Peer M. Schatz Managing Director and CFO 6th German ......•Magnetic bead technology •Thin...

Peer M. Schatz

Managing Director and CFO

6th German Corporate Conference, Frankfurt, February 25, 2003

Peer M. Schatz

Managing Director and CFO

6th German Corporate Conference, Frankfurt, February 25, 2003

29-Jan-03

Forward Looking Statements

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'sproducts (including seasonal fluctuations), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of each 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).

29-Jan-03

QIAGEN’s Mission

QIAGEN QIAGEN

is the world´s leading provider of is the world´s leading provider of

innovative enabling technologies innovative enabling technologies

for the separation,for the separation,

purification and handling ofpurification and handling of

DNA and RNA.DNA and RNA.

29-Jan-03

QIAGEN at a Glance

Revenues: 2002: $ 298.6 million 96–02 CAGR: 33%Net income: 2002: $ 33.3* million 96–02 CAGR: 36%*EPS: 2002: $ 0.23* 96–02 CAGR: 34%*

Product range: • Approx. 320 consumable products• Instrumentation• Increased range of in-licensed technologies

IP: • 246 issued patents, 201 pending patents• Over 400 patents under license

Customers: 400,000 scientists worldwide

* excluding one-time charges related to the acquisition of GenoVision A.S. as well as restructuring charges related to the closing of QIAGEN Genomics, Inc.)

29-Jan-03

QIAGEN’s CustomersAcademic and Industrial Academic and Industrial

Research MarketResearch Market

GenomicsGenomics & Drug & Drug Development

Molecular Molecular DiagnosticsDevelopment Diagnostics

Gene TherapyGene Therapy

29-Jan-03

Building Blocks of Life Science Applications

BacteriaBacteriaCells Cells Tissue Tissue BloodBlood

Roche Roche BiochemicalsBiochemicalsLife TechnologiesLife Technologies//InvitrogenInvitrogenAmershamAmersham PharmaciaPharmaciaSigmaSigmaPromegaPromegaNew England New England BiolabsBiolabsBD BD ClontechClontechApplied Applied BiosystemsBiosystems

DNA/RNADNA/RNApreparationpreparation

BioassayBioassay

Applied Applied BiosystemsBiosystemsMolecular DynamicsMolecular DynamicsMolecular DevicesMolecular DevicesAffymetrixAffymetrix

DetectionDetection

BiologicalBiologicalsamplesample

29-Jan-03

Extraction of Nucleic Acids

29-Jan-03

QIAGEN Product DimensionsBi

olo

gic

al

Biolo

gic

al

sam

ple

ssa

mp

les

BacteriaBacteria

Tissue Tissue

BloodBlood

ggD

NA

DN

A

SequencingSequencingSNPSNP--GenotypingGenotyping

MicroarraysMicroarraysOthersOthers ((CloningCloning, PCR...), PCR...)

AssaysAssays//ApplicationApplication

tt RN

ARN

A

pD

NA

pD

NA

Vir

al R

NA

Vir

al R

NA

mRN

Am

RN

A

mt

mt D

NA

DN

A

Oth

ers

Oth

ers

Expression ProfilingExpression Profiling

VirusesViruses

AnimalAnimal

PlantsPlants

Nucleic Acids/Genetic Information FormatNucleic Acids/Genetic Information Format

29-Jan-03

QIAGEN Technologies

• Solid-phase anion-exchange chromatography• Selective adsorption on silica surfaces• Filtration• Magnetic bead technology• Thin membrane technology• Hybrid capture on latex beads• Endotoxin removal• Cationic detergent technology• Dendrimer technology for transfection

• Over 240 issued patents, over 240 pending applications• Over 400 patents under license

29-Jan-03

Purification Achieved at Low Relative Cost

LaborLabor

QIAGENQIAGENproductsproducts

LaborLabor

OffOff--thethe--ShelfShelfChemicalsChemicals

Traditionalmethods

QIAGENQIAGENsolutions

29-Jan-03

QIAGEN is substituting traditional methods

Competitors

Mar

ket s

hare

TraditionalMethods

100%

29-Jan-03

The QIAGEN Solution

Traditional method QIAGENQIAGEN

Time 24–48 hours 20 –25 minutes

Purity Low High

Ease of use — +

Nontoxic reagents — +

Automation possible — +

Scaleup possible — +

29-Jan-03

Competitive Environment

QIAGEN

Traditional methods

Traditional methods

Ran

ge

of

ap

plic

at

Commercial Competitors

ion

Customer benefit

29-Jan-03

Manual Users 99%

Instrument Users 1%

29-Jan-03

QIAGEN’s Instrumentation Business

QIAGEN BioRobots differ from other instrumentation businesses due to:

• Other than a generic instrument, a BioRobot is a closed,solution-specific instrument

• QIAGEN BioRobots are very focused on specific applications:separation, purification and handling nucleic acids

• QIAGEN BioRobots and QIAGEN consumablesare an inseparable unit

• QIAGEN BioRobots are essential for QIAGEN‘s strategy and allowQIAGEN to address some of the most exciting markets

• QIAGEN BioRobots show exciting growth rate with 34% Q4 over Q3

29-Jan-03

BioRobot Productline

BR M48 - M96BR 3000

$40,000-80,000

BR 8000 and UHT systems$70,000 and up

EasyOne

$28,000

# of samples 1 6 48 96 (>20,000)

ConsumablesConsumables

29-Jan-03

Easy 1 Integrated Preanalytical Solution

DetectionAssayPurification

29-Jan-03

BioRobot MDx

Purification

DetectionAssayCollectionStabilization

29-Jan-03

QIAGEN‘s product breakdown - worldwide

Consumables- robust growth- positive trends

Instruments- exceeded Q4 targets - 34% growth Q4/Q3

Synthetic Nucleic Acids- flat revenues- contribute loss- Synthetic RNA attractive

72%

13%11%4%Others

(2002)

29-Jan-03

QIAGEN Consumable Business:Continuous Strong Growth

Others

50

100

150

200

250

300

350

Worl

d-W

ide

Sale

sU

S$m

illio

n

+22%Consumables

Synthetic DNA

Instruments

Consumables

ConsumablesConsumables

0

2001 2002

29-Jan-03

QIAGEN Consumable Business:Continuous Strong Growth

Period

Gro

wth

vs p

rior

year

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002

ConsumablesInstrumentsSynthetic NA

29-Jan-03

Forward Looking Statements

2001 2002

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0% 20% 40% 60% 80% 100%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0% 20% 40% 60% 80% 100%

Gro

wth

in % Total Sales in % Total Sales

29-Jan-03

Employees December 31, 2002

US/ Total TotalCan Ger UK F Nor CH Aus JP NL Italy 2002 2001 Growth

305 49 28 526 410ProductionR&DSalesMarketingAdmin

14321

110321

28%-15%219 29 279 328

12 7 484 4442115792

13448

105

3744

2315

184

12

3969

9%-11%

1%1 123 138

4 4 3 239 237

Total 524 811 45 29 17 112 16 82 4 11 1651 1557 6%

29-Jan-03

International Presence

L.A.

CanUK

DFCH

Aus

JMaryland

SFONL

I

29-Jan-03

Rapid Change of Market Dynamics

2001 Discovery Genomics 2002 Functional Genomics

2086

_PC

R

29-Jan-03

Rapid Change of Market Dynamics

29-Jan-03

Entering the Next Stage: Functional Analysis

Discovery Genomics“Find the Gene”

Functional Genomics“Understand the Function”2001 Future 2002

pDNAfrom

Bacteria

Microarray (AFFX +33%)QPCR (ABI +21%)

GenotypingClinical

SamplePreparation$ 3.50

PCR

$ 2.00

CollectionStabilization$ 3.00

SamplePreparation

++ Sequencing +

$ 0.30 $ 8.50

29-Jan-03

Market Opportunities for QIAGEN

Microarray (AFFX +33%)QPCR (ABI +21%)

GenotypingClinical

29-Jan-03


Molecular Diagnostics

Research Market

GeneTherapy

Genomics & Drug

Development

29-Jan-03

Research

The Present: Research Market

• DNA & RNA purification kitsTransfection reagentsPCR reagents & kitsBioRobot 3000/8000/9600 & consumables

• Academic research labsBiotechnology companiesPharmaceutical companiesDiagnostic laboratories

31

29-Jan-03

Worldwide Life ScienceResearch Budgets

Research

Worldwide Research budget : approx. US$ 100bn

50%

15%

35%

Big Pharma

Academia

Biotech

29-Jan-03

Research Budget per Customer Segment

0

10

20

30

40

50

60

70

80

Academia Pharma Biotechnology

US$

bill

ion

29-Jan-03

Money flows …

Academic Markets (>50% of QIAGEN’s customer base)• QIAGEN further increased market and technology leadership

• shift from sequencing to functional genomics and proteomics

• increased variety of samples and more complex and sensitive detection and analysis technologies demand highly reproducible and integratedpurification solutions

