Qiagen (QGEN) is encouraged by a change in the national guideline for cervical cancer screening in the US. The guideline highlighted the benefits of its digene HPV (human papillomavirus) test as part of cervical cancer screening protection in combination with traditional cytology (Pap test).
The final report of the US Preventive Services Task Force (“USPSTF”) issued a “Grade A” recommendation in favor of co-testing women age 30 to 65 every five years with HPV and Pap tests as the preferred alternative compared to a Pap test alone on a three-year basis. This is different from the draft proposal issued in October 2011, which conferred a “Grade I” recommendation and stated that the benefits of HPV testing needed to be reviewed through further testing.
Qiagen is also reassured by the fact that the Task Force reaffirmed previous cervical cancer screening guidance issued by the American Cancer Society, the American Society of Colposcopy and Cervical Pathology (ASCCP) and the American Society for Clinical Pathology. The guidelines issued by these organizations also favor testing with both Pap and HPV tests compared to Pap testing alone.
HPV is considered to be the primary cause of cervical cancer and Qiagen’s digene HPV test has substantial market share given its reputation of being the “gold standard” in terms of performance and validation. More than 80 million digene HPV Tests have been delivered worldwide since its market introduction in 1997.
Screening of cervical cancer is crucial with 500,000 new cases diagnosed every year and 300,000 succumbing to the disease. Early detection of the disease is key to effective treatment, as cervical cancer can be treated if found in its early stages.
Favorable cervical cancer screening guidelines should enable Qiagen to further strengthen its foothold in the Molecular diagnostics segment, which accounts for 50% of total sales. The company, however, experiences tough competition in the cervical cancer market from Hologic (HOLX).
In the latest quarter, revenues from this segment registered 30% growth. Higher Profiling sales on the back of a global rollout of the QIAsymphony automation platform and increased use of Qiagen’s broad testing portfolio in Europe and other markets outside the US primarily contributed to the upsurge.
Qiagen currently retains a short-term Zacks #3 Rank (Hold), which also reflects our Neutral recommendation on the stock over the long term.
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