While healthcare and biotech stocks, in general, have had a pretty interesting year so far, with 2020 promising to be even more exciting, there are some companies that have struggled to make something of themselves in 2019.
One of them is a $7.5 billion market cap company called Qiagen (NYSE: QGEN), which previously confirmed rumors that it would be considering a buyout offer back in November, an announcement which sent the stock up almost 50%.
Just recently, however, the company has since decided against this policy, an announcement that saw the company’s stock fall by 25%.
The medical diagnostic test maker issued a press release that confirmed they weren’t considering a buyout anymore. Back in November, Qiagen confirmed that it had several interested parties that were considering making an offer of some type or another. The company has, for the most part, struggled to make a profit.
Combined with other struggles, such as the sudden departure of its earlier CEO as well as problems in China, the idea that Qiagen is considering a buyout from not just one company, but potentially several, seemed like a dream come true for investors.
Unfortunately, the dream ended up being exactly that; a dream. It turns out not a single offer suggested to Qiagen’s management was sufficient to pique their interests. Even worse, now it seems that there aren’t any offers on the table anymore. Shareholders that had been hoping for a juicy buyout offer with a nice premium were undoubtedly disappointed, as many had been banking on the likely probability of a buyout offer going through.
“The Supervisory Board and Management Board conducted a wide-ranging review of strategic alternatives for our business and determined that the ongoing transformation provides the best means for creating future value for shareholders and other stakeholders,” said Håkan Björklund, Qiagen’s Chairman in an official press release right before Christmas. “We have a strong and differentiated portfolio of molecular testing solutions that provide opportunity for significant growth. We will continue to focus on value-enhancing activities with financial discipline and an increased passion to serve our customers with our Sample to Insight solutions focused on the Life Sciences and Molecular Diagnostics.”
In response to the news, shares of Qiagen tumbled by 25%, giving back almost all of the gains it had seen earlier in November. Wall Street analysts are divided on the stock right now, with the majority of the 30 or so analysts being neutral about the company. Specifically, 10 experts have a “hold” rating, while seven have a “buy” and 3 have an “underweight” rating. While Qiagen’s management seems optimistic that things will turn around, shareholders don’t seem convinced.
Qiagen Company Profile
Qiagen offers proprietary sample and assay technology to extract, purify, amplify, and interpret DNA, RNA, and proteins. The company’s sales are split almost evenly between applications in life sciences (51% of 2018 sales) and molecular diagnostics (49% of sales). Qiagen generates about 88% of its revenue from consumables and 12% from instrumentation and related services. The Americas account for the largest portion of the firm’s revenue (46%), followed by EMEA (33%) and Asia-Pacific (21%). – Warrior Trading News
