QIAGEN N.V. QGEN recently collaborated with NeuMoDx Molecular, Inc. to market two new fully integrated systems for automation of PCR (polymerase chain reaction) testing. Furthermore, the companies are partnering to apply certain QIAGEN chemistries on the NeuMoDx systems.

QIAGEN currently owns about 19.9% of NeuMoDx’s shares. The companies have also entered into a merger agreement, under which on meeting certain regulatory and operational milestones, QIAGEN can buy all of the remaining shares of NeuMoDx at a fixed price of around $234 million.

QIAGEN will begin with distributing the NeuMoDx 288 (high-throughput version) and NeuMoDx 96 (mid-throughput version) in Europe and other major markets globally outside of the United States. On the other hand, NeuMoDx will market the systems in the United States directly. Thus, the addition of NeuMoDx systems equips QIAGEN with a comprehensive portfolio for molecular testing platforms and will help to boost the top line in the near term.

Market Potential

Per a report by MarketsandMarkets, the global next-generation sequencing (NGS) market is expected to reach a worth of $16.35 billion by 2024, at a CAGR of 19.2% between 2018 and 2024. In view of the data, we believe the latest development will help QIAGEN cash in on the bountiful opportunities in this niche space.

Solid NGS Platform Projections

QIAGEN has highlighted certain strategies to boost top-line contributions from the NGS portfolio to $140 million in 2018 from more than $115 million in 2017. Notably, this platform has been witnessing double-digit revenue growth over the past few quarters.

Management aims to expand the NGS platform by rapidly scaling-up the new Enterprise Genomics Services. It also plans to introduce the proprietary, new third-generation chemistry and a range of proprietary Digital NGS technology-based new gene panels within the GeneReader system. Per management, innovative GeneReader NGS chemistry is prepared for a launch and is based on proprietary formulations.

Also, the GeneRead QIAact Myeloid panel — a latest gene panel — is geared up for an early 2018 launch. Furthermore, upgraded versions of the GeneRead QIAact BRCA 1/2 gene panel and QIAact Actionable Insights Tumor Panel FPPE gene panel are in the cards. The upgrade will involve making complete use of QIAGEN’s proprietary Digital NGS technology with the addition of other relevant genes.

Share Price Performance

QIAGEN has been gaining investor confidence on consistently encouraging results. Over the past three months, the company’s share price has outperformed its industry. The stock has gained 16.8% against the industry’s 14.8% fall.

Zacks Rank and Key Picks

QIAGEN carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Intuitive Surgical ISRG, Amedisys, Inc. AMED and Masimo Corporation MASI.

Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Amedisys’ long-term expected earnings growth rate is 18.6%. The stock holds a Zacks Rank #1 at the moment.

Masimo’s long-term expected earnings growth rate is 14.8%. The stock holds a Zacks Rank #2 (Buy) at present.

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