Qiagen at Jefferies Conference: Strategic Growth and Margin Expansion

On Thursday, 05 June 2025, Qiagen (NYSE:QGEN) presented at the Jefferies Global Healthcare Conference 2025, outlining a robust strategic vision. The company showcased its strong consumer portfolio and improving profitability while addressing challenges like academic and government funding pressures. Qiagen is ahead of its EBIT margin targets, with plans to update them, and is focusing on gross margin expansion in the coming years.

Key Takeaways

• Qiagen’s Q1 performance exceeded expectations with a 7% actual delivery.
• The company is ahead of schedule for its EBIT margin target of 31% by 2028.
• Strategic acquisitions and partnerships are key to expanding capabilities and market reach.
• Qiagen is transitioning its bioinformatics business to SaaS contracts, impacting growth temporarily.
• The company plans to increase share buybacks to $500 million.

Financial Results

• Qiagen achieved a 7% actual delivery in Q1, surpassing forecasts.
• Operating margin improved by 330 basis points over the last two years.
• The company is on track to meet its EBIT margin target of 31% by 2028.
• Gross margin expansion is anticipated in 2027 and beyond, driven by better capacity utilization.
• R&D spending is expected to normalize, enhancing future profitability.
• The acquisition of Genox is projected to be neutral on EPS this year but accretive long-term.

Operational Updates

• Qiagen acquired Genox to enhance data analysis capabilities for small and medium-sized labs, adding $5 million in sales this year.
• The transition of the QDI bioinformatics business to SaaS contracts is underway.
• Strategic partnerships, such as with Tracer Biosciences for MRD testing on the QIAcuity platform, are expanding content and partnerships.
• Qiagen is launching new instrumentation platforms: KIA Sprint, QIAsymphony, and Kaia Mini.

Future Outlook

• Qiagen targets $250 million in revenues by 2028, focusing on life sciences and clinical growth.
• The company sees a $1.5-1.7 billion market opportunity in TB testing with QuantiFERON, currently at $500 million.
• Three new instrumentation platforms are expected by 2026 to boost automation and consumable growth.
• Qiagen is considering a second automation partner for QuantiFERON.

Q&A Highlights

• The U.S. NIH budget represents 4-5% of Qiagen’s revenue, with academia contributing 6-7%.
• Qiagen emphasizes the consumable nature of its portfolio, with 85-90% of academic exposure.
• The company is comfortable with its pricing strategy in digital PCR, having increased prices this year.
• Opportunities are seen in biopharma despite challenges in the academic environment.

Readers are encouraged to refer to the full transcript for more detailed insights into Qiagen’s strategic direction and financial performance.

Full transcript - Jefferies Global Healthcare Conference 2025:

Operator: Okay. Thanks.

Unidentified speaker, Analyst: I think, Roland, maybe I’ll just start off with a higher level question. You’ve done a lot in terms of reshaping the portfolio. You’re buying stock. You’ve got, you know, expanding margins. You’re you’re doing all the right things.

I think are there areas areas you think you could be doing more and what do you

Unidentified speaker, CEO or CFO, QIAGEN: think is

Unidentified speaker, Analyst: most underappreciated right now?

Unidentified speaker, CEO or CFO, QIAGEN: First thing that I’m going to do is buy a new new table. But once I’ve done that, I do think, as you said, it’s clearly a quite volatile environment. Nevertheless, I think Caixin had a good start and I do think it’s testament to the very resilient consumer portfolio we’re having with 85% of revenues coming from consumables. I do think what is somewhat still underappreciated by the market is also the power we have. And I do also think we are demonstrating as we speak in terms of gaining profitability.

We had over the last two years a margin improvement of three thirty basis points in operating margin. But I think it’s also important to understand that we are not even close to an end. We have clearly a couple of impacts there, which were onetime, which is mainly the discontinuation of our Nordics franchise. But even within the three thirty basis points, the majority comes from ongoing efficiency measures. And we do believe they are carrying on probably for the next few years.

Therefore, as you know, we have a target out of EBIT margin of 31% by 28%. It’s quite clear that we hit that much earlier, so we have to update that at a given point in time. Same is true for cash flow generation. Would say still thanks to the COVID days, we were able to make all material investments during that day. And therefore, we still can nicely go into utilization of that capacity.

