Qiagen N.V. (QGEN) Earnings Call Transcript & Summary

Hello, and welcome, everyone, to our Deep Dive event.

And thank you as well for me, for joining us today, and thank you as well for putting up with my hoarse voice.

2020 has been a year of many developments and change for all of us. The COVID-19 pandemic has reached a level no one could have imagined earlier this year, and we've also had quite a year at QIAGEN as well. But in these times, never before has there been such a critical and rewarding time for our QIAGEN colleagues worldwide to achieve our vision of helping to make improvements in life possible.

Today, it's an opportunity to update you on that progress. In particular, we are going to review our strategy, provide a financial update and have a deep dive on our 5 pillars of growth. Let me walk you through the agenda. Here, you see the estimated times for the sessions today. We have 4 speakers as representatives from our Executive Committee. Our first speaker will be Thierry Bernard, our CEO. He will first provide a strategy update and then a review of our COVID-19 response. We will then move into our 5 pillars of growth. The first session will involve a conversation with Thomas Schweins, the Head of our Life Sciences business area. He will discuss sample technologies in the QIAcuity digital PCR systems. After a short break, the second session will involve a discussion with Jean-Pascal Viola, the Head of our Molecular Diagnostics Business area. We will have a discussion on QuantiFERON, the QIAstat-Dx syndromic testing solution and NeuMoDx, our automated molecular testing platform. In the last presentation, Roland Sackers, our CFO, will provide a financial update. We will then have a Q&A session with your active participation.

In the Q&A session, we'll take questions from those of you who have dialed into our conference call. You can also submit questions in the webcast portal. We'll try and address them all as well. The dial-in details to the conference call line are available on the microsite for this event that can be linked from our website, and you can also find the presentations and additional information on that microsite. This includes product information, customer testimonials, all in our 5 pillars of growth. And as a next point, everyone involved here at this event has been tested for COVID-19. We're closely following the local safety precautions.

Before we move on, another matter of housekeeping, the formalities of the safe harbor statement. The discussions in response to your questions on this event reflect management's views as of today, December 8, 2020. We will be making statements and providing responses to your questions that state our intentions, beliefs, expectations or predictions of the future. These constitute forward-looking statements for the purpose of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. QIAGEN disclaims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the U.S. Securities and Exchange Commission. These are available on our website. We will also be referring to certain financial measures today not prepared in accordance with generally accepted accounting principles. You can find a reconciliation of these figures to GAAP in the quarterly presentations on our website.

We have a great program planned for you today. So let's go ahead and get started with a strategy presentation from our CEO, Thierry Bernard. Many of you have met Thierry by now. He took over the helm of QIAGEN as CEO a little over a year ago, although he's been at QIAGEN since 2015. Before taking on this top role, he was head of our Molecular Diagnostics Business area, where he drove strategic advances with QIAstat-Dx, NeuMoDx and also the partnership with DiaSorin around QuantiFERON. Thierry came to QIAGEN with more than 20 years of experience in the diagnostic industry. That included being Head of Global Commercial Operations for another diagnostic company. And indeed, he has global experience with operational positions in Europe, Asia, China and North America. So with that, we're going to turn it over to Thierry.

