Roland Sackers - Qiagen · A Global Company Total Employees: 1599 Americas < 50% of Sales:...
Transcript of Roland Sackers - Qiagen · A Global Company Total Employees: 1599 Americas < 50% of Sales:...
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Roland SackersChief Financial Officer
Cheri WalkerVP M&A North America
Cowen & Co.
Boston, March 6, 2006
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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).
The following slides may contain certain summary information about QIAGEN N.V.’s operating income, net income, and earnings per share, which information is presented on a “non-GAAP financial measures”basis rather than in accordance with U.S. generally accepted accounting principles (“GAAP”). Please review QIAGEN’s recent press releases for information on the company’s operating income, net income, and earnings per share for specific periods presented on a GAAP basis. Such GAAP-basis information will also be contained in the company’s reports on Form 20-F and 6-K to be filed with or furnished to the U.S. Securities and Exchange Commission and which are available on QIAGEN’s homepage under www.QIAGEN.com.
Forward Looking Statements
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New developments in DNA forensicsApr 22nd 2004
CRAIG HARMAN was drunk when, in May 2003, he killed Michael Little by throwing a brick from a motorway overpass. He had neither motive nor connection to the victim, meaning that, under normal circumstances, his crime would have been almost impossible to solve…
QIAGEN Technologies Behind the Headlines
January 7, 2006
From Roger Boyesin Salzburg
DNA solves the 250-year mystery of Mozart's skullMUSEUM staff in Salzburg refused for years to go near the case displaying the skull that had reputedly housed the brain of Wolfgang Amadeus Mozart.
GERM SENSORS
Money & Investing
By Peter Kang
02.13.06 Bird flu and bioterrorism threats are creating healthy opportunities for outfits that sniff out lethal bugs.
PRIVACY MATTERS By Jane Black
JUNE 26, 2003
Whose DNA Is It Anyway?Asking convicted felons to surrender their genetic privacy is one thing. TAKING `ROOTS' TO A DNA LEVEL
January 29, 2006
The chairman of Harvard University's Department of African and African-American Studies has just produced a four-part series for PBS, "African American Lives," in which DNA testing is used to trace the African ancestry of nine famous Americans.
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Purification of Complex Biological Samples
DNADNASample PrepSample PrepBloodBlood
Nucleolus, Polymerases, Ceramides, Chromosomes, Chromatin, mRNA, Cytoplasm, Leucocytes, Sugars, Lipids, Salts, Urea, Carbonic acids, Cofactors, Precursors, Hemoglobins, Erythrocytes, Monocytes, Smooth endoplasmatic reticulum, Macrophages, Thrombocytes, Platelets, Lymphocytes, Basophils, Eosinophils, Neutrophils, Megacaryocytes, Plasma, Clotting factors, Actin, Microfilaments, Serum, Fibrin, Lysosomes, Ezrin, DNA, Hemaglobins, Heptaglobins, Transferrin, Fibrinogen, Serum albumin, tRNA, Salts, Polymerases, Centrioles, Immunoglobulins, Carrier proteins, Cytokines, Angiotensins, Chemokines, Bradykines, Plasma membranes, Ribosomes, Actin, Vesicles, Complement components, Nuclei, Rough endoplasmatic reticulum, Nucleoli, Golgi apparatus, Glycoproteins, Microtubules, Mitochondria, Mitochondrial nucleic acids, Vacuoles, Talin,
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Multiple QIAGEN Product Dimensions
Nucleic Acids/Genetic Information
Assays/ApplicationsBiological Samples
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Focus and innovation
Leading market share and penetration
Science-driven culture
Brand excellence
Standard-setting technologies
Growing leadership in MDx
Strong and deep partnerships
QIAGEN’s Leadership
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Instrumentsstrong growth in major BioRobot product lines