So one thing that is important to understand that not only in terms of cash flow, but also in terms of margin expansion and gross margin impact is going to kick in, probably not too much in 2026, but 2027 and beyond, we should see also a nice expansion in terms of gross margin because we are going then in areas like KAYAstat, but also in others where we come out of the significant underutilization in a much more regular environment. So I would say that is probably the one thing where most people in these days do not take attention to everybody else, of course, very detailed in terms of top line, not too much on profitability.

Unidentified speaker, Analyst: And you mentioned that choppy backdrop, obviously academic and government has been challenging for everybody. I think a lot of your peers are guiding down 20%, twenty five %. You flagged the consumable nature of the portfolio and I think sample preps helped as well. Maybe just talk a little bit about your relative exposure, what was academic down in the first quarter and then what are you baking in for the year?

Unidentified speaker, CEO or CFO, QIAGEN: Let’s say when we have given guidance for the year, I think we took It’s probably the right drug to take. That’s the reason why we also I think came in better than expected in the first quarter. We had a 7% actual delivery in the first quarter. We clearly said that TORON for the second quarter was 5%.

Again, it’s very clear that so far things are going quite well. And I do think what is important to understand in terms of exposure, U. S. NIH budget is for us around 4% or 5% of total. And academia, U.

S. As a full picture is probably somewhere between 6%, seven percentage points. So I think it’s meaningful, but compared to others, clearly a much lower exposure plus and I think that is important, 85%, ninety % of this exposure is consumables. And as long as you don’t have any significant ramp down and headcount, it keeps quite stable, right, because integrated part of any kind of work you want to do there. And again, as I know, got now in the last couple of events, I always asked, but it was probably different in Q1.

January was better than March. I said, no, it was always quite fairly allocated. But then April it came down. No, April didn’t come down. Now we are in June I would say there’s clearly underlying volatility in all markets, but we feel still very comfortable with what we said.

Unidentified speaker, Analyst: I guess assuming we’re not one and done with the NIH budget being under pressure for next year. I mean how are you preparing for an environment or maybe that budget is down for a couple of years in a row?

Unidentified speaker, CEO or CFO, QIAGEN: First of all, again, one step back. You know that of course, but just to remind that we have 50% of our revenues coming from the clinical environment and clearly 50% in life science. And within that life science budget, there’s only a smaller part really driven by public funding in particular in The U. S. As I just mentioned before.

So yes, we have to look into that. But even if you look at our overall exposure on tech instrumentation, which is probably the single largest part of it, which would be exposed other than one instrument, all our instruments are below $70,000 So even in that area, we are typically in an environment where an instrument is breakeven twelve, eighteen months. So it’s easy to make that case. Right now everybody is a bit more careful, but again, as I said before, if you could pick between a minus 10% budget NIH today and a minus 5% in September, we would take the minus 10% today because what is really the killer right now is uncertainty. People can deal with it.

And we have seen that before. We all got clearly very positively during the COVID days when NIH budgets were up double digit, pre COVID as well. We were used to flattish environments and we even had sometimes had negative environments. It hasn’t changed too much our numbers in general.

Unidentified speaker, Analyst: Maybe shifting to some of the pockets of strength. So QDI, you had a good quarter there. Talk a little bit about I think you said pharma in particular is doing well. Was that a couple of big wins? Is it a broader recovery in pharma?

Operator: QDI is our bioinformatics business where we’re helping customers who are taking what are universal data files coming out of any sequencer and being able to make sense of the data. And we have both the discovery side of the business and the clinical side. And the clinical side is obviously growing faster than the discovery side. Discovery side is also meaningfully bigger than where we are on the clinical side. But to your point, yeah, we’re seeing good wins in pharma.

We’re the largest player out there in the industry. We’re doing about $100,000,000 of business in this sector right now. What we’re going through is a transition from licensing agreements and moving that towards SaaS contracts. Software as a Service, that’s a bit of a drag right now on the overall growth. As we go through that transition, we see that continuing for probably another twelve to eighteen months.

But we feel good about the uptake in that business.

Unidentified speaker, Analyst: And then you alluded to a deal on the last earnings call, and then you did Genox. Maybe just talk a little bit about that, the strategic fit, what that brings to

Unidentified speaker, CEO or CFO, QIAGEN: to the book?

