Tuesday, May 31, 2005

Qiagen's Acquisition Of Artus

There's more consolidation in the life science supplier companies. Today, Qiagen announced that they were acquiring Artus for $39 million in cash. Artus is a leader in the molecular diagnostics arena, they are an OEM supplier to many of the big diagnostic firms such as Abbott. This acquisition is slightly dilutive to earnings in 2005 and $0.01 to 0.02 accretive to earnings in 2006. It's not a big acquisition, but it is a nice fit for Qiagen.
Posted by Hello
In case your wondering what Qiagen does... Well they manufacture these columns packed with a resin, which specifically binds to nucleic acids (DNA, RNA). If you perform any type of molecular diagnostic testing, you need to isolate DNA from the sample. You will use Qiagen's plasmid purification kits to perform this procedure.

Qiagen stock declined today, there's a lot of skeptical analyst out there. Anyways, here's a take from one analyst: Analyst Mike Booth at Canaccord Capital's London office reacted positively to the transaction and reiterated a "buy" recommendation on Qiagen, with a target price of 11 euros. "It appears to complement Qiagen's core expertise in sample preparation and handling, and it augments the company's ability to penetrate further into higher-margin businesses such as molecular diagnostics," he wrote in a research note. (BioWorld Today June 1, 2005)

Note: I have a position in Qiagen. I purchased this stock in 1996 as soon as it came public and have held on since. If you take a look at the charts, you will see that I've experienced the ups and the downs.


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