Thank you, Phoebe. Good day to all of you. We have more than 150 attendees today for this QIAGEN Deep Dive. And I really thank you for your attention and interest in our company. My name is Thierry Bernard, and I am the CEO of QIAGEN. I am very excited today and honored to share with you our strength, challenges, opportunities and ambitions for QIAGEN. We do believe that our portfolio of solution allows us to have confidence in the coming months and years for our company. It is pretty fair to say that 2020 has been quite an active year for QIAGEN. Not only have we been able to step up to the challenge of COVID-19, but we emerged from 2020 as an independent company, as a stronger company with a renewed portfolio of products and without losing any key contributors to our success. For the last 12 months, since I took over the position of CEO, we have systematically met or exceeded the commitments we took to you. I am well aware that today is a very important day for our company. While it feels that you appreciate the solid result and performance of QIAGEN in '20, I believe you still have very legitimate questions. For the first 6 months of the year, for obvious reasons, we were quite silent. But for the last 4 months, we have renewed an intense discussion with you, analysts and investors, and we learned a lot from it. We listened to you. And your questions are: what is really changing compared to 2019? What is Thierry Bernard's vision or strategy for QIAGEN? Are they able to sustain this kind of growth for 2021, but also and perhaps, more importantly, post-pandemic? And can QIAGEN deliver to the promises of this portfolio, not only from a topline standpoint, but also from a profitability standpoint? This is my ambition today, together with Roland, our CFO; with Thomas, our Head of Life Sciences; and Jean-Pascal, our Head of Molecular Diagnostic, to answer those questions transparently with facts and numbers. Let me first remind you all who we are? What is our DNA? QIAGEN focuses on the development of molecular solution. For more than 25 years, the now 5,300 QIAGENers all over the world have been developing, manufacturing and promoting gold standard solutions from extraction and purification of nucleic acids, from PCR to next-generation sequencing, from manual to automated workflows, from life science to clinical application. I believe we have a very well-balanced portfolio for our $1.3 billion of sales in the 9 -- 1st month of 2020 between Life Science and Molecular Diagnostics. I also believe that we have a very well-balanced geographic presence between North America with 45% of our sales; Europe, 35%; and the emerging countries, notably Asia Pacific, China and Japan. We also leverage and benefit from a traditional diagnostic razor blade business model, where the vast majority of our high-margin consumable sales are coming from their application to our installed base. Our company is also driven by an international leadership team with more than 200 years of combined industry experience. And we continue to deepen and expand the expertise in health care, particularly, life science and diagnostic of our Board with the recruitment of ongoing new Board members. Let me come back to 2020. It is fair to say that our company emerged as a stronger company set for solid post-COVID growth. First of all, we have been able to step up to the challenges of COVID-19 by ramping up our manufacturing capacity, our people working 24 hours 7, 3 shifts a day with developing new solutions and launching continuously new products on the market and also retaining our QIAGENers. During this, we also decided to really focus our company into 5 pillars of growth. And this helped us to improve the outlook we gave you for not only 2020, but also 2021 and beyond. This strong year-to-date performance immediately translate into new numbers for Q4 of 2020, for the full year, but also for 2021 and beyond. If you remember for Q4 some weeks ago, we were giving an outlook of between 24% to 27% CER growth, combined with an EPS between $0.58 to $0.60 CER, again. We are now lifting that vision and outlook to around 32% growth of our sales, combined with an EPS of $0.64 to $0.65 CER. For the full year, this translates now into a 22% growth objective of sales CER compared to a previous outlook of around 20% growth, combined with the new objective for our EPS from $2.07 to $2.09 to now $2.13 to $2.14 CER, again. For 2021, we are now proposing a guidance between 18% and 20% CER growth for our top line, combined with the $2.42 to $2.46 EPS objective. This, obviously, translate into a confidence for 2022 post-pandemic, where we believe that our non-COVID portfolio of product continues to have a double-digit growth potential. If I would have 4 major key takeaway messages for you all today, those would be the main ones. The way I see COVID-19 crisis is obviously a tailwind for our companies, but also a fantastic accelerator for the execution of our long-term growth strategy. We move from that crisis with an unwavering focus on 5 pillars of growth, fostering a new culture at QIAGEN, a culture of decentralization and empowerment. Those 3 takeaways will allow you -- us to execute on opportunities for 2021 and beyond with a strengthened portfolio. Let me come back to this COVID-19 impact on our company. Of course, COVID-19 is a tailwind for some of our results, and you see that in our results year-to-date. Fantastic growth from COVID-related solution, but it's not just a short-term, short-lived tailwind. This is also a great acceleration of our model opportunities. First of all, because this is a booster for innovation and new technologies. As for example, now we are launching the so-called prep and amp solution on the market. We will come back to this in more details in our COVID section and with Thomas. But it also an amplifier of our sales of consumable potential with the fantastic acceleration of our installed base. In 2020, we will have increased our placement by more than 3,300 new instruments. I just gave you some outlook for 2021. Let me explain to you our assumption behind our confidence. We first believe that there will be a sustained demand for COVID-related solution at least for the first 6 months of 2021. At the same time, as we have shown in Q3 of 2020, we continue to see a progressive acceleration of our non-COVID portfolios. We obviously welcome the arrival of efficient vaccines. But we believe that the major part of the population in the world will be vaccinated around the summer of 2021. What we do not believe is that vaccination kills testing. There are many examples in health care, proving that a test and treat strategy is the right strategy. Look at flu, for example, we have flu vaccines for many years, yet there are still at least 30 million flu test PCR every year. Look at HPV as another example. There is a flu -- there is an HPV vaccine available on the market, and there is obviously still a significant amount of HPV testing. What is also important to see is that this pandemic crisis has opened new channel of commercialization. Who could have thought, for example, at the beginning of the year that QIAGEN would place some of our PCR solution in airports, for example. And this is why it is extremely important more than ever to leverage this very strong momentum for QIAGEN to really, really focus into 5 pillars of growth. To answer to your question, what is different compared to 2019, for example? I would really insist on this focus. A couple of examples. It started with the reset of our NGS strategy. As some of you might know, QIAGEN is definitely a leader in next-generation sequencing chemistry. But we are not investing anymore into the instrumentation for next-generation technologies. Another example is, for example, our infectious disease's PCR portfolio. You might be aware that QIAGEN is already present in this market with an extended range of assays on our QIAsymphony RGQ solution, a nonintegrated PCR workflow. The PCR collabs market is definitely moving to sample in result out integrity solution. And this is why we are now focusing our infectious diseases presence to fully integrated solution such as QIAstat or NeuMoDx. The third example could be also the focus into commercial execution. We announced a partnership for Lyme 2 years ago with DiaSorin. QIAGEN is not an expert in Lyme, DiaSorin has significant market shares. It is, therefore, much smarter in this cooperation to focus QIAGEN on the development of the solution. Selling it to DiaSorin, they will be responsible for the commercialization, not diluting the focus and attention of our sales force into QIAGEN, core and 5 pillars of growth. This clearly translates into R&D priorities. And as you can see, already in 2021, 60% of our research and development expenses will be focusing on the 5 pillars of growth. This is doubling the effort we did in 2019. Question could be, why is those specific 5 pillars? Why sample tech? Why digital PCR and QIAcuity? Why QIAstat, NeuMoDx and QuantiFERON. First of all, because those 5 pillars leverage a significant level of knowhow and successes from our core business. Second, because those 5 pillars together already capture the majority of the total accessible market by QIAGEN, it's $6 billion addressable by those 5 pillars. Third, because each of those 5 pillars is extremely differentiated and positioned to win. A few example, sample tech where we are already the gold standard of the market and we continue to expand the portfolio of our solution. In digital PCR, we are coming with such a differentiated solution with 3 platforms at the same time, that we believe that we will be a dominating player of this market. On syndromic testing, we come up with such an easy-to-use solution with a growing menu, and this advantage of giving much more than a yes or no answer to clinicians. NeuMoDx in PCR testing is set to bring the simplicity of clinical chemistry into Molecular Diagnostics. And last, with QuantiFERON-TB testing, not only are we already a #1 player, but we are going to expand this market. The last argument is that each of those 5 pillars of growth are already factoring in our business model for the coming years, waves of organic growth. And you could see it quite differently for each of those. The first one, sample tech and QuantiFERON are products we already enjoy leadership position. But the problem of being a leader sometime is becoming arrogant or complacent and not prepare the future. For sample tech and QuantiFERON, our strategies leverage our dominant position but continue to invest. Sample tech, first of all a new application, microbiome, for example, starting next year, but also continuing the automation, each of our main system, QIAcube, EZ1 or obviously QIAsymphony has an upgraded version either already in the market or planned to be launched in the coming 2 years. QuantiFERON, established leader in TB testing. First of all, I would like to highlight that QIAGEN welcomes indeed the arrival of potential new competitors. Why? Because we are convinced that those new competitors will help us to raise the awareness of the added value of testing for latent TB for infectious diseases. Second, because far from being complacent, for the last 4 years, we have already made it extremely difficult to fully penetrate this market. How? First of all, with 2 key partnerships for the full automation of the workflow. As you remember, the partnership with DiaSorin for the back end automation, but also Tecan and Hamilton for the front end. And we will continue to expand the potential of this solution with the development of our solution for low-resources, high-volume country QIAreach. We also, obviously, move into new application with our Lyme partnership with DiaSorin. For digital PCR, the way I invite you to see it is amplify our development to dominate the market. As I said before, we first launched QIAcuity into life science application. We will continue in 2021 and '22 to develop new application for Life Science, but very irrelevant application such as, for example, wastewater on COVID-19, but we will also bring this solution to the regulatory market and transforming it into a clinical diagnostic solution as well. Last but not least, for our infectious diseases positioning, the way I invite you to see NeuMoDx and QIAstat is complete to compete and win. Here, it is a menu play. For both systems, we have ambitious menu development strategy. NeuMoDx already has a set of 14 tests available in Europe. We will bring those tests progressively to the U.S. market, the main market for infectious disease market, texting in the world. QIAstat has already 3 solution available for Europe, respiratory disease, COVID-19 and GI and 2 solutions for the U.S. by extending the menu for the U.S. to GI. And launching meningitis in Europe and then in the U.S., we will cover 80% of the syndromic market need in the coming 2 years. And at the same time, we will launch a new higher throughput system. This solid realistic, ambitious road map will only and also happen, thanks to a significant cultural change. I call it the QIAGEN business mindset. It is all about empowerment. The vision I have for QIAGEN, my management DNA is a culture of execution by accountable and empowered doers. I do not believe in top-down management. I believe in bottom-up and top-down discussion, triggering realistic ambitions. We want to decentralize real decision-making at every level of the company with specific attention to be closer to customers. These new behaviors will strengthen, in particular, the role and accountabilities of countries, region, sales and business as area managers. It fosters the cultures of stronger mindset for sales and profit not just sales growth. I'm driven by transparency in my communication to you, investors and analysts, as well as in my regular direct communication to every QIAGENer. I also believe that manager should encourage employees to stand up and fight for their views and their initiatives. Management should, therefore, understand that some initiatives might fail as long as we learn from them and kill them quickly. I believe in quarter-by-quarter, step-by-step execution rather than fluffy marketing statements. Our portfolio at QIAGEN allows us to have growth ambition, yet balanced with realistic analysis of our environment and challenges. This is why PREmortem analysis is becoming part of QIAGEN DNA and compulsory stage-gate of every development project. Last, we strongly believe in the value of diversity. This starts, obviously, with gender, where QIAGEN has clear quantified target every year, but it goes way beyond gender, in particular, geographic diversity. We need to understand how much the world balance of power is shifting, and this needs to be reflected in our top management team. We have not lost any key QIAGENer in the last 12 months, and 2020 already shows key execution improvement. A couple of examples. A year ago, we took the decision to fully integrate sales, marketing and R&D into our business areas. In fact, in 2020, we just launched QIAcuity, and this integration allowed for a very successful and first 4 months with more than 150 QIAcuity placement in 2020 in 4 months. Second, I believe in the synergies between Life Science and Molecular Diagnostics, both basically developing together solutions with specific application for each of the market. In fact, both BAs came together very quickly in 2020 to develop the QIAprep&amp solution in less than 3 months. I believe also in continuing to invest in commercial excellence. We still have significant commercial opportunities in digitization of our sales activity, but also launching 2 important initiatives; one, transforming customer service and service activities as a profit center for our company; and second, having a much stronger monitoring of our installed base management and installed base profitability. It's fair to say that QIAGEN was probably the only company in this market to be confident enough back in July to give outlook for Q3, but also outlook for 2020 and '21. I believe we are well-positioned beyond 2021. Here, you see that Sample Technology, QIAcuity, QIAstat, NeuMoDx and QuantiFERON will significantly contribute to our objectives of 2021. Still a healthy level of sales for sample technologies, acknowledging that we will decrease, obviously, in sales of manual workflow. QIAcuity, moving from $10 million to $45 million objective of sales; QIAstat from $50 million to $120 million; NeuMoDx from $50 million to $140 million; and QuantiFERON coming closely back to the level we achieved in 2019. But more importantly, for our company and probably to you, is that we really believe that we have a sustainable growth dynamic beyond 2021, post-pandemic. For sample tech probably coming to low- to mid-single-digit CER growth. But for the rest of the portfolio, being between sustainable double-digit or low double-digit as far as QuantiFERON is concerned. This is pretty ambitious that those are solid assumption. As a summary, I strongly believe that with the COVID-19 challenge, which is allowing us to strongly accelerate our perspective of growth, sticking to that unwavered focus on 5 pillars of growth, embarking our QIAGENers into this journey of accountability and empowerment, we are really positioned to execute on opportunities with a much stronger portfolio. And this is why we are confident in our upgrade of our '21 numbers. It is just a matter of execution, and I believe that our company, our QIAGENer are ready for it. Thank you again for your attention. And now it's my pleasure to show you some example on how our company did step up to this challenge. [Presentation]

