Qiagen N.V. History

Company Perspectives:

The QIAGEN goal is to offer customers high-quality, innovative products that provide maximum convenience and reliable results, backed by excellent technical and customer service. Most QIAGEN products are available in ready-to-use kit format, and are supplied with comprehensive handbooks which include information about both the technology and the protocols. If more information is needed, the QIAGEN Technical Service teams are available to provide helpful advice about QIAGEN products and most molecular biology procedures. Key Dates:

Key Dates:

1983:

Metin Colpan completes Ph.D. thesis.

1984:

Colpan founds Qiagen.

1986:

First ready-to-use plasmid kit is developed.

1993:

Peer Schatz is named as CFO.

1995:

First BioRobot is marketed.

1996:

Public offering is made on NASDAQ exchange.

1997:

Secondary offering is made on Frankfurt exchange.

1998:

Company acquires Rosys Instruments AG; launches Japan subsidiary.

1999:

Company acquires Rapigene Inc.; forms PreAnalytiX joint venture.

2000:

Company acquires Operon Technologies Inc.

Company History:

Biotech pioneer Qiagen N.V.--the holding company is based in The Netherlands but the company's main operations and headquarters are in Hilden, Germany--is providing the picks and shovels for the 21st century's genetics gold rush. The world leader in such fields as ultrapure DNA and RNA extraction and single nucleotide polymorphism (SNP) screening, Qiagen dwarfs its nearest competitors, and is said to be seven times larger than all of its primary competitors combined. This is because Qiagen, led by founder and CEO Metin Colpan and CFO Peer Schatz, holds the patent for a revolutionary and proprietary resin-based DNA extraction process developed by Colpan in the early 1980s that has since become a standard throughout the world. Qiagen has successfully leveraged and extended that technology to offer a wide array of more than 250 products, primarily in the form of consumable 'kits' to more than 150,000 customers worldwide. Qiagen also sells complete robotics systems enabling automated DNA extraction using its kits, freeing up valuable laboratory time and manpower. The company's technology, which has been used in such infamous circumstances as the O.J. Simpson murder trial and the testing of Monica Lewinsky's dress stains, has helped reduce DNA extraction times from several days to just two hours, allowing for large-scale production of the ultrapure DNA and RNA necessary for the booming genomics--the application of genetic research to the health field--industries. Qiagen, which posted $144 million in revenues in 1999, expects to see its sales jump to as much as $1 billion as the market for its products booms in the early years of the new century. The company trades on the NASDAQ and Frankfurt secondary market stock exchanges.

DNA Extraction Pioneer in the 1980s

Extracting the pure DNA from bacteria or from cells of human or animal tissues was a tedious and even dangerous process in the early 1980s, requiring the handling of toxic and extremely harsh chemicals and involving several days to complete. Yet the availability of large and reliable quantities of pure DNA and RNA was a requirement for the building of the nascent biotechnology field, then just gathering steam with the launch of the human genome project and other genetic breakthroughs being made at the time. Among those working in genetics technology in the late 1970s was Turkish-born Metin Colpan.

Colpan had come to Germany at the age of six with his parents, who were part of the wave of 'guest workers' entering Germany in the 1960s. Colpan was to consider this background as an important part of his later success, giving him the flexibility to meet the ever-changing demands of the biotechnology industry. As Colpan told Business Week: 'I have no problem orienting myself to foreign surroundings.' Colpan went on to complete a Ph.D. in chemical engineering at the University of Darmstadt. Colpan's Ph.D. thesis was to provide the foundation for his later success. By the late 1970s, Colpan had become convinced of the need for new methods and technologies for extracting the pure nucleic acid needed for genetics research. Colpan's thesis detailed the development of a silica resin based anion-exchanger that could separate out nucleic acids from cells more rapidly than the traditionally time-consuming and more dangerous chemical methods.