Operator: Sure. So that was, you know, talking about something that we saw coming down the pipe. Genox is a company based in Israel that we picked up. What you’re doing is being able to help people make sense of their own data, especially labs that want to be able to work on their own sequencing file. You see people who take a hybrid approach that they will maybe send out the samples to be sequenced to larger labs or they’ll do it in house, but they want to be able to do the analysis work, the interpretation work internally.

And so our QDI product, which is called QIAGEN Clinical Interpret, QCI, is very good with big data sets and for larger customers. Genox had a very good solution for small or medium sized customers, where you have a bit more of a pay as you go approach. That’s where they are a good fit. What made them also very good is that the part of the founder group are people who had worked at Google and these types of companies, so they have very good UI, UX design in terms of what’s the interface for the online platform that we’ll be able to flex that within our workflows. So it’s a good addition.

It’s adding $5,000,000 of sales this year. Obviously, it’s going to grow in the future, but it’s neutral on EPS.

Unidentified speaker, Analyst: Yes. Maybe talk the margin profile of that business. I mean longer term, how accretive could that be?

Unidentified speaker, CEO or CFO, QIAGEN: As John just said, it’s still a very nice gross margin business right now. Nevertheless, we overproportionately invest into R and D. So therefore, would say, EBIT level is probably somewhat where it is in group average. I would say that’s going to normalize over time given also the overall profile we’re seeing there. So it should be accretive to the overall company going forward as well.

Unidentified speaker, Analyst: And that’s still a pretty fragmented industry on the software side. I mean how much of a priority is it to consolidate and really scale up there?

Unidentified speaker, CEO or CFO, QIAGEN: It’s customer driven at the end of the day, right? Nobody really wants to have too many different platforms or tools. And again, therefore, also contacts with too many different service and salespeople. So I would say that the consolidation is rather driven by customer demand. As John said before, the problem is rather that while there’s quite a number of interesting technologies out there, there’s not too many who are also fulfilling the profitability demands we’re having.

So we have to find the right balance here on finding opportunities which not only deliver revenue growth, but also with a clear track to a reasonable profitability.

Unidentified speaker, Analyst: Maybe just to shift over to Kai Akuti. You’ve continued to place a lot of instruments there. I think you’ve talked about anywhere from 600 to 1,000 in a good year. Where are you kind of on that range right now? And is that still fiftyfifty equipment versus consumables in terms of the mix?

Unidentified speaker, CEO or CFO, QIAGEN: I think it’s more or a ballpark we’re in. It’s like fiftyfifty, sometimes sixtyforty in the quarter, but that kind of a ball park. If you review now the last, I would say, probably two, three quarters, I would argue that we are probably somewhat ahead of our midterm plan in terms of consumable and consumable pull through per machine. For sure driven by, I would say, the quite aggressive expansion in menu, which we did. As you know, we launched 100 panel last year on our QIAQTT platform.

We’re going to add this year at least another 100 panels as well. So we will have a very comfortable portfolio, I would say end of this year. We’re still selling probably platforms in the range we shared before. It is fair to say that it is clearly a bit more challenging in these days in the academic environment, why the bio pharma area we actually see nice opportunities and probably more or less going as planned. I would say there’s even the case to make if pharma, which can or cannot happen, gets into a more difficult environment that should get an acceleration.

Why? Because there’s clearly an opportunity with digital PCR to be faster and clearly are more cost effective than, for example, sequencing solutions. While sequencing is an outstanding solution, if you’re looking for the unknown information, typically in a biopharma area, people know these are the five, six, eight markers who either should change or should not change. You can do that with a digital PCR solution in one day instead of weeks with sequencing. And you can do it for a couple of hundred dollars compared to in the thousands.

So I would say that’s opportunity for us which might accelerate.

Operator: Related to that after what happened at ASCO, just to jump in here real quick, saw that we had the announcement with Tracer Biosciences for MRD testing where we’re opening up Chi Acuity as a platform to our partners. You’re gonna see more of these types of partner agreements come where we’re willing to work with companies that wanna create content, put that on our systems, and then we’ll be able to reach an agreement to work together. Not everything has to be made by us.