As you can see in this short movie, it is pretty obvious that QIAGEN and QIAGENers have really stepped up to the challenges of this massive public health challenge. At the same time, we are well aware that the COVID-19 crisis continues to raise questions, the relation between vaccination and testing, for example. I know that some of you sometime wonders whether the portfolio of QIAGEN solution will be able to go along the life cycle of this crisis through 2021. To those questions, our answer is that QIAGEN has probably built the most extensive portfolio of solution against COVID-19. We have indeed developed products to support every kind of patient situation and every phase of the COVID-19 pandemic. But more importantly, none of those solutions are short-lived and strictly COVID-dependent. I would like first to highlight a generic remark, but a remark very important for our industry. The COVID-19 crisis is definitely proving and confirming the relevance and importance of testing in the health care value chain. But more importantly, for QIAGEN, the superiority of molecular testing in diagnostics. QIAGEN addressing since February of 2020, this pandemic had a clear strategy, one, of leaving no country behind. And second, and I said, building a very comprehensive set of solution. I know that some of you are wondering whether the QIAGEN portfolio has some weaknesses or is too exposed to that crisis. This is not our belief. On the contrary, the way we invite you to look at is that QIAGEN has probably built the most extensive, comprehensive portfolio of solution for COVID-19 testing, covering different situation from a patient standpoint, but also relevant for every life cycle of this pandemic. Consider a patient from asymptomatic suspected or infected by COVID, you will see here in this slide that we have a solution for every patient situation. Asymptomatic testing, suspected patient PCR testing and vaccination and post-vaccination testing. And the next slide is showing you the breadth of this solution from RNA sample technology to PCR testing, syndromic mono-plex, short-plex to antigen, antibody and T-cell testing, not to forget that QIAGEN is a key player as well in providing other companies active in the fight against coronavirus with key components such as enzymes, for example. I do not want to cover in details we have communicated in 2020. But please allow me to highlight 3 major innovations. The first one is currently being launched is what we call the QIAprep&amp. Many companies are saying that they are trying to launch extraction-free solution. This is not QIAGEN play. QIAGEN with QIAprep&amp is launching a very innovative liquid-based sample prep protocol with key added value. First, very fast, 2-minute sample preps, 1 hour maximum time to result. Second, not really consuming some problematic raw materials for other kind of testing, especially plastic. Third, very flexible, you can use this solution with any kind of liquid handling station all over the world, and you can use it either with the QIAGEN PCR assay against coronavirus or any other kind of assays. This is currently being launched, but it's not just addressing COVID-19. The potential of that applications are numerous. First of all, flu, obviously, or the combined application flu and COVID-19 for next winter or also any other respiratory viral infection. Another significant innovation in our portfolio for COVID is what we call QIAreach. Coming from our partnership with the Ellume, Australian company. A solution for antibody and antigen testing. It is also a direct translation of our focus. We did not dilute the portfolio of QIAGEN with an investment in an antigen or an antibody solution. We leverage a project that we announced 2 years ago with Ellume to develop low-resources countries, high burden for TB solution. And this is exactly the same format of test, chemistry and reader that we are using for antibody and antigen COVID-19. As a result, we are coming to the market and progressively launching in the U.S. and then in Europe, probably the fastest available antigen solution result between 2 and 15 minutes, the easiest to use battery-operated portable hub. And more importantly, what we call a digital solution, traditional rapid test immunochromatographic format are depending on a technician reading visually the result. On this solution, the results are provided electronically. And as you can see, we will progressively extend the claim of this product with a nasal swab and then a point-of-care claim. Importantly as well, beyond 2021, this portable hub will receive our TB testing solution. And last but not least, and potentially very important for the coming months, the launch of QuantiFERON SARS-CoV-2 RUO T cells. Why does it matter? Because testing for vaccine efficiency, testing for the evolution of the immune status of the patient is probably going to be more and more relevant our vaccines are coming to the market. You have probably seen recently many analysis and publication showing that T cell evolution is probably lasting longer than just antibody reaction. I said in my previous presentation that our business model for 2021, factors that, yes, vaccines will be available. But the wide part of the population will probably not be vaccinated before summer of 2021. And this is clearly shown by external analysis, as you can see, for example, in this slide, where you see that the peak probably of vaccination will start during the summer or for some analysis even Q3 of next year. What does it mean? That as we have said, probably COVID-19 testing will slightly decrease post H2 of 2021. But does it mean that vaccination kills testing, not at all. If you take, for example, the example of flu, we have flu vaccines available on the market for many years, yet every year, every winter, around 30 million of PCR flu testing are sold. As a conclusion, yes, indeed, COVID-19 is helping the performance of our company in '20, but it's not just a tailwind. It's accelerating our potential growth expectation. It has allowed QIAGEN to launch an impressive number of new innovative solution, 10, this year, but more importantly, none of those solutions are strictly COVID-dependent. As a conclusion, QIAGEN proved in 2020 and will continue to prove in '21, that we are an extremely relevant company to fight, again, this massive public health challenge, but we are not depending on it.

Thanks, Thierry, for the insights. So as Thierry mentioned earlier, we have a focus on 5 pillars of growth, which we want to dive into today. We're going to take a quick break, and then we'll be right back to start off with the life science pillars of growth. [Break]

Hello, and thanks for joining us to learn more about our Life Science solutions. I'm here with Thomas Schweins. He's Head of our Life Science business area. Thomas, how are you doing today?

Thanks, Phoebe. Great being here.

Great. So let's get started. First of all, our Life Science products make up half of our total revenues at QIAGEN. Why don't you tell us a little bit about how this large portfolio is structured, how the products fit into different areas.

Sure. You can think of the Life Sciences portfolio in 3 categories: sample technologies, assay technologies and bioinformatics. This is along the workflow from obtaining DNA and RNA from a biological sample and then the process all the way through to analyze interpreting the results. Let's start with sample technologies. The first step in any workflow is to collect a sample and to extract DNA, RNA or proteins of interest. Here, we sell a complete portfolio of kits and instruments. This is where we hold a leading market and technology position. The next category involves assay technologies. There are different ways to analyze samples. Some examples would be PCR or next-generation sequencing. We have a competitive offering in these areas and the highlight is our recent launch of QIAcuity digital PCR. Finally, customer often wants solutions to analyze, interpret genomic data. Here we have a compelling offering, QIAGEN Digital Insights. This is a portfolio of bioinformatic solutions. These data sets are often so massive that they are beyond human comprehension.

Okay. So it sounds like we have a lot of solutions in this area of Life Sciences. But let's talk about some of our focus for the next couple of years. We have a focus on 5 pillars. 2 of those pillars are coming from Life Science. Let's start with sample technologies. Can you tell us a little bit about this market? And what's our position in this market?