Completing his thesis in 1983, Colpan applied for a U.S. patent for his technology (which he received in 1987). Colpan then made the rounds of Germany's pharmaceutical industry seeking financial backing to implement his resin-based technology from such firms as Roche and Bayer. Yet, as Colpan told Forbes, these companies thought him 'too entrepreneurial.' Colpan's fortunes were to change in 1984, however, after a one-hour meeting at the Frankfurt airport with Moshe Alafi, a prominent California-based investor in the newly appearing biotechnology sector. Alafi, who had been among the earliest investors in such biotechnology pioneers as Biogen and Amgen, agreed to provide Colpan with a letter of commitment. With Alafi's backing, Colpan was able to raise some $3 million to launch his company.

Colpan joined with three other partners to launch Qiagen N.V., a Netherlands-listed company with operational headquarters based in Hilden, Germany in 1984. The company claimed the distinction of being the first venture capital-backed German company. His resin-based anionic-extraction technology also was set to revolutionize the biotechnology industry. In 1986, Qiagen introduced its first ready-to-use plasmid kit, which offered customers all the materials and equipment needed for the company's breakthrough nucleic acid cleansing process.

Yet the company, which remained the exclusive manufacturer of Colpans Anion-Exchange Resin, quickly ran into trouble. Part of the company's troubles came from its eagerness to adapt its product to a broad variety of applications, targeting a range of industries from agricultural products to veterinary research laboratories, spreading the company too thin. Another factor in the company's initial growing pains could be found in the hostile climate toward genetic research in Germany during the mid-1980s. Reeling from the forced shutdown of another company's insulin production facility, the country's biotechnology sector took the better part of a decade to regain its assurance. Meanwhile, Qiagen found itself shunned by its potential German customers.

Facing the brink of financial failure, Qiagen turned its attention to the booming U.S. market for biotechnology, which was quickly capturing the lead in what many began to see as the gold rush for the 21st century. Rather than compete in the end-products sphere, such as in drug development and gene therapies, which required years of costly research with no guarantee of success, Qiagen remain focused on providing what it liked to call 'the picks and shovels' of the new gold rush. As Peer Schatz, who was named the company's CFO in 1993, told the Financial Times: 'You know in the gold rush it was the Levi Strausses and Wells Fargoes that made the money, not the gold diggers. We think genomics will equal significant growth for Qiagen without having to compete with our customers.'

Gathering Strength in the 1990s

Qiagen was finding more and more customers for its revolutionary technique. The company also worked closely with its customers--it was later to claim that its customers represented all of the researchers active in the field throughout the world--a strategy that bore fruit especially in enabling the company to spot new trends in biotechnology research. A contract in 1991 for a large-scale order of DNA led the company to become one of the earliest entrants in developing products for gene therapy applications, a biotechnology segment that was to become one of the fastest growing by the end of the decade. By the end of that year, the company was profitable, while still posting less than $10 million in total sales.

The arrival of Peer Schatz as CFO in 1993 helped the company put an end to its shaky financial condition. The Austrian-born and U.S.-educated Schatz helped Colpan redefine the company's strategy, narrowing its sights--and its resources--on the market for genetics research. The company's new business plan helped the company focus not only its research and development resources but its sales and marketing budget as well. At the same time, the company continued to expand its array of products as it adapted its patented technology to the needs of the various branches of biotechnology research.

In 1995, Qiagen launched a new line of so-called BioRobot workstations. The BioRobot was intended to automate a number of the steps in the DNA purification process, freeing up researchers' time. Although the company's automated equipment remained a sideline to its main consumable products business, Qiagen continued to develop new automated equipment across a wide range of laboratory processes.

By 1996, Qiagen had turned the corner, posting more than $50 million per year, for profits of more than $5 million. The company had successfully positioned itself as the world leader in its product niche, raising its kits--which cost customers between $50 and $2500 each, while returning margins of up to 70 percent to Qiagen&mdashø an industry standard. As Schatz described the company product to Business Week: 'We're the Post-Its of the biotech industry.'

Qiagen went public in 1996, taking a listing on the NASDAQ stock exchange, an offering that allowed two of the original four partners to cash out. Qiagen was to see its stock soar, boasting one of the highest price-to-earnings ratios (reaching 295 by the end of the decade) in its market, and valuing the company at some $6 billion. The NASDAQ offering was followed by a secondary offering on the Frankfurt Stock Exchanges Neuer Markt in 1997.

