As recently as the beginning of 2021, it was anyone’s guess how smoothly the COVID-19 vaccine rollout would go and how soon the world would be able to return to a sense of normalcy, with epidemiologists estimating that public health restrictions might begin to be lifted sometime in the fall.
Fast-forward half a year later, and, while the pandemic still rages on in some parts of the world, in the U.S. at least, more than half of eligible Americans are already fully vaccinated and daily case rates have largely dropped to early 2020 numbers. That’s good news for everyone—though it has sent a growing number of diagnostics developers scrambling to rewrite their financial predictions for the year.
Qiagen, for one, which received several emergency authorizations from the FDA for a handful of COVID tests, has had to make sizable cuts to its full-year sales forecast after clocking lower-than-expected numbers for its coronavirus-related offerings in the second quarter of the year.
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Though the Dutch company reported a 38% year-over-year increase in COVID product sales for the first half of 2021, in the second quarter alone, the segment registered a drop of 17% from the same period in 2020.
The $160 million garnered by Qiagen’s COVID sales during the quarter represent 28% of the company’s total sales—which added up to about $567 million for the three-month period—compared to the 32% share cornered by the segment for the entire first half of the year.
As a result, the diagnostics maker has put its yearly outlook on the chopping block. In comparison to an original prediction of about 18% to 20% sales growth for the whole year, Qiagen is now expecting to bring in a more modest 12% bump in year-over-year sales.
The company is also predicting that its sales in the next quarter will stay stagnant, with a plan to bring in approximately the same amount it did in the third quarter of 2020—about $483.8 million.
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The predicted double-digit annual growth is buoyed by solid gains in Qiagen’s non-COVID business. In a complete reversal of the progress of its COVID test sales, its other products registered a 33% sales increase for the first half and a jump of more than 50% in the second quarter alone, to $408 million.
Because of that, Qiagen reported an overall increase in year-over-year sales of 24% for the period—even with the nearly 20% drop in COVID-related earnings—leading the company to shift its focus back to non-COVID products as its “highest priority,” CEO Thierry Bernard said in a statement.
“We anticipate ongoing strong demand in these product groups in the second half of 2021, as we aim for at least 20% [constant exchange rate] growth for the full year and for these product groups to represent the majority of our sales,” Bernard said.
Qiagen’s non-COVID products include diagnostic test kits, precision medicine assessments, next-generation genomic sequencing technologies, clinical data analysis software and more.
In a display of confidence in its own ability to bounce back from the COVID testing slowdown, Qiagen also announced that it will buy back up to $100 million of its own shares, simultaneously increasing the value of investors’ current holdings and demonstrating the company’s willingness to invest in itself, according to Chief Financial Officer Roland Sackers.