Unidentified speaker, Analyst: I mean, it’s a good question because we get that a lot in terms of digital PCR versus sequencing, right? And I know you’re talking pharma, but how do you think about the clinical side of that? Obviously, like Exact are commercializing on PCR. You’ve got others, know, guarding heavily using sequencing. How do you think about the pipeline clinically going forward?

Operator: We’re gonna be agnostic in terms of technology platform. If you wanna and that’s what you’ll see in terms of the news flow coming. If you wanna work on digital PCR, we’ll work with digital PCR, in terms of companion diagnostics or what kind of clinical applications you wanna work on. There you see the announcement with, or we’ll also use qPCR where we use QIAstat Dx. We’re technology neutral.

We will work with you what best fits your approach. Then you see with NGS what we announced with ForeSite Diagnostics. You’ll see more of those types of agreements coming. There are certain scientific needs where NGS is a better clinical fit for a companion diagnostic. There are others where digital PCR works very well.

And then you see with Chi Acuity, what we announced with Lilly for an Alzheimer’s test, AstraZeneca AstraZeneca for chronic, chronic conditions. So we’re neutral that way.

Unidentified speaker, Analyst: But I guess just to hone in on that a little bit, you’re saying in pharma, there’s a clear trend, more digital PCR over sequencing. You’re not calling that in on the clinical side. Is that

Operator: I would say right now, we’re seeing interesting deal flow on both sides, clinical, in terms of companion diagnostics with next gen sequencing and also with digital PCR. It’s more driven by what are you looking for, what’s the magnitude of the data, what’s the best way to skin the cat.

Unidentified speaker, Analyst: And how how is pricing in digital PCR? I mean, we’ve kind of flagged your big competitor there, Bio Rad, has gotten fairly aggressive, 70% discounts and the like. I mean, they’re the incumbent. How do you feel about pricing in digital PCR?

Unidentified speaker, CEO or CFO, QIAGEN: Our pricing is quite stable. Actually, we increased it quite a bit this year as well. So no discount at us.

Unidentified speaker, Analyst: And maybe do you want to just touch on the Foresight deal? I mean, I know this is a strategy to kit up more for international markets, but talk a little bit about that.

Operator: Is our approach to help improve access to technologies and platforms that you have a an LDT type test that’s available, and then we’re working with Foresight to be able to, like you said, kit it up and make it available to other labs that wanna be able to do it in in their own places. We’ve taken this approach before in the past, and and it’s part of our wheelhouse of being able to improve access to tests.

Unidentified speaker, Analyst: And you’ve put out a target for 250,000,000 by 2028. Maybe just talk a little about how much of that will be clinical? How much is pharma? What are the steps to get there?

Unidentified speaker, CEO or CFO, QIAGEN: Majority will be clearly in life science. I would say clinical is probably something as John just laid out, probably more kicking in 2728. So again, it might be 8zero twenty we’ll see. But I would say it’s probably in that kind of a ballpark. Right now, the growth clearly comes from biopharma.

I would say Academica has, as I said, underlying double digit consumer growth rate. Would expect at some point in time, if there’s more visibility on academic spending in general, we would also expect that instrumentation growth returns to double digit growth rate. So I think it’s different drivers getting us there.

Unidentified speaker, Analyst: And are there any catalysts that could really jump start that S curve for QIAcuity specifically?

Unidentified speaker, CEO or CFO, QIAGEN: Again, in terms of instrumentation placement, it’s just the same what we see in the general industry. We need clear targets or as our customers need clear targets. And again, if that is a minus 5%, minus 10%, minus 15%, I think it doesn’t matter too much, just a clear number to work with because, again, most of our instruments, as I said, are $20,000 30 thousand dollars also the differentiation factor to some of our competitors. So I think the customers can deal with that, but you want to know where you are.

Unidentified speaker, Analyst: How about the companion diagnostic opportunity for QIAcuity? Can just talk a little bit about that? And you hit pause in the IVD, you know, program. But

Operator: We hit pause there because we see LDTs as a better way to go right now as the technology is still in some early days in terms of development. You’re going to see more deals coming on Chi Acuity in the next twelve to eighteen months that we’re we have in the pipeline in terms here. And then also, you’re gonna see them coming on NGS as well. But it’s going to take some time. We’re not allowed right now to talk about the three partnerships that we’ve already signed for Chi Acuity in terms of companion diagnostics.