ConsumablesStrong new product lines4% growth from products launched in 2005
Other
88%
10%
Revenue Breakdown by Product Line
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BioSprintEZ1
$28,000
BR M48 - M96BR 3000
$40,000-80,000
BR 8000 and UHT systems$70,000 and up
1 6 48 96 samples (manual)
Consumable and Automated Product Lines
1 6 48 96 (>20,000) samples (automated)
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A Global Company
Total Employees: 1599
Americas< 50% of Sales: Sales/Marketing Force: 210
EuropeApprox 40% of SalesSales/ Marketing Force: 270
AsiaApprox 10% of SalesSales /Marketing Force: 50
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Markets by Customer
Life Science Research
Academic Research Solid in most countriesUS solidEurope strongJapan outlook stronger
Pharma/Biotech Research Strong in US, softer in EUKey account management very successful
Applied Testing
Still small –but accelerating growth rates
Molecular Diagnostics
Direct sales strong growth,outlook strongOEM sales still off target
Academia 40%
Mkt. growth 5-7%
PharmaBiotech
25%Mkt. growth
7-9%
Applied Testing
10%Mkt. growth
20-30%
Molecular Testing
25%Mkt. growth
20-30%
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Life Science Growth Drivers
Collection Stabilization Homogenisation Lysis Purification
Preanalytical Standardization
Cloning
Sequencing
Gene Expression
Arrays
Real Time PCR
Genotyping
DNA, RNA Assays
Mouse Knock-outs
PCR
Multiplex Assays
Bacteria
Blood
Viruses
Tissue
Swabs
Yeasts
Stool
Urine
Hair
Saliva
Standardized analytes
Standardized analytes
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Life Science Research Market Leadership
Mar
ket s
hare
100%
Home Brew
Competitors
Preanalytical Technologies
Highest market share
Strong IP portfolio
Strong brand
Sales leadership
Standard-setting technologies
Significant barriers to entry
Stable, cash generating business
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QIAGEN – One of the Strongest Brands in the Industry
The QIAGEN name is synonymous withsuperior performanceinnovative productshighest quality and reliabilitytrust
QIAGEN built this powerful brand with hard workmarket and technology competencespirit of innovationpassion for qualityfriendliness & commitment to customers
The QIAGEN brand is one of its most valuable company assets - it helps to attract new customersenter new markets keep the ones we havesell new products obtain premium pricesincrease barriers of entries
QIAGEN: Sample Technology and Assay CompetenceQIAGEN: Sample Technology and Assay Competence
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Develop: Innovation Driving Growth
Industry average
QIAGENaverage
QIAGEN2005
Time
NewProducts
RatioInnovation
processes changed in 2004
QIAGEN = Innovation Leader
(products launched In same calendar year)
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Organic Growth Rates
Industry average
QIAGEN2005
~5%
Total: ~9%
Leading Organic Growth Rates
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Source: company estimates, various industry research reports
Food Pathogens
Food GMO
BioSecurity
QC PharmaPharmacogen.
Veterinarian
Human ID
Estimated market: >US$ 500 million (2008)
Applied Testing Markets
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Total Diagnostics Markets
Molecular Diagnostics
6%
Diabetes Care21%
Other IVD23%
Clinical Chemistry
14%
Immunochem25%
Near Patient Testing
11%
Source: company estimates for 2006, various industry research reports
$2 B Market
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QIAGEN – a Leader in Molecular Diagnostics
Oncology 11%
Blood Banks/Other
25%
Genetic Testing 13%
Viral infections 39%
Non-Viral Infections
12%
Estimated market:> US$ 2 billion (2006)
Source: company estimates, various industry research reports
RocheGenprobeBayerQIAGENAbbottDigeneOthers .
