In 2015, QIAGEN announced the official launch of the commercialization of the fully automated next-generation sequencing platform GeneReader NGS System, and launched the first complete next-generation sequencing (NGS) automation platform from sample preparation to data interpretation to accommodate  needs of different laboratories. Recently, QIAGEN announced that it had stopped the development of its next-generation sequencing platform GeneReader and established a long-term cooperation with illumina to develop next-generation sequencing IVD detection products.

On October 7, local time, QIAGEN announced a new direction for its NGS-related business: to establish a 15-year partnership with illumina to further expand the IVD test kit based on NGS technology in patient management (including concomitant diagnosis) application. At the same time, QIAGEN also lowered the company's third-quarter sales growth forecast, and announced that its CEO Peer Schatz will leave after 27 years of service and switch to the company's special consultant position.

Under the terms of this latest non-exclusive agreement, QIAGEN will have the right to develop and commercialize IVD kits for illumina's MiSeq Dx and NextSeq 550Dx systems. The agreement also granted QIAGEN the right to expand cooperation on illumina's future clinical diagnostic system. The partnership will also provide opportunities for QIAGEN to develop and promote illumina-based TruSight Oncology analysis methods in the future. Based on this cooperation, the two parties will first focus on tumor-related IVD kits to the market to support patient management. In the future, the cooperation may expand to more clinical diagnostic fields, such as cardiology, genetic diseases, infectious diseases, and inflammation and autoimmune diseases.

Francis deSouza, CEO of illumina, said: "We are committed to increasing clinical use cases resolved through genome sequencing to enable partners to provide IVD testing and concomitant diagnosis on illumina's Dx instruments. Our cooperation with QIAGEN will provide illumina's TSO 500 series provides more detection menu options, thereby accelerating the application of NGS in the management of cancer patients. "

"Our strong cooperation is an important milestone, marking the advancement of the use of NGS technology in clinical decision-making and our shared vision to use this powerful technology to improve the clinical outcomes of patients worldwide," QIAGEN CEO Peer Schatz say. "QIAGEN is very pleased with this groundbreaking partnership and hopes that this relationship can leverage our unique strengths and develop into a long-term and productive partnership. This partnership is a key step in our NGS strategy. The strategy will continue to include universal solutions for any sequencer, as well as the GeneReader NGS system, which is mainly suitable for smaller targeted gene kits. Through this partnership, we look forward to creating significant benefits for customers and both parties and letting QIAGEN to maximize the opportunities for us to create value as a company by providing solutions from sample preparation to data interpretation. "

Although the parties did not disclose the financial terms of the agreement, Tycho Peterson, an analyst from JPMorgan Chase, said in an analysis report that QIAGEN may pay illumina a platform access fee and achieve certain development, regulatory and commercialization milestones related payments. In addition, as part of restructuring of QIAGEN , the company will bear pre-tax restructuring costs of approximately US $ 260 million to US $ 265 million. About 75% of it, namely US $ 195 million to US $ 200 million, will be used to terminate non-cash projects related to NGS instrument development activities. According to QIAGEN, these are related to "software and tool development, licensing, partner company valuation, and other asset impairments."

In addition, it is unclear what impact the termination of GeneReader system development will have on the agreement between QIAGEN and Natera in 2018 to develop cfDNA prenatal screening methods based on GeneReader, but QIAGEN said it would discuss with Natera "how to continue relationship". QIAGEN company spokesman Thomas Theuringer also said that due to the stop of GeneReader system development, the number of layoffs has not been made public, although the company plans to create new job opportunities in other fields. But all locations involved in the development of NGS instruments will be affected, including QIAGEN ’s German headquarters and R & D center in Massachusetts.

In 2012, QIAGEN mastered the basic technology of its fully automated next-generation sequencing system GeneReader by acquiring Intelligent Biosystems (IBS). Since the instrument was released in 2015,QIAGEN has been committed to promoting and selling GeneReade. But the commercialization of the system is not going well. Illumina sued QIAGEN in 2016, claiming that the system violated its intellectual property rights. The lawsuit resulted in a US ban, which in turn stopped QIAGEN from selling all GeneReader systems in the United States. The lawsuit was settled in 2017, and QIAGEN used a new chemical to resume sales of GeneReader in the United States. For the Chinese market, in 2017, QIAGEN also co-founded a joint venture company,MAQGEN, with China ’s IVD industry leader Maccura Biology, to help introduce the GeneReader NGS system to the Chinese clinical and scientific research market, and to help realize the localization of QIAGEN gene sequencing products in China Change. So far, the adoption rate of the product is still low, with revenues in 2018 of no more than US $ 10 million to US $ 15 million. As early as July, QIAGEN announced that it would reorganize its Chinese joint venture because China's adoption of in vitro diagnostic technology was lower than expected. Some analysts said after the agreement was released that it may be a wise decision to suspend the development of GeneReader.

Jonathan Arnold, vice president and head of oncology and precision diagnosis of QIAGEN, said after the latest agreement was announced that the company will continue to provide "indefinite" support for current GeneReader customers, and the company will still sell the instrument. He also mentioned that GeneReader has created a good market for proprietary needs. "The continuing need for targeted sequencing still exists, so we still think it's very important to support our customers and the platform." But he added, "This platform is a RUO system and will never become an IVD system."

For future cooperation with illumina, QIAGEN spokesman Thomas Theuringer said that the release time of the new NGS Panel will depend on the regulatory approval process, but the first batch of products may be put on the market in 2022 or 2023. In addition, this partnership will bring illumina access to routine diagnostic laboratories and contribute to QIAGEN’s front-end sample preparation technology and back-end bioinformatics expertise, which will greatly benefit illumina and will further strengthen the leading position of illumina  in the field of next-generation sequencing. According to Thomas Theuringer, QIAGEN ’s current primary goal is to develop testing products for its pharmaceutical company partners and envision two types of pharmaceutical trading projects: one is to customize NGS Panel for specific clinical projects; the other is The project is a comprehensive cancer comprehensive analysis, "This will begin to move towards what I think is a general-purpose companion diagnostic method." It is reported that QIAGEN has started a dialogue with potential pharmaceutical partners on NGS detection methods.

In the long run, reducing the loss of its GeneReader and turning to higher-growth technology should help QIAGEN, but it may be difficult to control in the near future. The company's third-quarter sales increased by 3% and failed to meet its 4% to 5% growth target. The company blamed the decline on China's slowdown in growth. But the company said that its overall revenue will be within expectations.

At the same time as business restructuring in the NGS field,QIAGEN also plans to reallocate some resources. For example, the company plans to expand its activities in the QIAGEN business service centers in Poland and the Philippines. Thomas Theuringer said: "Our business is very concentrated. Now, we are working hard to move the operation closer to the business in response to our customers." Therefore, he added that the entire resource will be renewed globally distribution.

Reference materials:

1、QIAGEN Partners With Illumina on NGS IVD Kits; CEO Departing; Preliminary Q3 Revenue Growth Lowered

2、QIAGEN Nixes Sequencer Development, Sees New NGS Opportunities With Illumina Deal

3、Illumina and QIAGEN Partner to Deliver Sequencing-Based In-Vitro Diagnostic (IVD) Tests

Link: https://www.sohu.com/a/346142578_733985