29-Jan-03

NIH Budget

Risk is NOT a changing growth rate

• NIH focus on specific R&D areas which turn into QIAGEN‘s direction- systems biology- quantitative anaylsis of dynamic genome-wide expression patterns- analysis of complex molecular networks and their regulations- development of advanced research technologies- molecular libraries such as an RNAi library- understanding of specific diseases like Alzheimer, infectious diseasesat the level of genes, proteins and dynamic systems and

- improve the national clinical research infrastructure(eradication of inefficciencies in clinical trials system)

Risk is the NIH Grants Policy in times BEFORE offical approval

• most grants currently being awarded as „Noncompeting Continuation Awards“

- project specific period system of funding- only 70% of prior year budget available in cases of budget delays

29-Jan-03

Trends to watch in U.S. Research Grants

NIH Budget focussing on specific disease areas- Cancer Research- AIDS vaccines- Infectious Diseases- Vaccine development- Women‘s Health- Diabetes- Anthrax ResearchIncreased military spending- DARPA grants- Focussing on BiowarfareBioterrorism- Large budget increase for homeland security- Public health infrastructure, research

29-Jan-03

NIH Budget Allocation –Shift in LifeScience Research by Focussing on Specific Areas

Diabetes

InfectiousDiseases

Oncology

FunctionalGenomics

CNS

DrugDiscovery

NCE

Sequencing

Bioterrorism

Bud

get

in U

S$

DrugDiscovery

InfectiousDiseases

FunctionalGenomics

DiabetesCNS

Oncology

NCE

Sequencing

$

$

$

$$

$

$Bioterrorism

2002 2003

29-Jan-03

Money flows …Customers in Big Pharma (35% of QIAGEN’s customer base)

• QIAGEN further increased market and technology leadership

• Analysts’ estimates on 2003 R&D budget growth: 8%



• attach importance to reliability, reproducibility and ease of use of productsto avoid artefacts augmented use of established brands

0

10

20

30

40

50

60

70

80


US$

bill

ion

29-Jan-03

R&D Spending in U.S. PharmaR&

Dsp

end

ing

inb

illio

nU

S$ Gro

wth

in R

&D

spen

din

gin

%

0

5

10

15

20

25

1999 2000 2001 2002 2003 2004 20050

1

2

3

4

5

6

7

8

9

10R&D $R&D Growth

Source: DB Securities Inc., 2002

29-Jan-03

Money flows …

Biotech Markets (15% of QIAGEN’s customer base)

• 2003 estimated R&D budget growth of the Top 20 Biotech Companies: 16%



• attach importance to reliability, reproducibility and ease of use of productsto avoid artefacts augmented use of established brands

Top 10 Biotechnology Companiesrepresent approximately 45% of totalBiotech R&D Budget

0

10

20

30

40

50

60

70

80


US$

bill

ion

29-Jan-03

R&D Spending in Top 20 U.S. Biotech

CAGR 17.5

R&

Dsp

end

ing

inb

illio

nU

S$ Gro

wth

in R

&D

Spen

din

gin

%

0

1

2

3

4

5

6

7

1996 1997 1998 1999 2000 2001 2002 20030

5

10

15

20

25

30

35

40R&D $R&D Growth

Source: DB Securities Inc., 2002

29-Jan-03

QIAGEN reduces Costs

Labor

QIAGENproducts

Labor

Off-the-ShelfChemicals

Traditionalmethods

QIAGEN solutions

QIAGEN Technologies providecost reduction through:

• reduction of labor time• reduction of mistake costs

• standardised procedures• technology advantage

• ease of use

• highest efficiency with aportfolio addressing more than80 different applications

• automation solutions

29-Jan-03

QIAGEN Opportunities in thePurification Market

time

assumed CAGRof overall market 10-15%

Assumed CAGR 15-25%

QIAGEN Share20%

Rapid growth expected for many years to comedue to substitution of a very large„Traditional Methods“ share

Traditional Methods

Research

29-Jan-03



Research Market

GeneTherapy

Genomics & Drug

Development

29-Jan-03

MolecularDiagnostics

The Future: Molecular Diagnostics

• Human infectious diseases

• Forensic and Identity

• Genetic disease and markers

• Oncology

• Food & environment testing

29-Jan-03

a Leading Supplier to Molecular Diagnostics

• Clinical Laboratories

• Blood Banks

• Paternity testing services

• Clinical Research Laboratories

• Forensic and Identity

Laboratories

• Food & environment testing

29-Jan-03



BiochemicalBiochemicalApplicationApplication

DetectionDetectionAnalysisAnalysis


SampleSampleCollectionCollection


Direct Sales

Integrated with Analytical Platforms

PreAnalytiX

29-Jan-03

Partnership between ROCHE Diagnostics and QIAGEN


TaqPrepTaqPrepDNA/RNADNA/RNApreparationpreparation

DetectionDetectionAnalysisAnalysis

TaqManTaqManPCRPCR

29-Jan-03

QIAGENTargeting Laser Microdissection (LMD)