Sure, Phoebe. The base of our Life Sciences business comes from our work in sample technologies. This is the foundation of QIAGEN, where it all begun and where we built our brand reputation years ago. We believe that 70% of all Life Sciences customers buy at least 1 QIAGEN sample technology product a year. And service show, QIAGEN has over 90% awareness as a top supplier in this area. QIAGEN is known for dedication to quality expertise and being at the cutting-edge of science. Our strategy is to secure the position by investing in innovation. We use sample technologies as a foundation to extend our presence into other areas of our portfolio. Sample technologies is the basis to make our overall business even stronger. Before the pandemic, we saw that this is a $750 million market opportunity, growing at about 3% to 5%. COVID-19 has clearly changed the market dynamic and has helped us tremendously in 2020. Just look at the search instrument placements. We'll see what lasting impact that has in the coming years, but this market is now clearly over $1 billion.

Okay. So it's a large market, and QIAGEN was first to market in this area of sample preparation. But now there seem to be a lot of competitors. How does QIAGEN continue to win over these competitors? Why do customers choose QIAGEN?

Yes. Our strength is the breadth and depth of our portfolio. It's not about a single product. We are known for being able to address the complete range of biological samples. We also offer a broad range of processing options with our instrument portfolio. This is led by our flagship platform QIAsymphony. We expect to place more than 2,000 sample prep instruments only this year. We have new instruments in development and are working also on life cycle management for QIAsymphony. We just launched a new version of QIAcube in 2019 and other competitive advantages that we continue to innovate. Just 1 example, liquid biopsy. We have developed products for use and gaining insights from a blood sample instead of relying on a tumor biopsy. Let me turn over to my colleague, Michael Kazinski, in the apps lab.

Thank you, Thomas and Phoebe. My name is Michael Kazinski, and I'm responsible for QIAGEN's Life Sciences sample technologies portfolio. These products are used to isolate nucleic acids, DNA and RNA from biological samples. QIAGEN is the market leader in sample technologies. We offer the most comprehensive portfolio of nucleic acid isolation solutions for both DNA and RNA. All products come as research use only products or are being part of regulated diagnostic outflows. And then it can be used in a manual or an automated fashion. The sheer breadth of our portfolio with over 500 product SKUs allows us to really address many biological applications and biological samples our customers use. This starts from human blood, cells and tissue, forensic samples or challenging samples like wastewater and soil samples. As you know, the breadth of our portfolio and our experience and knowhow in nucleic acid isolation, specifically in RNA allowed us to instantly and impactfully contribute to fighting the corona pandemic. Automation becomes more and more important, not only in high, fruitful screening centers, but also in standard and small and mid-sized laboratories across the world. QIAGEN offers a significant portfolio of automation solutions. And I would like to introduce you to 2 of our instruments like QIAsymphony and QIAcube Connect. Let me show you the QIAsymphony, one of our flagship products for automated nucleic acid purification. We already sold over 2,700 instruments worldwide. Customers love the flexibility of this instrument. It has an easy-to-use interface. And one of the major advantages is that you can load new and additional samples at reagents while actually the process is up and running. The system uses mag bead-based technology, disposable and pre-fit cartridges. This actually allows for further reduction of errors just due to human intervention. Next, let me show you the QIAcube Connect. One of our other flagship instruments for automated nucleic acid isolation. It's actually the only instrument which can take a manual nucleic acid isolation process and seamlessly transfers it into an automated process. The biggest advantage is that the system can use our kits without any adaptation. So customers who are used to use our products in a manual way can automatically transfer this process into the machine. There's another instrument, which allows us for even higher throughput processing. It is called the QIAcube HT. Together, both instruments are sold more than 8,000 times already. Customers love the flexibility of the instruments. And its connectivity features allow customers to remotely control and observe the instruments while in operation. QIAGEN is most trusted brand when it comes to nucleic acid isolation. Customers love the quality and reproducibility of our results. And this is backed up by more than 200,000 applications citing QIAGEN sample technology products worldwide. Many of them coming from Nobel Prize winners. And therefore, I'd like to hand over back to Thomas and Phoebe.

So let me pick up on the topic of instrument placements. During the pandemic, there have been some interesting trends. Can you tell us a little bit about those?

Sure. We have clearly seen a surge in instrument placements during 2020 to support the pandemic response. At the same time, many Life Sciences and Molecular Diagnostic customers not involved in COVID testing have a challenging year. We have many reasons to believe that these customers have fanned up instrument demand. We've also been seeking to ensure that instruments are placed this year with customers who will create longer-term consumer demand beyond COVID-19 testing.

Okay. So looking forward, can you tell us a little bit more about your ambitions for 2021?

Sure. First of all, I want to reiterate that we are the market leader in sample technologies. The pandemic has helped us to accelerate our leadership position. We were clearly among the first to react to the surge. We have significantly scaled up production, and we also launched new products like, for example, QIAprep&amp. We believe that COVID-19 testing will remain high for some time, but not necessarily as high as the surge in 2020. And the non-COVID demand is going to return to a good growth pattern. A good proxy for that is the NIH budget in the U.S. that we expect to rise about $5.5 billion in 2021, and we also see healthy increases planned for Europe.

Great. So there's a good long-term growth outlook for sample technologies. Good to hear. So let's shift gears a little bit now and go into the second pillar of growth in Life Sciences. That would be QIAcuity digital PCR. That product is just launched. Why don't you tell us a little bit about how the launch is going?

Yes, sure. This is the really exciting launch. QIAcuity is a complete offering for labs to gain access to digital PCR. This is a very powerful technology to analyze DNA and RNA for a wide range of applications. Right now, it is mainly in research, but it's going to move for sure into clinical health care in the future. QIAcuity is more than just a series of 3 instruments. This portfolio also includes a complete set of enzymes and nanoplates. It also includes the ability to create millions of different assays for specific customer needs. And we have linked this to our GeneGlobe hub for gene analysis. The response so far has exceeded our initial expectations, and we began commercialization in August, and the first shipments were made in October. We'll sell more than 150 instruments this year only. So the launch is going quite well. We have Wolfgang Leibinger in the lab. I will let him introduce the new platforms.

Thanks, Thomas. Thanks, Phoebe. My name is Wolfgang Leibinger. I'm responsible for the PCR business at QIAGEN in the Life Science business area. This is a very exciting time for all of us. We have launched a series of new digital PCR platforms; the QIAcuity 1, the QIAcuity 4 and the QIAcuity 8. The QIAcuity 1 uses 1 plate; QIAcuity 4, 4 plates; and the QIAcuity 8, 8 plates. All these systems are able to multiplex 5 different targets. And they are fast. Our workflow doesn't take more than 2 hours from beginning to end. Also the systems doesn't need a lot of lab space. They are pretty compact. And finally, they have a really high throughput capability. For example, the QIAcuity 8 plate can process up to 1,260 samples in a single shift. Unlike our competition, we are not using water, oil emulsions or droplets to create partitions. We are using nanoplates. These plates have thousands of fixed partitions. This prevents actually that there is a variation in the size of each partition, but it also allows that all the partitions can be read out simultaneously. And this is a big, big advantage because it increases the speed. Our competition is using droplets, and you have to read every signal in every drop after one each other. Here, you can take a photo of the complete plate, and you have a simultaneous readout of the complete plate at once, and that's a big advantage. Setting up the nanoplate is as easy as for any PCR experiment. You can also easily use any liquid handler for the plate setup. After you have set up your plate, you just open the door of the QIAcuity, put in your plate, close the door, and then you can watch the process of your experiment on the display. QIAcuity is backed up by a wide range of assays that can be configured on GeneGlobe. Geneglobe is our end-to-end tool that customers can use to configure gene or pathway specific solutions. The number of assays that can be configured in GeneGlobe for the use on QIAcuity is endless. Our ambition is to enable the use of digital PCR as a standard in every laboratory worldwide. Life Science is our first target, but we are also developing clinical applications. We will take share in the digital PCR market, but we will also help to adopt this technology in laboratories where customers have not been receptive for digital PCR so far. Why is that the case? Because so far, the solutions that are outside are too complex and they are too highly priced. We can actually overcome those challenges in the market with our QIAcuity system. Thanks for this opportunity to introduce you to QIAcuity. And with that, back to Thomas and Phoebe.

