September 27, 2004 · W W W . Q I A G E N . C O M QIAGEN Acquires Key Assets of Molecular Staging,...

W W W . Q I A G E N . C O M

QIAGEN Acquires Key Assets of Molecular Staging, Inc.

September 27, 2004

W W W . Q I A G E N . C O MSlide: 2

September 27, 2004, 9:30 am EST, 14:30 GMT, 15:30 MET

Conference Call Outline:

1) 20 min PresentationPeer M. Schatz, CEORoland Sackers, CFODr. Solveigh Mähler, Director IR

2) 40 min Q&A sessionDue to time restrictions we would like to ask for a maximum of TWO questions per caller.

Welcome to QIAGEN‘sSecond Quarter and Half Year 2003 Conference Call Welcome to QIAGEN‘s Conference Call -QIAGEN Acquires Key Assets of Molecular Staging, Inc.


Certain of the statements contained in this presentation may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products and markets and operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related markets, as well as the nucleic acid-based molecular diagnostics and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's products (including seasonal fluctuations), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with the U.S. Securities and Exchange Commission (SEC).

Forward Looking Statements


QIAGEN is the market and technology leader in nucleic acid sample handling, separation and purification.

Our mission is to provide an outstanding contribution to our customers’ success by innovating and supplying our products and

services in all areas where they require this expertise.

Our products and technologies enable our customers to achieve breakthroughs in research and new standards in healthcare which

both contribute to improving lives.

By focusing on increasing our customers’ success, the exceptional talent and commitment of our employees bring excellence to all

segments of the value chain and outstanding success to QIAGEN.

Our Mission: Transaction Adds Technology in Core Focus Area


Transaction Rationales

• Highly core to QIAGEN:• Nucleic acid sample handling• Adding emerging and key segment to core

• Highly synergistic:• Same customer base• Same S&M approach• Overlapping applications• Same product formats• Huge patent estate: approx. 160 patents

• Accretive in 2005:• Adds $6 million in sales• Adds $1 million in net income• Adds strong basis for fast growth

• Fast integration planned – completed by the end of 2004


DNA Constraint is a Major Problem & Market Opportunity

• Increasing number of tests and analyses requires larger amounts of genomic DNA• Genome-wide SNP analyses• Sharing of clinical samples across disease panels / locations• Patient genotyping• Re-analysis at later time

• The amount of sample material is often constrained• Scarce or limited samples – tissue banks, plant and animal

collections, small needle biopsies, clinical trial samples• Pressure to make collection of sample less intrusive or simpler

(buccal swabs etc.) limits collected sample volume• Nanotechnologies and microfluidics put limitations on sample

volumes


“I want to have other labs run tests on this DNA sample”“I want to do more tests using this DNA”“The collection of these samples was very expensive”“We can’t go back to the patients to collect more samples”

Whole Genome Amplification

SOLUTION: WGA Eliminating Sample Limitations


ClinicalResearch Market

Molecular Diagnostics

Highly Synergistic: Same Customer Base

Genetic databasesClinical samples(e.g. small needle biopsies)DNA bankingVery small amount of starting materialPrecious samplesIrretrievable samplesGenome wide studies

Customers want MORE DNA out of LESS sample.


WGA – “Immortalization” of Sample DNA

Enough DNA foralmost unlimited number

of analyses and tests

Limited amount of sampleStored DNAPrecious sampleIrretrievable sampleClinical sample

Genetic fingerprintsSequencingSNP genotypingClinical studiesPatient genotyping....

WGA“Immortalization”


Adding a Solution for an Emerging Need in our Core Focus Area

Assay(e.g. PCR)WGACollection

Stabilization

“Unlimited” Number of AnalysesGenetic fingerprintingSequencingSNP genotypingClinical studiesPatient genotyping....

WGA“Immortalization”

Create more DNA in Sample

Very small amountsof sampleClinical samples(e.g. small needle biopsies)

Limited amountof samplePrecious and irretrievable samplesGenome wide studies

DetectPurification


QIAampDNeasy

Q-Genomic

minute

very small

small

medium

high

very small small medium high Very high

Amou

nt o

f Sta

rtin

g M

ater

ial

Number of Downstream Reactions Performed

Adding Emerging and Key Segment to Core

DNA Constraint(small and limited amount)

WGA


DNA Constraint Samples

Amount of DNA Needed for

pg ng µg mg

pg

ng

µg

mg

SNP GenotypingMulti PCRSingle PCR

Serum Plasma

LMD Tissue

FNA Biopsy

Whole Blood

Dried Blood

Buccal Swabs

Case WorkSamples

Highly Synergistic: Overlapping Applications

Amou

nt o

f DN

A Pr

ovid

ed b

y

DNA ConstraintImmortalization

(Have sample,but need more DNA

because I wantto run manyanalyses)

DNA Constraint Micro

(Have not much sample,Need more DNA to analyze Sample)


MDA Mix

Incubate100’s ug

DNA!

Published with validation in Genome Research 2003 (13) 954

Denature

Neutralize

10 ng gDNA0.5 µl BloodCytobrushBiopsyCell CultureGuthrie cards

Molecular Staging Single - TubeWhole Genome Amplification


Phi29-DNA Pol mediated SDA using random primersMDA is based on an Isothermal Enzymatic Reaction

single stranded genomic DNA

1. Phi29 Polymerase binds primer-template complexstarting DNA polymerization





2. Most DNA polymerases stop here being unableto displace newly replicated strand






3. Phi29 polymerase displaces newly replicatedDNA strand without loosing speed






3. Phi29 polymerase displaces newly replicatedDNA strand without loosing speed

4. More primers bind newly displaced strandsyielding exponential kinetics


Structure of RelationshipsQIAGEN owns Technology

PreviouslySale of Phi29 Enzyme

Limited License

RoyaltyStream

Scientific Partners

QIAGEN Sales Force

QIAGEN Manufacturing

QIAGEN Customer Base


Executive Summary

• Acquired the key assets of Molecular Staging, Inc.• MDA – the leading Whole Genome Amplification (WGA)

technology• Products and service business for nucleic acids• Prestigious customer base• Royalty stream from GEHB (Amersham)• Proteomics technology for all downstream applications

• Addressing the dynamic and core market ofDNA-constraint

• Highly synergistic to QIAGEN’s customer base with overlapping applications, same product formats and same S&M approach


Executive Summary

• $28.5 million in cash plus up to $6.75 million sales-milestones

• QIAGEN expects to incur one-time charges relating to this acquisition of approx. $2 million in Q3 2004

• Positive financial impact• Accretive to 2005 EPS and adds higher growth rate• Expected to add $6 million in sales and

$1 million in net income in 2005

• Integration into QIAGEN facilities and processes by end of 2004• Transfer of operations to Germantown, MD and Hilden, Germany

• Transfer of R&D to Hilden, Germany, further expansion planned

• Worldwide Technical Service in Valencia, CA and Hilden, Germany


Guidance

2005:Standard WGA and RCA-based products begin marketingSlightly Accretive to 2005 EPSAdds $6 million in sales and $1 million in net income

2006 and beyondCombinations with QIAGEN products and technologies begin marketingRapid growth in revenues and profitability

September 27, 2004 · W W W . Q I A G E N . C O M QIAGEN Acquires Key Assets of Molecular Staging,...

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