R&D budgets are on the up, predicts Qiagen CEO
sales and profits for the fourth quarter of 2003, providing another
indication that the pharmaceutical and biotechnology industry's
investment in R&D may be recovering.
The Netherlands-based company saw its turnover rise 21 per cent to $95.1 million (€75m) in the quarter, while operating income more than tripled to $16.2 million, albeit with a favourable impact of restructuring expenses in 2002 and 2003. Taking these expenses out of the equation, Qiagen still boosted its operating earnings by a third to $21.3 million.
Peer Schatz, Qiagen's chief executive, said that the firm was moving into 2004 "with a positive outlook as the preclinical and clinical research budgets in the biotechnology and the pharmaceutical industry are accelerating."
He noted that the revenue growth in the quarter was organic, and not driven by the company's acquisitions of Xeragon and GenoVision in 2002.
The core nucleic acid handling, separation and purification business saw sales rise 21 per cent due to strong demand in Europe and Japan, while Qiagen's newer activities in oligonucleotides - currently accounting for 15 per cent of total sales - put in a 42 per cent hike. The latter resulted from newly-introduced oligo sets for genome studies (AROS) and the small interfering RNA (siRNA) product line, acquired alongside Xeragon.
Indeed, the company's robust performance in the quarter was mainly due to strong sales of oligonucleotides, which realised turnover of $14 million during the period, compared to the expected $10 million, according to analysts at Lehman Brothers.
For the full-year, revenues came in at $351 million, up 18 per cent, , with operating income up 60 per cent to $68.9 million. And Schatz expects more growth in 2004, with sales in a range of $395 million to $403 million, and operating income of $90-$94 million.
"The pharmaceutical and biotech industries have come roaring back in the US," he told a conference call, adding that the biotech industry is projecting a 16.5 per cent rise in R&D spending this year, and the pharma industry 8.5 per cent.
He also noted that increased sales to academic laboratories, helped by hikes in public spending on science, would bolster sales in 2004.