Thank you, Wolfgang. That was a very good overview. So Thomas, it's an exciting market for digital PCR. Why don't you tell us a little bit about the market?

Sure. We see the current digital PCR market at $300 million, growing at about 20% a year. This is already a big market. But the real opportunity is to change the landscape of PCR testing. We are targeting conversion of a portion of the over $2.5 billion qPCR market. About half of all applications could move to digital PCR in the longer-term.

So why do you think that so many customers will change from qPCR to digital PCR?

There are a number of applications that can only be done with digital PCR. For example, you can use digital PCR to quantify targets in absolute terms. It is also much more precise in various applications. An example is analyzing cancer cells in the background of normal cells to find very rare mutations. Another example is that digital PCR is very powerful for wastewater testing. This is becoming important for COVID-19 testing. It can be an early warning for outbreaks. We are preparing a digital PCR test for early 2021 release for use in wastewater COVID-19 testing. We have so far seen significant uptake among our academia and pharma customers, but we want to also move into clinical applications. We want to get CE-IVD marking in 2023, and we are also working on the FDA road map. So it's a really attractive sizable market opportunity.

So speaking of the market and customers moving from qPCR to digital PCR, how can QIAcuity speed up this process?

QIAcuity is just as simple to use as qPCR. The technologies are very similar in many ways. Both use the same sample technologies. Both are plate-based systems, and both rely on the same chemistries. And any lab worker who can work with qPCR can also quickly use QIAcuity.

Okay. So then looking forward into 2021, what are your expectations for QIAcuity?

Well, we are expecting to finish off 2020 with about $10 million of sales. Our goal in 2021 is $45 million of sales. And we are aiming to secure more placements than the established competitors already in 2021. You will also see us introduce new applications, like I just mentioned, the COVID-19 test. We have a great opportunity with QIAcuity. It is important to stress that the portfolio is already in place and now it comes down to market penetration and developing the customer base.

Okay. So indeed, an exciting start for QIAcuity. We look forward to seeing the progress on that one. So thanks, Thomas, for joining us today and giving us some insights on this Life Sciences growth pillars. We will see you soon in the Q&A session. And thank you for joining us today. We are going to take a quick break, and then we'll be back in a few minutes to talk to you about the next 3 pillars of growth in the Molecular Diagnostics business area. [Break]

Welcome back. Now we're going to dive into our remaining 3 pillars of growth, which are part of our Molecular Diagnostics portfolio. I have with me here Jean-Pascal Viola, who has recently taken over the reins of our molecular Diagnostics business area. JP, thanks for joining us today. How are you doing?

Thanks, Phoebe for the introduction. I'm doing great.

JP tell us about the 4 buckets that the Molecular Diagnostics business is broken into?

First is our immune response franchise built around QuantiFERON. This product is leading the market for modern latent TB testing. Second, there is our infectious disease business, where we offer integrated PCR platforms such as, as the QIAstat-Dx and NeuMoDx. Next is our precision medicine portfolio, where we offer a mix of oncology assays and companion diagnostics that are used to help guide treatment decisions for patients. Last but not least, comes our LDT solutions portfolio, build around instrument and consumable, especially sample preparation on QIAsymphony for labs who want to run their own in-house assays. All these are addressing solid markets with strong growth. As Thierry mentioned earlier, it's fair to remind you that COVID crisis has made the molecular testing market more relevant than ever.

Okay. So let's get started with our pillars. First of all, there's QIAstat-Dx, which has been recently highly used in respiratory testing, especially as the flu season has come on top of COVID. Can you tell us a little bit about the syndromic testing market and where QIAstat fits in?

We first entered the syndromic testing market in 2018 with the launch of QIAstat-Dx in Europe. This technology was acquired from Stat-Dx and was developed based on QIAGEN sample preparation and assay technologies. The syndromic testing market is now north of $1 billion with about 15% CAGR. QIAstat-Dx has been well received by the market. It is small and scalable, and you can connect up to 4 analytical modules to 1 operational unit, meaning a lab can run up to 4 assays at a time. This is great for near patient testing in small-to-midsized hospitals. One of the key differentiator is that you need less than 1 minute of sample preparation, and then you get results in about an hour. As Thierry mentioned, we are seeing more and more testing in nontraditional settings, such as airports, cruise ships and even sports teams. The ease of use is enabling more the near patient testing. How about we go to Ricard who is standing by in Barcelona to show us how the Stat-Dx works.

Thanks, JP, and everyone, I'm Ricard Martin, Senior Global Product Manager at QIAGEN. And today, I'm proud to explain you how QIAstat-Dx, our next generation of Syndromic Insights is helping healthcare professionals all over the world. This QIAGEN technology called QIAstat-Dx can be used by any sort of healthcare professional, and it just requires 1 minute to prepare the sample, avoiding the fact of sending samples away, and therefore, accelerating, thus reporting patient's treatment and isolation measures. The end-user just needs to insert the sample into the cartridge and run the test by selecting the sample ID, then the patient ID. After that, the end-user just needs to scan the cartridge type, select the sample ID and nothing else than that. At this point, the end-user is ready to load the cartridge into the analyzer. And in just 1 hour, results are directly shown on the graphical user interface, providing full detail of a whole panel of more than 20 targets at the same time. Apart from that, end-users can really check CT values and end-point florescence directly on the graphical user interface in order to get additional insights on patient results, and therefore, take more clinically oriented actions. So as you can see, this is a great solution in order to provide our customers with fast, accurate and comprehensive answers the very first time of testing. The QIAstat-Dx Syndromic Testing platform has become definitely a key asset during the COVID-19 pandemic because it can detect the SARS-COVID-19 virus in just 1 hour using real-time PCR and along with the full panel of other targets at the same time. The QIAstat-Dx market penetration has been impressive so far with over 1,800 placements worldwide. Apart from that, we are already looking into the future, and our R&D teams are already expanding our menu and also while our instrument teams are providing and are developing new technologies and solutions when it comes to connectivity. We can tell you that this is going to be a key asset and a key differentiator for our customers in order to retain customers loyalty, but also in order to provide them with more benefit and with more solutions. Our global presence and manufacturing capabilities are really helping us expand our testing volumes in recognition of the current and also future success of the QIAstat-Dx system. We currently have 2 manufacturing lines, 1 in Barcelona and 1 in Hilden, Germany. However, in the future, we are going to have another line in Barcelona and another 1 in Hilden. So as you can see in the coming years, QIAGEN is going to increase our manufacturing output by investing in more manufacturing, R&D and sales capabilities. We hope that you like the QIAstat-Dx system and that you feel as excited as we are for the bright future of the QIAstat-Dx solution in the coming years. Many thanks, and back to you, Phoebe and JP.

Thanks, Ricard. Okay, JP. So Ricard talked about manufacturing scaleup just now. Can you tell us a little bit about your plans for scaling up production for QIAstat?

So far, the menace is still outpacing our ability to produce test cartridges, and we are continuing to work to upscale our manufacturing. First, let's cover instruments. During the COVID crisis, we have seen great demand for instrument. We have no real limitation on being able to manufacture and sell instruments. Regarding cartridges, we are still early stage of ramping up production. Demand is clearly higher than what we can supply. But as Ricard mentioned, we are expanding capacity in Barcelona and Hilden. We have ramped up production in the fourth quarter of 2020 and already doubled our output from the start of the year. Our plan is to now double this level again by mid-2021. This will enable us to support even more and more instrument sales in 2021 and the year to come.

Okay. So speaking of instrument sales, this year, the pandemic has accelerated all the syndromic testing instruments. So how will customers choose QIAstat over other instruments moving forward?