ClinicalDiagnostics

Development and co-Marketing agreement to give Leica LMD customers access to optimized DNA and RNA purification products for use with Leica‘s systems for LMD

Emerging and fast-growing markets for LMD include:

- Functional Genomics- Target Validation- Oncology Research- Molecular Diagnostics

29-Jan-03


The PreAnalytiX Concept

ggD

NA

DN

A

Oncology, Predisposition Oncology, Predisposition

Infection (HIV, HCV, Bacterial etcInfection (HIV, HCV, Bacterial etc.PrePre--natal, Others natal, Others

AssaysAssays//ApplicationApplication

tt RN

ARN

A

pD

NA

pD

NA

Vir

al R

NA

Vir

al R

NA

mRN

Am

RN

A

mt

mt D

NA

DN

A

Oth

ers

Oth

ers

Gene/Protein ExpressionGene/Protein Expression ProfilingProfiling

ForensicForensic,, IdentificationIdentification

Nucleic Acids/Genetic Information FormatNucleic Acids/Genetic Information Format

BacteriaBacteria

Tissue Tissue

BloodBlood

othersothers

PlasmaPlasma

VirusesViruses

Biolo

gic

al

Biolo

gic

al

sam

ple

ssa

mp

les

29-Jan-03


Stabilization


SampleSampleCollectionCollection


29-Jan-03

MolecularDiagnosticsPreAnalytiX’s Objective

Gold Standard for any Analytical Platform

DNAand/orRNA

PreAnalytiX

Sample Nucleic Acid Collection & Stabilization & Lysis

Nucleic Acid Isolation/Purification

PCR LCR TMAbDNA NASBA SDABiochip Southern

ClinicalLaboratoryDoctors Office

AnalyticalPlatform

Roche/BM ABBOTTOrganon ChironBayer Gen-ProbeBDGene etc.

29-Jan-03


PreAnalytiX

29-Jan-03



Research Market

GeneTherapy

Genomics & Drug

Development

29-Jan-03

GeneTherapyGene Therapy Products & Services

• Industrial-Scale Products

•Other Services

•pAlliance: Valentis/DSM

29-Jan-03

QIAGEN’s CustomersAcademic and Industrial Academic and Industrial

Research MarketResearch Market

GenomicsGenomics & Drug & Drug Development

Molecular Molecular DiagnosticsDevelopment Diagnostics

Gene TherapyGene Therapy

29-Jan-03

Geographic distribution of revenue growth 2001 to 2002

North America

10% Growth

EuropeAsiaOther

18 % Growth

29-Jan-03

Geographic distribution of net sales

(2002)

North America54%

Distributors + RoW 6%

Japan 12%

Europe 28%

29-Jan-03

QIAGEN Full Year 20022002 2001 Growth

Revenues ($ million) 298.6 263.8 13%Operating Income ($ million) 43.2 53.5 -19%

adjusted 56.8* 54.4† 4%Net Income ($ million) 23.1 34.4 -33%

adjusted 33.3* 33.9†† -2%*

EPS $ 0.16 / 0.23* $ 0.24 / 0.23††

unchanged*WA Number of Shares 145.9 145.1

Employees (approx.) 1,651 1,557 6%Cash, Marketable Securities($ million) 56.4 79.0

* excluding one-time charges related to the acquisitions of GenoVision AS as well as a chargerelated to the closing of QIAGEN Genomics, Inc.

† one-time charges related to the acquisition of the Sawady Group and†† excluding a gain on the sale of a financial asset

29-Jan-03

Currency Effects on Revenues and Expenses

0%

20%

40%

60%

80%

100%

Revenues COGS

JPY

EUR + GBPUSD + CAD

Other

29-Jan-03

Operating Margin improvement over next Quarters

0

20

40

60

80

100

120

140

Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 20030%

5%

10%

15%

20%

25% Fixed CostRevenuesOperating Margin

29-Jan-03

QIAGEN Guidance on 2003

Q1 2003 FY 2003

Revenues comparable to Q4 growth comparableto 2002

Operating Margin ~ 20% > 20%

Above guidance for 2003 is comparable to previous guidance.Above guidance does not reflect any improvement of markets compared to 2002 despite signs of this happening.

29-Jan-03

New production and office site in Hilden, Germany

Peer M. Schatz Managing Director and CFO 6th German ......•Magnetic bead technology •Thin...

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