Dive Brief:
- Qiagen has struck a deal to buy single-cell analysis company Parse Biosciences for $225 million upfront plus additional potential milestone payments.
- The buyout, which the companies disclosed Tuesday, reflects Qiagen’s expectations that artificial intelligence-based drug discovery will drive 10% annual growth in the single-cell market through 2029.
- Qiagen shared details of the takeover alongside news that Thierry Bernard will step down as CEO of the company once a successor is appointed. Bernard became CEO, initially on an interim basis, in 2019.
Dive Insight:
Parse’s Evercode enables researchers to profile gene expression in individual cells at scale. 10x Genomics had already helped to establish the single-cell sequencing market when Parse launched in 2018. Yet with the incumbents requiring scientists to buy specialized instruments, Parse saw an opportunity to disrupt the market with a single-cell process that runs on standard lab equipment.
10x’s Chromium uses microfluidics to isolate cells. Parse’s Evercode adds combinations of DNA barcodes to trace cells, eliminating the need for specialized instruments and supporting the analysis of more cells in a single run. 10x filed a lawsuit against Parse in 2022. Parse invalidated a 10x patent last month.
Qiagen has identified Parse’s technology as complementary to its sample technology and bioinformatic businesses. Bernard said in a statement that the combination will enable Qiagen to give researchers “the tools to generate the massive datasets required to build predictive virtual cell models that fuel AI-based drug discovery.”
Parse has accepted a buyout offer worth $225 million upfront. Qiagen could pay a further $55 million based on the achievement of targets over a multi-year period. In return, Qiagen will gain control of a business that it expects to add $40 million to revenue in 2026 and grow at “a strong double-digit rate.” Qiagen said the overall single-cell market could grow from $1.2 billion in 2024 to $2.1 billion by 2029.
Responsibility for growing Qiagen’s single-cell business will fall on a new CEO. Qiagen’s supervisory board and Bernard have agreed to the timing of the CEO transition. Bernard will remain CEO until a successor is found.
Upon becoming interim CEO in 2019, Bernard inherited a company that was restructuring in response to slow growth in China and the suspension of next-generation sequencing development activities. Starting on what analysts called “clearly a bad day” for Qiagen, Bernard was soon confronted with a takeover bid from Thermo Fisher Scientific and the COVID-19 pandemic.
Having guided Qiagen through the collapse of the Thermo Fisher deal, Bernard oversaw pandemic-fueled revenue peaks and troughs and initiated a restructuring to adapt to the post-COVID-19 environment. The changes have resulted in a business that is on course to grow 4% to 5% this year. Qiagen reaffirmed the forecast after seeing net sales climb 6% year over year to $533 million in the third quarter.