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QIAGEN MDx Strategy Evolution
Expanding portfolio of assays
Artus acquisition
PG Biotech acquisition
Setting standards in preanalytical solutions
Linking with tests (assays)
CE and FDA regulated products
Numerous strategic alliances
Impressive new product pipeline
More than 20 assay developers
>12 new assays to come in next 4 months
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• CMV LC CE
• CMV RG CE
• CMV TM CE
• HSV 1/2 RG CE
• HSV 1/2 TM Abbott
• C. trachomatis TM CE
• C. trachmoatis RG CE
• C. trachomatis LC CE
• M. pneumoniae LC CE
• B. pertussis LC CE
• Enterovirus LC
• L. pneumophila LC
• SARS Coronavirus LC CE
• SARS Coronavirus RG CE
• SARS Coronavirus TM CE
• B. anthracis LC
• B. anthracis RG
• B. anthracis TM
• HAV LC CE
• HAV RG CE
• HAV TM CE
• WNV TM
• B. pertussis RG CE
• C. trachomatis Plus TM CE
• C. trachomatis Plus LC CE
• C. trachomatis Plus RG CE
• HIV-1 RG CE
• VZV RG CE
• Salmonella LC
• Salmonella RG
• Salmonella TM
• Campylobacter LC
• Campylobacter RG
• Campylobacter TM
• Dengue RG
• Influenza/H5 LC
• M. tuberculosis LC CE
• M. tuberculosis RG CE
• M. tuberculosis TM CE
• Malaria diff QC LC
• M. paratuberculosis LC CE
• Mycobac. diff LC CE
• Hemochromatosis LC CE
• Factor II/V LC CE
• HBV LC CE
• HBV RG CE
• HBV TM CE
• EBV LC CE
• EBV RG CE
• EBV TM CE
• Borrelia LC CE
• Influenza LC
• Orthopox LC
Representative but not complete list
QIAGEN Real Time PCR Assays
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Shenzhen PG Biotech
SFDA approved to sell qPCR diagnostic kits
GMP manufacturing plant certified by SFDA for extrinsic diagnostic reagent in China
Only manufacturer in China possessing certificates for HIV, HCV and HBV necessary for blood banking testing
First company approved for PCR-based avian flu test for veterinarian and quarantine testing
Approx. US$ 4 million in 2006
Expect to close in 1H06
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Molecular Diagnostics Growth Strategy
OEM Devel.
5%
OEM Sales15%
Direct Sales 80%
Direct Sales
Growing direct sales force > 40
No instrument dependency
Focus on pathogens
Market leader is developing countries
OEM Products
Integrated solutions
Assays, preanalytical, automation
> 15 Partners
>100 clinical trials using QIAGEN
> 50 clinical trials using PreAnalytiX
OEM development
Developing solutions for partners
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Applied Biosystems
Abbott Laboratories
Roche Diagnostics
Molecular Diagnostics
Applied Biosystems
Abbott Laboratories
Roche Diagnostics
Applied Biosystems
Roche AppliedScience
Bio-Rad,
Stratagene
Cepheid
Applied TestingLife Science Research
The Complete Solution
Open ArchitectureDetection Instrument
PCR Assay
PreAnalyticalSolution
Mirrored Capabilities
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Corporate and Business Development
1. Develop 2. Partner 3. Acquire
Capabilities
Products
Channel
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Executing on the Acquisition Strategy
Core Markets:Standardization &
Integration
Core Markets:Standardization &
Integration
Expand Markets:Establish New Standards
Expand Markets:Establish New StandardsNew Markets:
DisseminationNew Markets:Dissemination
3
1
Discovery Clinical phases
Plasmid
Cells
2
gDNA
RNA
Molecular Diagnostics
Applied Markets
Academic research
BiomedicalResearch
Pharma
Personalized Medicine
Proteins
Routine use
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Integrations Are A Key CompetencyIntegrations Are A Key Competency
Company Rationale DateRevenue
contribution ConsiderationMultiple
(12 months) Integration2006 Upfront Milestones Total x+1 2006 2007 Update
RNAture Sample Preparation May 05 0.5 neutral accretive
TianWei Sample Preparation June 05 1.5 2.0 2.0 4.0 2.7 neutral accretive
Nextal Sample Preparation June 05 3.0 9.7 4.5 14.2 4.7 neutral accretive
SuNyx Sample Preparation Aug 05 1.0 0.8 0.8 1.6 1.6slightlydilutive
accretiveproduct
introduction delay 2 mo
LumiCyte Sample Preparation Aug 05 2.0 3.0 4.0 7.0 3.5slightlydilutive
accretive
Eppendorf 5-Prime Sample Preparation Dec 05 6.0slightlydilutive
accretive just started
artusMolecular
DiagnosticsMay 05 15.0 27.6 11.6 39.2 2.6 accretive accretive
PG BiotechMolecular
DiagnosticsSep 05 4.0 14.5 0.0 14.5 2.2 neutral accretive not closed
Total 33.0 57.6 22.9 80.5 Ø 2.4
Accretion
notdisclosed
notdisclosed
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PreAnalytical Solutions
2005 2006
Preanalytical Solutions
(Collection, stabilization, purification,
storage, processing
etc.)
