| BUSINESSWEEK ONLINE : JULY 17, 2000 ISSUE | ||||||||
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| INTERNATIONAL -- EUROPEAN BUSINESS
"The Post-Its of the Biotech Industry" (int'l edition) Qiagen's products are ubiquitous--and its stock is red-hot Unlike other biotech pioneers, Qiagen co-founder and Chief Executive Metin Colpan has no aspirations to cure cancer, Alzheimer's disease, or any of the other ills that plague humankind. Not even the common cold is on his radar screen. ''You're never going to hear that we are coming out with the next big drug,'' says Colpan, a 45-year-old biochemist from Qiagen's German headquarters in the town of Hilden, near Dusseldorf. Fair enough. But whatever the next blockbuster is, there's a good chance Qiagen will have a part in it. While the company doesn't make drugs, it's the market leader in producing the tools scientists need to analyze and modify genetic information. Says HypoVereinsbank analyst Christiane Dienhart: ''This is a company that's not going away.'' MONICA'S DRESS. That's for sure. Qiagen's kits for extracting and purifying nucleic acids like DNA are standard in every branch of the biotech market, from university research to genomics, gene therapy, and diagnostics. At $250 each, they are also standard gear in crime labs all over the world: essential, for instance, in tracing the DNA of everything from the infamous spot on Monica Lewinsky's dress to the blood in the driveway of O.J. Simpson's murdered ex-wife. ''We're the Post-Its of the biotech industry,'' says Chief Financial Officer Peer M. Schatz. Some Post-It. With a gross profit margin of 70%, Qiagen's core DNA-extraction business is a cash cow. Sales grew 31% last year, to $144 million; operating profit rose 45%, to $21 million. And new frontiers beckon. Now that scientists have succeeded in unraveling the human genome, or genetic code, the race to develop a new breed of gene-based drugs is certain to accelerate. Qiagen expects the $900 million market for genetics-related research to grow by 15% annually for the next several years. Qiagen has an aggressive acquisition strategy in areas, such as genomics, that are beginning to find commercial applications. In its biggest move, the company snapped up California's Operon Technologies Inc. on June 12 for $110 million in stock. Operon makes synthetic DNA and genes to develop and test new drugs. In January, Qiagen bought Seattle's Rapigene Inc., a specialist in the detection of genetic variations. TREND SPOTTING. Qiagen's close ties with more than 150,000 customers are a major plus. With access to company labs, it can anticipate trends. In 1991, for instance, when a California scientist needed large quantities of DNA, Qiagen filled the order and got an early start in developing products for gene therapy, now a hot area of medical research. Such prescient thinking--not to mention the fact that Qiagen is seven times larger than all of its competitors combined--has helped boost its shares more than 400% in the past year. Qiagen's market cap is now a stunning $6 billion. That's greater than such DAX stalwarts as drugmaker Schering and health-care group Fresenius Medical Care. Indeed, with a price-earnings ratio of 295, the stock's performance looks more than a little puffy, however solid the underlying business. Success didn't come easily. Qiagen nearly went bust in 1987, three years after it was founded. Back then, the company was spread from agricultural to veterinary research. Focus came in 1993, Colpan says, when he hired Schatz, a U.S.-trained Austrian. The two decided to concentrate on the genetic-based research market, which Colpan is certain will sustain growth. Such confidence seems embedded in Colpan's DNA. Born in Turkey, he arrived in Germany at 6, when his parents emigrated as ''guest workers.'' The experience, he maintains, taught him to adapt quickly to new circumstances. ''I have no problem orienting myself to foreign surroundings,'' he says. In an industry evolving by the day, that's a talent he couldn't do without. By Matt Karnitschnig in Hilden _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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