There are several differentiators, but 2 main things are setting us apart. First, our test can be prepared in less than 1 minute. And for our CE-IVD respiratory panel, you can even stick our swab directly into our cartridge, break it off, close the lid, and you are ready to go. And by the way, our cartridges are ready-to-use stored at room temperature, so no need for cold storage or even to add water to reconstitute them. Second, QIAstat provides more than just a yes/no answer. For example, a customer can access CT value. In general, for PCR, CT value can be correlated to pathogen load that can be helpful in patient management. This is especially relevant for immunocompromised pediatric elderly population as well as critical care setting, like emergency room and intensive care units. By the second half of 2021, we'll have a complete core menu to address the bulk of the syndromic testing volume in the U.S. and Europe.

Okay. JP, why don't you tell us more about menu expansion plans for QIAstat?

Let's start with Europe. In 2021, we are planning to launch the meningitis panel in addition to our respiratory and gastrointestinal offering. This will complete our core menu in the European market. This is key to address those labs that require all 3 panels. In the U.S., we also have a respiratory panel approved that covers COVID. Respiratory testing is about 70% to 80% of the market demand in the U.S., if not more, now with the pandemic. We are also going to complete our core menu offering in the U.S. We plan to submit gastrointestinal and meningitis panel to the FDA in 2021. Beyond the core menu, we are planning to expand our offering into other infectious disease with panel for pneumonia, blood culture ID and urinary track infections.

Okay. Then looking forward, what do you expect for QIAstat in the next year or so?

Well, we've seen accelerated placements this year and expect to finish the year with over 2,000 placements. That's giving us a nice boost and installed base growth. We expect to end 2020 with sales of about $50 million. For 2021, we are expecting demand for the respiratory panel to continue through winter, where seasonal flu will come on top of COVID. We have now set a target for more than $120 million in 2021. So that is, again, strong growth. A key driver is going to be demand for respiratory panel as part of the pandemic. Looking post-COVID, we still see strong demand for respiratory testing as the market shift to influenza-like illness or ILI testing. This is where QIAstat-Dx can be very useful to properly diagnose and treat patients presenting with ILI symptoms, especially in decentralized setting. Also, we are working on a couple of new developments: one, launching unique connectivity features like remote monitoring; and second, we are developing a high throughput version of the QIAstat-Dx. It is planned to launch early 2022.

Great. Nice to hear about a new high throughput virgin coming out for QIAstat-Dx. So then let's move now to the next pillar of growth. That would be NeuMoDx. We just completed the acquisition for the remaining 80% of the company in October. What can you tell us about the rationale for that acquisition?

When talking about clinical labs around the world, there are 3 important challenges that they've shared with us. First of all, it was clear that their clinical testing volume keep on increasing, especially through in COVID times. What they want is an easy-to-use system where they can load and unload samples at any time, walk away and let the system do the work. Second, they want to get result back to clinician as soon as possible. A faster turnaround time is very important for them. Third, they are looking to have a broad menu of tests available on a single system. This is exactly what NeuMoDx is addressing. It is a new generation of Integrated Molecular Diagnostic solution based on microfluidic technologies. Our team are working full speed to fully integrate NeuMoDx into QIAGEN, even with the constraints of the pandemic.

And how about the commercialization? How is that going?

Regarding commercialization, we had a head-start in Europe where we are distributing the products since 2019. The priority is now to integrate NeuMoDx into our existing sales channel in the U.S. and expand the test menu. Now we have a truly global product. We can go after a $3 billion market opportunity, growing at 7% to 9%. Why don't we ask Julia, who is standing in the lab to give us an intro on the system.

Thanks, Phoebe and Jean-Pascal. Hello, and welcome to the application lab here in Hilden. My name is Julia [indiscernible] , I'm a senior application specialist, and I'm working on a NeuMoDx system, which is an automated molecular diagnostic platform. And I would like to introduce you to this innovative, scalable platform that integrates the complete molecular diagnostic process basically from sample to insight. NeuMoDx represents the fastest and simplest next-generation PCR clinical testing. It was launched in the late 2018, and then since then, it has been proven to be highly efficient and flexible. And this could be proven also during the COVID-19 pandemic, when laboratories worldwide tested patient samples. So this system comes in 2 versions. The 288, which is a high-throughput version, and it can handle up to 340 samples during a normal 8-hour shift. Whereas the 96 system, which is a mid-throughput system, this can handle up to 145 samples within the same period of time. So the NeuMoDx system offers a growing menu of in vitro diagnostic tests, along with the ability to test LDTs. Let's have a view at the other differentiators. First of all, rapid actions to result in less than 1 hour compared to up to 3 hours for other competitors. This means that up to 40 samples can be processed in less than 1 hour. The walkaway capability for the 288 system is up to 8 hours. So this ensures free capacity for lab workers and also onboard stability for the reagents. It doesn't require refrigeration. So all the consumable and reagents are room temperature stable. So you can test up to 20 assays on the 96 and 30 assays under 288 system. So let me show you how the system works in 3 easy steps. So first, you would load your samples in the sample carrier. Then you would load your reagents and consumables like the test strips, the lysis buffer, pipette tips, the extraction plate and the cartridge. And then you press load on the software screen. So then the system automatically scans the barcode of the reagents and the sample, communicates this to the LIMS and then that system automatically starts to process the samples. After the run, the results are then delivered back to the LIMS. Thank you for this great opportunity to introduce you to NeuMoDx. And now back to you, Phoebe and Jean-Pascal.

Thanks, Julia. Great to get a view of the instrument there in the lab. So JP, Julia talked about a lot of different benefits that the platforms have. Maybe you can hit on the key top 3 differentiation points.

Well, one of our current customer told us that it is as easy to use as a clinical chemistry analyzer. You load your sample and you walk away. Let's go through the key differentiator. First, it is easy to use. You can have up to 30 assay on board with random access capabilities. All these are room temperature stable and do not require reconstitution steps. Second, speed. For other systems out there, you have to wait 3 to 4 hours to get your first result. With NeuMoDx, you get it in around about 1 hour. There is even a stat function that allows you to prioritize an urgent sample. Third, flexibility. For some labs, a sizable portion of their tests are LDTs. This is how they can differentiate themselves with unique content. We have an LDT channel with a great protocol wizard to help them easily set up their LDTs that can be run next to our standard menu.

And speaking of menu, we are planning on rapidly expanding NeuMoDx menu. Can you tell us a little bit about the plans for that?

In Europe, we already have one of the broadest CE-IVD menus with 14 tests available. These can be split into 4 categories. First, our respiratory offering, which is made of our COVID test as well as our flu, COVID, RSV combo. Second are the big blood-borne viruses; HIV, Hep b and Hep C. Third is our menu for transplant. And last is our test covering women's health topics. In the U.S., we already offer a COVID-19 test, and the system is FDA approved. We have also just submitted for an EUA for our 4-plex test that includes COVID, flu and RSV. We are investing heavily to further accelerate our menu in the U.S. In 2021, we are planning the FDA submission for CT/NG. Then in 2022, we're planning an additional 7 submissions that will cover all 4 segments I mentioned earlier.

So currently, a lot of NeuMoDx systems are being used for COVID testing. But as you mentioned, there's a wide menu that can be used post-pandemic. So what are your expectations on performance for NeuMoDx in the coming year?

The placement have been great in 2020, and we are ahead of our plans. This is obviously due, as you mentioned, to COVID. We expect to finish 2020 with over 130 cumulative placements and sales of more than $50 million. Regarding 2021, we're expecting more instrument placement with the combination of COVID testing and a greater utilization of non-COVID tests as we move into the second half of the year. This should allow us to reach more than $140 million in sales by 2021. As a reminder, in Europe, NeuMoDx is well-positioned post-COVID with one of the broadest menus available. And in the U.S., our customer will be able to benefit from the combo flu, RSV test, which will be used to test influenza-like illness, especially in the 2021 winter respiratory season. And remember, our customer around the world will also be able to leverage our LDT capabilities.