The public offerings gave Qiagen the financing to begin expanding its operations into new biotechnology areas. One of the company's first moves was to expand its automated process capacity with the acquisition of Rosys AG, based in Switzerland, which the company combined into a new subsidiary, Qiagen Instruments AG. That subsidiary produced a new successor to the original BioRobot in 1999 and continued to develop automated instruments for the biomedical research laboratory. In 1998, Qiagen launched a new subsidiary in Japan, Qiagen KK, helped by the company at 60 percent.

Recognizing the growing maturation of its core plasmid market, Qiagen began making steps to gain expertise in other fast-growing and complementary biotechnology areas. At the end of 1999, the company acquired a new product area when it bought Seattle-based Rapigene, bringing Qiagen that company's Masscode screening technology for single nucleotide polymorphisms (SNP). The addition of Rapigene, which saw its name changed to Qiagen Genomics Inc., gave the company a strong entry into the booming genomics market.

Qiagen also was forming a number of strategic partnerships and alliances, joining with such other companies as Evotec, Zeptosens, Affymetrix, and others. In 1999, the company joined with Becton, Dickinson and Company to create the joint venture partnership PreAnalytiX in order to create standardized systems for nucleic acid collecting, stabilizing, and cleansing.

With its sales nearing $145 million in 1999, Qiagen turned to the new century with confidence--forecasting a rise in its revenues to as much as $1 billion by the year 2005. Aiding this growth was a continued series of strategic alliances and new acquisitions. In June 2000, the company paid $110 million in stock to acquire California-based Operon Technologies Inc., a maker of synthetic DNA and other synthetic genetic materials used for pharmaceuticals testing. With the biotechnology sector set to revolutionize much of medical care and the pharmaceutical industry in the 21st century, Qiagen was well positioned to maintain its position as a leading player in the biotech boom.

Principal Subsidiaries: QIAGEN GmbH (Germany); QIAGEN Inc. (U.S.); QIAGEN Ltd. (England); QIAGEN AG (Switzerland); QIAGEN SA (France); QIAGEN Pty. Ltd. (Australia); QIAGEN Inc. (Canada); QIAGEN Instruments AG (Switzerland); QIAGEN Genomics Inc. (U.S.); QIAGEN K.K. (Japan; 60%); Rosys Inc. (U.S.; 50%); QIAGEN North American Holdings Inc. (U.S.); QIAGEN Sciences Inc. (U.S.); Operon Technologies Inc. (U.S.).

Principal Competitors: APBiotech Inc.; Beckman Coulter, Inc.; Bio-Rad Laboratories, Inc.; Celltech Plc.; Cepheid; Ciphergen Biosystems, Inc.; Genometrix Incorporated; Genset S.A.; Innogenetics S.A.; Invitrogen Corporation; Neurosearch AB; Millipore Corporation; Packard BioScience Company; Stratagene Holding Corporation; Visible Genetics Inc.

Further Reading:

• Behr, Peter, 'Genetics Company Favors Md., Germantown May Get Qiagen Plant,' Washington Post, November 19, 1999, p. E01.
• 'CEO Outlines Qiagen's Sales and Marketing Strategies,' Wall Street Transcript, December 18, 2000.
• Firn, David, 'Qiagen in Deal to Buy Operon,' Financial Times, June 13, 2000.
• Karnitschnig, Matt, 'The `Post-Its' of the Biotech Industry,' Business Week International, July 17, 2000, p. 26.
• Moukheiber, Zina, 'Gold Digger,' Forbes, November 1, 1999, p. 408.
• 'Qiagen to Reach $1 bln in Sales in 2005,' Reuters, April 6, 2000.
• Van der Pas, Marijn, 'CEO Highlights Qiagen's Competitive Advantages,' Wall Street Transcript, January 10, 2001.

Source: International Directory of Company Histories, Vol. 39. St. James Press, 2001.