Those are unfortunately confidential.

Unidentified speaker, Analyst: Can you maybe just talk about pipeline and what that funnel for similar deals looks like?

Operator: The area for this area is clearly on oncology, whereas with QIAstat Dx right now, it’s non oncology applications. It’s interestingly that way. And then in NGS, it’s clearly gonna be on oncology topics.

Unidentified speaker, Analyst: Maybe QuantiFERON, you did a deep dive on that, kinda spotlighting the platform. Obviously, Roche did their Analyst Day. Talk a little bit about what you’re seeing in the market out there and any feedback you had from the Roche presentation.

Unidentified speaker, CEO or CFO, QIAGEN: I think fundamentals haven’t changed with any of these events. I would say it’s very clear that the most important message to understand is that 60% of the market is a literally one hundred and twenty year old skin test and that even this underlying 60% market is growing roughly by 4% every year just by the overall population growth, but also by more and more mandatory testings started around the world. Since the IGAR testing where QIAGEN is participating in is of course doing quite well. We had another strong first quarter, significant double digit growth rate. Mid term target is a 7% CAGR.

So we are doing clearly much better than we expected for our mid term targets. So I think that’s good news. Competitive wise, we are by far the market leader in that environment, but we are not the only company in the market, as we are moving in the market. There are a couple of Asian players in the market. It is expected that Roche comes at some point in the market.

I think the update was more or less They believe that they are in The U. S. In Europe in the market sometimes in ’26. They haven’t interesting enough, they haven’t called out any launch for The U.

S. Which was different than before. So let’s see what that means. So overall, we feel quite comfortable in our situation.

Unidentified speaker, Analyst: And maybe just can you talk geographically? I think you called out some kind of newer countries that are opening up, Oman, places like that. I mean where are you kind of seeing the newer growth?

Unidentified speaker, CEO or CFO, QIAGEN: It’s actually a global business for us. The growth rate doesn’t differentiate too much. So U. S. Is on about half of our revenues versus the world is split as usually as well.

So I would say particularly the Western world is driving the growth rate. And I would say Asia outside China is participating there quite as well. Of course, we have areas like Middle East you just called and other areas who are trying to participate as well. But it’s clearly incremental volume, but the big growth comes from the rest of the world.

Unidentified speaker, Analyst: And you put out longer term targets

Operator: for that

Unidentified speaker, Analyst: business, 7%. You’re growing double digits now. So maybe kind of talk about what’s embedded in that longer term target.

Unidentified speaker, CEO or CFO, QIAGEN: Percent is out because you wouldn’t have believed us 10% anyway if we have told you that last year. Again, right now we feel quite comfortable with the double digit growth rate.

Unidentified speaker, Analyst: And if Roche is delayed further, is that upside?

Unidentified speaker, CEO or CFO, QIAGEN: The market is 60% unconverted. I don’t think I have to convince anybody about IGRA has a better test. Nevertheless, we’re in a sticky environment, right? It is quite obvious that converting a clinical customer to a new technology takes some time. That’s what we’re doing every day.

It’s clearly also a quite diverse market. As you know, we have everything from healthcare worker testing to army subsets world to legal immigration related work. So it’s also again a different set of customers we have to deal with every day.

Unidentified speaker, Analyst: And I think you’ve talked about how this is very different than the HPV dynamic, right, where everybody shared the same IP, you didn’t necessarily have a lot of automation differences. I mean how do you feel about pricing having Roche when they do enter that market and how do you protect your share?

Unidentified speaker, CEO or CFO, QIAGEN: I think the best answer is probably stating some facts. I think we closed with I would probably say 60 plus percent of our customer in the last twelve, eighteen months new agreements typically going somewhere between three and five years. I’m not recalling anything major with the price discount.

Unidentified speaker, Analyst: And the automation advantage with the DiaSorin partnership?

Unidentified speaker, CEO or CFO, QIAGEN: I think it’s very well known that the LiaSorin platforms are the best platforms in the market, particularly if you go into mid and higher throughput areas. If you will again, I would argue every competitor has a fair chance if it comes to greenfield opportunity, meaning you don’t have any automated solution and you want to have an existing instrument, you want to test it. I think you might use it. At the same time, I think it’s important to understand that if you really want to see us into larger volume, you go for the best platform available. I do think the diazepine platforms are clearly absolutely state of the art and we see they’re quite successful.

