The Next Generation for Qiagen NV (QGEN)’s Next-Gen Sequencing?

A fellow Fool who covered that story pointed out that the addition of Life Technologies Corp. (NASDAQ:LIFE)’ genetics products and services to Thermo Fisher Scientific Inc. (NYSE:TMO)’s market-leading equipment sales allows the firm to compete for top market share in the personalized medicine space.  Together, Thermo Fisher and Life share the goal of expanding personalized medicine into emerging medical markets.  Even before the acquisition kicks in, Life Technologies Corp. (NASDAQ:LIFE) is three times the size of Qiagen.  It seems unlikely that Qiagen NV (NASDAQ:QGEN) can provide the kind of genomics ecosystem that Life can, now that it’s under Thermo Fisher Scientific Inc. (NYSE:TMO)’s umbrella.

In fact, Qiagen’s next generation sequencing workflow is not completely self-sufficient, as Thermo Fisher Scientific Inc. (NYSE:TMO)’s now is with Life on board.  Some of Qiagen’s genomics services are dependent on Illumina, Inc. (NASDAQ:ILMN)‘s iScan platform.  As the other major competitor in the genomics market, Illumina’s stock has soared 60% in the last year, raising its market cap to nearly double that of Qiagen NV (NASDAQ:QGEN).

The Ingenuity software may be more powerful for research into genetic networks, but Illumina, Inc. (NASDAQ:ILMN) is well suited for genomic analysis in the clinical setting to advance personalized medicine, and has the resources to continue to innovate.

Qiagen’s acquisition of Ingenuity Systems shows its commitment to achieving goals set forth in its annual report, but it might be too little too late.  Ingenuity’s powerful software may find a place in research labs, but it’s hard to see it contributing significantly to clinical genomics in the way its competitors can.  To be competitive, Qiagen NV (NASDAQ:QGEN) must succeed in the launch of its own benchtop sequencing hardware, expected to be released in 2014.  Without a competitively priced, high-functioning device, Qiagen will remain tied to Illumina, Inc. (NASDAQ:ILMN)’s iScan and won’t achieve its self-sufficient sample-to-results workflow.

Seth Robey has no position in any stocks mentioned. The Motley Fool recommends Qiagen NV (NASDAQ:QGEN).

The article The Next Generation for Qiagen’s Next-Gen Sequencing? originally appeared on Fool.com.

Seth is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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