Mission:
Absolute leadership
Develop
Partner
Acquire
• over 50 new products• record success: 4% of sales• increased tech. leadership• increased market leadership
• against homebrew• against competitors
• Procognia• Epigenomics• approximately 50 partnerships • about 15 new in 2005• over 10,000 citations in 2005
• RNAture• TianWei• Nextal• LumiCyte• SuNyX• Eppendorf 5-Prime
• very strong pipeline • for 2006• for 2007
• Improved partnering capabilities
• focused - strategic
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Applied Testing
2005 2006
Applied Testing*)
(preanalyticalsolutions plus
test kits (assays))
Mission:
Create LeadershipPositions as Early Entrant
Develop
Partner
Acquire
• rapid response to avian flu• largest provider of tests• largest provider of test components
• forensics portfolio expanded• appl. testing sales channel
• artus diagnostics • PG Biotech
• focus areas defined• Leverage newly built channels
• seek more alliances• assays• channel
• focused – strategic• expand position
*) Forensics, veterinary, quality control in food, pharma and other manufacturing etc., biodefense etc.
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Molecular Diagnostics
2005 2006
MolecularDiagnostics
(preanalyticalsolutions plus
test kits (assays))
Mission:
Rapid Expansion
Develop
Partner
Acquire
• first 510ks (incl de novo!)• over 30 products launched• built sales channel
• 25 partnerships, new:• expanded Roche Veridex• Beckman Coulter Abbott
• Protedyne• Epigenomics
• artus diagnostics • PG Biotech• Eppendorf 5-Prime
• integrate key preanalyticalsolutions with assays
• strong pipeline • regulated products• leverage sales channel
• added partnering capabilities• increased focus on preanalytical solution plus assays
• focused – strategic• expand position
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Market leadership in preanalytical solutions
Technology leadership in preanalytical solutions
Expanding leadership in protein sample preparation
Complete portfolio for all markets and segments
Leadership in research markets with PCR and other bioassay technologies
~4th largest molecular diagnostics company
QIAGEN‘s Leadership
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Cash generating, solid core business
Highest market share
Industry leading growth
Standard setting technologies
Proven innovation engine
MDx springboard for future growth
Transactions for catalytic growth
Key Investment Considerations
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Fiscal 2005 Financials
and
Guidance 2006
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Increasing market leadership
vs. homebrew & competition
Increasing tech leadership
Rapidly grow MDX business
Done
Significant expansion
Grew into #4 in market
405-407 net sales
(guided Nov. 8, 2005)
0.44-0.47 EPS*
Operating margin: 24-26%
Financial Targets
Reached 409
(FX guidance rate)
Reached 0.45 cents EPS*
Operating margin: 26%
Target Achieved
Strategic Targets
Meeting Targets
Difficult year for industry – QIAGEN achieved targets
* excluding acquisition, restructuring, integration and related charges
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20%
21%
22%
23%
24%
25%
26%
1 excluding the synthetic DNA business unit, sold in Q2 20042 excluding acquisition, restructuring, integration and related charges as well as amortization of
acquired IP
Strong earnings engine
QIAGEN Fiscal 2005
+ 11%+ 15%
+ 18% + 18%
US$360m
US$398m
24%
26%
US$59m
US$69m
US$0.39
US$0.46
Net sales1 Operating margin2 Net income2 EPS2
2004
2005
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Operating margin: Focus on higher gross margin consumables Managed S&M and G&A costsGood base going forward
* excluding acquisition, restructuring, integration and related charges as well as amortization ofacquired IP
QIAGEN Margin Development
2004
2005
20%
21%
22%
23%
24%
25%
26%
Gross margin Operating margin* Net income margin*
67%
69%
24%
26%
15%
17%