Okay. Good info on NeuMoDx. Sounds like it's got good momentum going forward. Now let's move into our last pillar of growth. So it may be the last, but it's certainly not the least, that would be QuantiFERON, which is about 20% of our total sales. That's our leading latent TB test. So what do you see as the market for QuantiFERON? And where does QuantiFERON fit in?

QuantiFERON is the basis for our immune response franchise. The focus, as you mentioned, is on latent TB testing. It is estimated to affect about 1 in 4 people worldwide and is a condition without symptoms. Finding these cases is critical to eradicate TB. We offer the leading blood test for detection of latent TB. Our main competition is the 100-year-old skin test. QuantiFERON-TB has many advantages over the skin test. You need only 1 visit. Results can be generated in less than 24 hours, and we offer very high sensitivity and specificity. We see the latent TB testing market as a $1 billion opportunity with only 20% to 25% conversion to modern blood-based test. So there is more than enough room for us to grow. We have Linda in our lab in Germantown, Maryland, to tell us more about QuantiFERON.

Thanks, JP. Hi, my name is Linda Betroune Lecomte. I am responsible for global marketing of our immunomonitor franchise, in particular QuantiFERON. I would like to introduce to QuantiFERON, our proprietary technology enables detection of infection, especially tuberculosis infection. Latent TB can be detected through the use of 120-year-old skin test or through the use of the modern blood-based test such QuantiFERON-TB Gold Plus. About 70 million of latent TB tests are done annually. Only 25% of these tests are done with the blood test. This is leaving many growth opportunities. The strong push for TB prevention will increase the demand for latent TB testing. Our QuantiFERON-TB Gold Plus is considered the gold standard for TB infection. It is a simple blood test to detect the immuno response from the TB infection. The accuracy and the simplicity of our test differentiate us from the competitors. We have 3 versions of our QuantiFERON test. The first version is ELISA lab test. The second version is automated CLIA QuantiFERON developed with our partner DiaSorin. And the third version is QIAreach TB in development with our partner Ellume. It's the same technology used for our COVID solution for antigen and serology. And this is making TB test portable, especially developed for the high-burden country, low-income country unable to increase access to care. Customer using the single tube option can also work with other automated solutions provided with our partner Tecan and Hamilton, allowing to automate the transfer of the blood from 1 single tube to QuantiFERON strips. Results are available within 24 hours and only with 1 patient visit. Public health authorities are working to eradicate TB by 2035. But unfortunately, the COVID outbreak has set back all the initiatives by many years. So there is an urgency to increase TB testing. QIAGEN is fully committed to be part of this forward solution in eradicating TB. Thanks for the opportunity to introduce you QuantiFERON. And now back to you. Thank you.

Thank you, Linda. Okay, JP. So Linda mentioned the new QIAreach test. That's about to launch in 2021. Tell us about the launch and your expectations behind it?

This was developed on the compact hub with a digital readout for up to 8 tests in parallel that can even run on battery power. This is planned for CE-IVD marking in early 2021. We want to support latent TB testing in high-burden, lower-sources area. We now have a way to support customers in multiple market segments, industrialized countries as well as low resources region.

Okay. And then there's another new launch coming up that's for QuantiFERON Lyme, and that was developed in cooperation with DiaSorin, right?

That's right. The test should be available in Europe early 2021 and in the U.S a year later. We see this as a $400 million to $600 million market opportunity. DiaSorin is responsible for commercializing the test and already has 2 Lyme tests that can be used along with QuantiFERON Lyme. This combination will enable early detection capabilities not possible today.

Okay. So let's go over to competitor landscape now. We've heard there's a test coming out from a competitor that's also automated. How will this impact QuantiFERON?

This test would be on the low throughput platform, which has been on the market for many years. We have a very differentiated profile and are targeting different markets. QIAGEN is focusing on mid- to high-throughput labs, and we are now targeting markets for emerging countries with QIAreach. For the mid-to-high throughput labs, we offer complete automated workflow options with our partners, DiaSorin, Hamilton and Tecan. This is really important for our customer given the testing volume that they have to process. We are talking about millions of tests that we sell every year. With this workflow, we are leveraging DiaSorin installed base of more than 8,600 platforms worldwide. Also important to mention, we have the experience and the clinical data. More than 65 million people have been tested with QuantiFERON-TB since we have launched. Last, but not least, again, only about 20% to 25% of that annual latent TB testing market has been converted to blood test. So having another voice to drive conversion will help us as well.

On the topic of growth, sales for QuantiFERON were hard hit this year due to the pandemic. So where do you see sales for QuantiFERON moving into 2021?

Lockdowns and focus on COVID have reduced latent TB testing. For 2020, we saw a decline in our latent TB sales. The good news is we started to see sequential recovery for that segment of the business in Q3. For 2020, we expect $180 million to $190 million in sales. This was a decline from $240 million in 2019. Going in 2021, we expect to be close to our 2019 run rate, around about $230 million. Also, it's important to note, experts believe that COVID pandemic has set back the global fight on TB. They think that by 2025, there will be an additional 6 million active TB cases as a result of a reduction in testing and treatment. So it's likely that the need for latent TB testing will accelerate after the pandemic.

Okay. Thanks for giving us some color on QuantiFERON. That about wraps it up for our deep dive into our 5 pillars. And thank you for being here today to give us some insights into our Molecular Diagnostics growth areas. And now we're going to turn it over to Roland to give us some financial perspectives.