Some of you might also follow just a different example, if you go back to their Capital Market Day just a few days away. They fully featured the automated solutions they had, and it’s all on the QIAGEN test. So I would say you can’t get much more endorsement.

Operator: You can see our deep dive. We started a series of TV shows that you can find on our website. The first one was on QDI, the second one was on QuantiFERON, and you hear, like Ron was talking about, you hear directly from Quest about what they’re doing, how they’re automating that test. They’re doing 3 to 4,000,000 at least 3,000,000 QuantiFERON tests a year. They are not a Roche customer, just to point that out.

But to your point, three things that matter to customers: automation, clinical profile, but also total cost of ownership against what they’re going to get reimbursed, where it can make the biggest profit spread. And we’ve really addressed all three of those key issues with QuantiFERON as opposed to what we went through with HBV, which was one test, one machine, targeting one type of group, heavily pushed into The United States. Like Roland was saying, QuantiFERON sales, very complex customer group. You have to address very global tests. We have top automation.

We have a great clinical profile. And we offer customers a very attractive cost efficient test.

Unidentified speaker, Analyst: And is picking a second automation partner an important part of that strategy or no?

Unidentified speaker, CEO or CFO, QIAGEN: It’s an additional angle we can take. And once we have done so, we might inform you about that. But right now, it’s an option.

Unidentified speaker, Analyst: And then I guess last one there, just pipeline. Like you’ve got Lyme, you’ve got some other stuff in development. I mean how important is that to the long term QuantiFERON strategy?

Unidentified speaker, CEO or CFO, QIAGEN: QuantiFERON for sure is the leading franchise there. And as I said, it’s 60% market to existing market, not penetrated, it’s probably also a prime target. Lime is a nice opportunity. It’s also a $300 4 hundred million dollars market opportunity, Clearly, we are looking and waiting for enhancements. So we do expect that the good news is also it is filed with the FDA.

As you know, it’s going with our partner Diazzerene. So we’re waiting for some feedback here. So it is on top.

Operator: Just to remind you, TB, we talk about MRD, all these kinds of markets and big sky numbers. TB today is a 1,500,000,000.0 to $1,700,000,000 market opportunity to convert. And we’re only at $500,000,000 right now. And this is already the biggest diagnostic out there in the world. This is also not a new technology.

It’s been around for at least two decades. It’s just as old as the HPV test, but we’re constantly innovating. We’re working now on the fifth generation of the test, building on what we did with So there’s still opportunities. But, again, this is the market we’re going after.

Unidentified speaker, Analyst: I wanna, Roland, go back to your pricing comment. You know, you talked about it for digital PCR. A, are you able to quantify, you know, how meaningful that price increase was? And then b, what what’s baked into the guide for this year around pricing overall? And where is your greatest ability to push pricing in the portfolio?

Unidentified speaker, CEO or CFO, QIAGEN: I would say in general, as you know, we all during COVID, there was clearly also different inflation scenarios. So I would say most companies, including us, were clearly a bit more aggressive in price increases during COVID more or to keep the balance that we don’t have to carry too much cost by ourselves, but shared fairly with our customers. I think that we did quite well. Therefore, I would argue that this year we probably did it more or less with local inflation rates somewhere between 150 bps. Again, tariffs and again, change the picture a bit as well.

You try to again, you’re also finding the balance on what you can carry and what you can’t carry. So I would say, I would expect here normalization that we stick around inflation rates over time.

Unidentified speaker, Analyst: You know, typically people don’t associate you with the replacement cycle, you’ve started to talk about that a little bit more, I think, in particular around sample prep. I mean, you mentioned at the BofA conference. How how big is that opportunity? Is it starting to to pick up?

Unidentified speaker, CEO or CFO, QIAGEN: I think it’s much more than a replacement cycle. I think what you’re referring to is that QIAGEN is going to launch starting end of this year, probably more important than for ’26, ’3 new instrumentation platforms. I think all three implementation platforms address different segments of the market. While I would say you as many analysts expect that Kaiosh overall has a 60% market share, Tycho is probably also your number, example, We are clearly, for example, not part in all of the segments. In particular, we’re not part of the high throughput segment.

