in at “about 3%” due mainly to “significantly weaker-than-expected developments in China,” the company said. Excluding China sales, total growth was about 6%, in part from its QuantiFERON latent TB test.

As part of its reallocation of resources, Qiagen said it plans to shift its global operations organization to a regional manufacturing structure by the end of this year, and will expand the scope of activities performed at its business centers in Wroclaw, Poland, and Manila, Philippines. Qiagen’s share price on the New York Stock Exchange slid by at least 20% on the news.

“We continue to believe in our mid-term targets and for Qiagen to deliver accelerating growth in the coming years,” said CFO Roland Sackers. “Additionally, our broad strategic partnership with Illumina is set to revitalize our NGS strategy and offer highly attractive opportunities in clinical decision-making by leveraging our complementary strengths.”

The collaboration will start with a focus on oncology diagnostic kits for patient management, but may evolve to include clinical tests in cardiology and hereditary disorders, as well as infectious, inflammatory or autoimmune diseases.

“We are committed to expanding the range of clinical use cases addressed by genomic sequencing by enabling partners to deliver IVD tests and companion diagnostics on Illumina’s Dx instruments,” said Illumina CEO Francis deSouza.

RELATED: Qiagen launches one-stop antimicrobial resistance database alongside CDC commitment

Qiagen’s PCR and NGS-based test portfolio includes more than 25 collaboration agreements with pharma and biotech companies—with seven therapies receiving FDA co-approval alongside a Qiagen companion diagnostic, according to the company.

Alongside the rise of NGS-based tests in clinical practice, and the global reach of Illuimna’s sequencing platforms, the collaboration could provide both companies with a broad selection of tests in the in vitro diagnostic market.

Editor’s Note: This story has been updated with additional information from Qiagen.

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