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2.5% foreign currency impact on revenues using Feb 15, 2005 guidance exchange rates
Operating income and net income protected by natural hedge
-10.1408.5398.4Total
-1.276.174.9Revenues other currencies
-3.037.7 34.7Revenues in JPY
-5.9127.7121.8Revenues in Euro
167.0167.0Revenues in US$
Change due to currencyGuidance ratesReportedIn US$ million
Currency Impact Actual to Guidance
Actual
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Free cash flow computed using cash from operations less capital expendituresCash EPS computed using cash from operations divided by number of fully diluted shares
Operating cash flow plus 70%
0.360.61Cash EPS in US$ per share
41.077.5Free cash flow
12.613.7Capital expenditures
53.691.2Operating cash flow
-18.104.0Working Capital & others
23.025.0Depreciation & amortization
48.762.2Net income
FY 2004FY 2005In US$ millions unless indicated
QIAGEN Cash Flow Statement
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2006 Guidance
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~14%Revenues excluding FX impact2
~ 12%439 - 451398Revenues (MUS$)1
~18%26 – 28%26%Operating margin3
~16%0.52 – 0.550.46EPS in US$ per share3
Growth %2006E2005
Summary Income Statement 2005 – 2006
1 2006E based on FX 01/31/062 2006E based on FX 20053 excluding acquisition, integration and restructuring related charges as well as
amortization of acquired IP and equity-based compensation
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Summary Revenue Statement 2004 – 2006
~ 10%9%406-418376346Organic growth
~ 12%5%439-451398381Reported revenues/Guidance
~ -2%-9FX impact1
~14%5%448-460398381Revenues FX rate 2005
-33-22-35Acquisitions/Divestments2
2006E2004Growth
05/06Growth04/05
2005In million US$
1 FX rate 2005 / FX rate 01/31/06 2 Revenues from the synthetic DNA business unit, sold in Q2 2004 and the divestment of pAlliance
as well as shifted revenues from PAXgene to BD announced in August, 2005
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360
370
380
390
400
410
420
430
440
450
460
Revenues 2005 Volume + Price Acquisitions Exchange rateimpact
Revenues2006E
Organic Growth is Driving Revenues
0
Organic Growth ~ 10%
Acquisition and Divestmentrelated revenues
in 2005
In million US$
~33 ~ -9
22
~23
439- 451
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Q12004
Q12005
Q12006E
Q22004
Q22005
Q22006E
Q32004
Q32005
Q32006E
Q42004
Q42005
Q42006E
0.12-0.13
in US$ per share*
0.12
0.100.110.100.10
0.08
0.11
0.13-0.14
0.15-0.16
0.13
QIAGEN GroupQuarterly EPS Growth 2004 - 2006
0.11-0.12
* all figures excluding acquisition, integration and restructuring related charges as well asamortization of acquired IP and equity-based compensation
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185
173
165
155
Dec. 2003 Dec. 2004 Dec. 2005 Dec. 2006E
6367
5854
Dec. 2003 Dec. 2004 Dec. 2005 Dec. 2006E
Inventory Days
Receivables-DSO
Continuous decrease in
Inventory Days
Decrease to 54 DSO(Industry standard 70 days)
Managing Working Capital
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30
34
3739
2003 2004 2005 2006E
6%
4%
6%
8%
2003 2004 2005 2006E
7%
6% 6% 6%
2003 2004 2005 2006E
7- 8%
CAPEX as % of sales Depreciation & Amortization as % of sales
R&D Expenses (MUS$)Excl. purchased intangible amortization
approx. 40
approx. 6%
QIAGEN GroupR&D and Capital Expenditures
Investing in R&D toboost Innovation
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2005
Solid financial performance
Continued as dominant player in pre-analytics
Capitalized on strong growth in core business
Eight transactions for catalytic growth
Gained strong strategic momentum to shape molecular diagnostics markets
Expanded market penetration in Asia
2006
Strong growth in molecular diagnostics
Expand industry standard setter position
Leverage operational strength to further improve margins
Developing – Acquiring – Partnering
2005 Review and 2006 Outlook