And with the KIA Sprint, which is a new instrument we’re going to launch, we will be the first time move into that segment. So that should be a nice opportunity for us to gain actually both instrumentation revenues, but clearly also a nice consumable pull through. Because I would expect that everybody expect that a cariescent solution into that market should be state of the art. We were waiting for quite some time to move into the market because we clearly wanted to have an instrument which kind of a generational shift. We believe that that is going to come with SkyGen now next year.

So I would say we will update the market more or less moving into the timeframe. The second instrument is for the Mitts Rupert solution. That’s our QIAsymphony. It’s an instrument which we have for many years in the market, couple of thousands. Here a very new QIAsymphony gets launched much more than a facelift, a lot of incremental features.

Here I would expect that while we gain significant instrumentation tailwind, I don’t think it will give us at least at the beginning much more consumable one way because most of the symphonies are clearly utilized today as well. So I would expect there’s more an instrumentation plan and over time probably gaining more consumables. The last one is an instrument which I think we are very excited about is Kaia Mini, it’s low throughput. As you might know, sample prep still the majority of the market is actually a manual test. If you go in a typical lab and it doesn’t matter if that is academic, pharma or any kind of clinical environment, they use somewhere between six, ten, 15 different sample prep solution.

Let’s take QIAGEN’s typical market share of 60%. So let’s say six out of 10, you know suddenly can use automate can automate with a machine, a couple of thousand dollars or breakeven in few months and you can walk away. Quite sure over time you ask yourself why am I buying all my 10 solutions from QIAGEN? I would assume that we have the portfolio. So it should help us to gain penetration into that market, and therefore, drive both consumer growth rate as well as instrumentation growth.

So it is an important step forward for us. It was clearly a couple of years in the market in the making, developing new instruments takes some time. We are quite excited that next year, actually three of them are coming to the market.

Unidentified speaker, Analyst: I know we’re close to time. I guess two quick ones to close with. M and A, you just did the recent bolt on. You did get mentioned in a Financial Times article about a bigger transaction. Talk about, you know, how you’re thinking about m and a, your bandwidth to do bigger deals and anything you’re willing to say on that, you know, situation.

Unidentified speaker, CEO or CFO, QIAGEN: I I think nothing really has changed since 02/2012. We we have a very detailed capital allocation policy which is a combination investing into our business. We feel quite comfortable with 9% to 10% going into our own R and D. I think we have a track record of doing acquisition on everything but enhanced value. We’re happy to look at it.

I think it’s fair to say that in the past we had a mixed set of deals, smaller midsize deal. QuantiFERON is also a good example. When we acquired that in 2012, was clearly a rather tiny company and you gave us a hard time on that. I still recall that, but I think it worked out quite nice. And last but not least, we continue to do share buybacks.

We started with $100,000,000 installments. We then did over the last two years to $300 installments. And we are now going to ask I think week after next week on the AGM to size it up again to a $500,000,000 share buyback. We will continue to drive all three parameters.

Unidentified speaker, Analyst: And then just last one, margins you talked about pulling for that target. Is there any natural kind of ceiling as you think about operating margins? And should we think about 70% gross margins?

Unidentified speaker, CEO or CFO, QIAGEN: I think the nice thing is at it. I would say this year, next year majority as I said before of the growth margin expansion comes from operational leverage. We will see more leverage going forward. But on top of that we will see gross margin expansion. Give you one number which I think is important to realize, as you know, we launched a couple of instruments, QIAstat and others a couple of years ago, QIA Acuity, NeuMoDx.

If I take out these instruments and the related consumables, our gross margin is nicely in the 70s. What does it mean? If you launch a new instrument, typically, you don’t have the utilization on the consumable instrumentation, which again gives you the overall margin impact because typically the instruments at QIAGEN have a 40% to 60% gross margin, but the consumables are nicely above that. So you need a different mix and that of course you’re going over time. And second of course, some of our said that before, production equipment is right now underutilized.

So having also here better utilization is going to help us. So I would say you will see both drivers helping us quite some time. Is any I see companies with a 35% margin in some industries and why not over time.

Unidentified speaker, Analyst: Great. We’ll leave it at that. Thanks. Thanks.

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