Thank you, Phoebe. And also from my side, welcome to the QIAGEN Deep Dive Day. Let me introduce to you the 4 key takeaways I would like to talk to you today. First of all, I would like to introduce a new sales reporting on QIAGEN product groups to you, particularly around our 5 pillars of growth. Second, as you have seen in the press release this morning, we increased our guidance for the full year 2020 as well as for the fourth quarter 2020. And I would like to give you incremental insight into that. Third, we also introduced this morning our 2021 guidance in terms of revenue growth rate, which is now calling for an 18% to 20% growth rate and an increased EPS growth rate, now calling for an EPS number of $2.42 to $2.46, using constant exchange rates, which, of course, is also reflecting the nice profitability QIAGEN is delivering. Last, but not least, I would like to share with you our views on our capital allocation strategy, giving you some insights how we see the split between reinvestment and business returning to shareholders, but also in terms of bolt-on acquisitions. Let me start with an overview on our enhanced sales reporting for QIAGEN, starting January 1, 2021. We continue to report product types, customer classes and geographic regions performance. So we're going to talk going forward and disclose to you very detailed our consumables, on instrumentation performance, our Molecular Diagnostics and Life Science performance. And of course, also the performance in the different geographic regions like Americas, Europe, Asia Pacific. On top of that, we will give detailed insight in the performance of our top 7 emerging markets, as they are representing, in the meantime, a significant share of our revenues. And I think it's worthwhile to have a more detailed reporting about them going forward as well. What is new is enhancement around product groups. Going forward, we will introduce 5 different product groups, and of course, a particular focus on the performance of our 5 pillars of growth. As you can see on the next slide how it will look like. So the 5 growth drivers are sample technologies, our diagnostic solutions, our PCR franchise, our genomic's franchise and the remaining group, which we call as. But on top of that, we are going to detail out the performance of our 5 pillars of growth. Very straightforward, of course, is sample technologies because it is 1 product group. We, of course, will have a quarterly reporting on the revenues coming from QIAstat, NeuMoDx and QuantiFERON. As our digital PCR franchise, our QIAcuity product is in the launch phase. We will not break it out on a quarterly basis. But as you have heard from my colleagues before, we give you a dedicated target for 2021. So you have a good feeling on what we believe is going to happen in the year coming up. So how does it look like? This slide, you see our sales views now going forward on product groups, so 5 different product groups, sample tech, diagnostics, PCR, genomics and other. And you see also we are having a breakdown on QuantiFERON, QIAstat, NeuMoDx, not only on a quarterly basis but also on a year-to-date basis. So that should be very helpful for you in again analyzing the sales performance of QIAGEN within that quarter. We are atypical also our product type on customer classes reviews or consumables, instruments, Molecular Diagnostics and Life Science, also year-to-date on a quarterly basis to also show you trends within the year. Same on geographic regions, very typical regions, as I said before, but I would like also to draw your attention to the performance of our 7 top emerging markets, which are China, Brazil, India, South Korea, Mexico, Russia and Turkey, which are, in the meantime, account for roughly 15% of total sales and clearly are important drivers for our overall growth going forward. So also here, something others we would disclose on a quarterly basis to you. As we are right now clearly in the COVID phase, we continue also our report on both, on COVID-related revenues, but also on non-COVID-related revenues and continue to do so because we do expect that the non-COVID-related revenues are going to accelerate, particularly in '21 and beyond. So I think having here a clear disclosure and distinction between both of them is very helpful. Second topic of my presentation today is to increase outlook for 2020. As you have seen in our press release this morning, we have seen a continuation of strong trends in the fourth quarter of 2020, actually in both, in the non-COVID revenues as well on the COVID side. We have seen, for example, a good trend in QuantiFERON. We have seen this trend also happening in North America and in Europe. So that clearly led us to the decision to increase our outlook for the fourth quarter, now calling for an overall revenue growth rate of 32% using constant exchange rates. But of course, it also has a positive impact to our earnings per share. So we also expect here in terms of earnings per share a new EPS number of $0.64 to $0.65 for the fourth quarter. Of course, it also has a positive impact then on the full year. So overall, growth rate is now expected to be 22% in terms of revenues using constant exchange rates, and in terms of EPS, a new high with $2.13 to $2.14 EPS also using constant currencies. So overall, very favorable trends, better than we expected. Therefore, the upgrade in our guidance in 2020. On the next slide, let me introduce our guidance for the year 2021. In terms of revenue performance, we expect now a new growth rate for the year of 18% to 20% in terms of revenue growth rate. And in terms of adjusted EPS, we expect $2.42 to $2.46 EPS. So what is behind this performance? First of all, as I said before, we do believe that the overall positive COVID trend QIAGEN is experiencing right now, which is significant demand for our products, is going to continue, particularly in the first half of '21. We do expect some effects from the vaccination programs in the second half of '21. It's still too early to say how it exactly will look like. Nevertheless, we also do believe we feel very comfortable around the performance on our non-COVID-related products, particularly the 5 pillars of growth and that all in should lead to this quite significant revenue performance we expect in '21. At the same time, we will be able to increase our profitability one more year, as I said, now the new growth rate is calling for an approximately 15% increase in underlying EPS, and that shows you actually that we are focusing on both. On the one side, increasing our profitability. On the other hand side, and I think that goes hand-in-hand, is investing into 5 core pillars of QIAGEN because we believe this is delivering a mid- and long-term growth profile for QIAGEN. So let me remind you on the performance we have seen over the last 5 years. And as I said, we also do believe it's going to continue going forward. As you can see, we had a very solid trend in terms of revenue growth over the last few years. Clearly, the performance and the drive out of COVID, you can see on this slide as well. At the same time, we had a significant increase in terms of profitability. Adjusted EPS was increasing every year, and we do not expect anything different for next year. But as I said before, profitability growth and investment in long to midterm profitability and also revenue growth goes hand-in-hand at QIAGEN. What you can see on this slide is actually both. On the one hand side, we continue to invest in particular 2 areas, one is building out our production capacity because we do believe that our overall production needs are going to increase. We expect significant double-digit growth opportunities of our 5 pillars of growth. So we have to increase capacity. It's the same time, of course, we are stepping up our R&D efforts. Because it is quite obvious that with NeuMoDx and QIAstat we do have 2 outstanding solutions in terms of instrumentation on our hand, but we still have to increase our portfolio of different panels, particular on NeuMoDx, and that is something we're going to invest in. But you also see other areas of investment, particularly around the commercialization of some of these products. We want to add more specialists, more service sources of onset. At the same time, we have some investments as many companies in this space in IT infrastructure, and of course, also cybersecurity. That's a big underlying topic, is that we are also increasing our efficiency and our leverage quite significantly. Overall, it's probably around 400 basis points for the year because we see significant positive impact, for example, coming out of our shared service centers. We have now, in the meantime, around about 15% of our employees, for example, based in our 3 short service centers globally, also the overall digitalization make significant progress at QIAGEN. We have more and more customers just ordering online direct, either in our web stores or in a straight B2B connection, which for a company like QIAGEN is, of course, of importance because, as you know, 85% of our overall revenues are rather incurring consumable sales, which, on the one hand side, is very nice because we are very predictable. On the other hand, it's quite obvious that if you can make some touchless, there's also a good source of efficiency growth. Last but not least, we clearly also expect ongoing improvement in our standard costing. So that should be also helpful in overall margin expansion. Let me switch gears right now for a second and focus on also the investments we're making in terms of capital expenditures. 80% of our capital expenditures are going straight in our 5 pillars of growth. So there is much more focus than, for example, what we did over the last 3 to 4 years because we do believe we have a great opportunity around these 5 pillars of growth, and they need production expansion, and they have a certain need also for portfolio expansion. So overall, we expect an increase on our CapEx side, probably from 8% of revenues in 2020 to 9% in 2021. Nevertheless, overall, we do expect a very positive cash flow contribution. So on the operational cash flow side, we do expect USD 600 million of cash flow in '21 from operating activities. And I would say that is probably something what is rather on the conservative side. As you have seen this next slide from [indiscernible], I would briefly summarize it from my perspective and the financial implication I see for QIAGEN. First of all, sample preparation is clearly a significant product group for QIAGEN, and our technologies are clearly representing a significant market leadership for QIAGEN. We do expect a continuation in terms of growth rate, particularly in the post-COVID scenario as we are building out on market leader position. We had outstanding launches around our -- actually 3 new products. The recent one was clearly our digital PCR franchise. Thomas talked about that our QIAcuity product, which we launched in the third quarter, go ahead, start in the fourth quarter we do expect that we gain a lot of momentum next year. Also here, we are building out production capacity. So I do think the $45 million for next year and a double-digit growth rate going forward is something where we feel very comfortable with. QIAstat-Dx you heard it as well limitation as well as on the production side right now. Significant step-up is coming up in the first half of next year, which allows us much more and much higher panel production, and that should be very helpful in boosting our revenues mid- and long-term. And NeuMoDx also great outstanding numbers in terms of placements. It's going to continue. And as we speak, we build out some menu that should be incrementally helpful. QuantiFERON, as you know, market, which was more difficult in 2020, revenues came down from USD 240 million to USD 180 million to USD 190 million, but we do expect to recover already next year and going back to a good growth rate, probably a low double-digit growth rate in '21. So all in, I would say, a significant growth opportunities around our 5 growth pillars. Let me switch gears here for a second in terms of our financial flexibility. You can see we have a good spread in terms of debt maturity over the next few years. There's clearly some redemption coming out of some of our convertible notes early next year. But overall, we feel very comfortable with our leverage ratio, which is end of the third quarter at 1.8 net debt-to-EBITDA. As you know, we probably feel comfortable in a way up -- all the way up to 3.0 net debt to EBITDA. So clearly, an area where we have a lot of financial flexibility, which leads me to a good overview on our capital allocation strategy. As you have seen, we are very much committed to reinvest into businesses if they promise both revenue growth and profitability growth. And we do believe with our 5 growth pillars, we have very good opportunities. Second, while we are very focused on organic growth rate, we still believe there is an opportunity for bolt-on deals. So if there is a product or a panel or a test available, which would 1 of our platforms, happy to acquire it if it makes financial sense. And last but not least, we are committed, of course, to also increasing returns to our shareholders. As you know, for example, we are right now in the middle of $100 million share buyback program, which we most likely are going to finalize in December 2020. So in summary, we learn more about our new sales reporting, which gives you an enhanced insight on the product groups as well as the 5 pillars of growth. Second, we learn more about what is behind our increase in terms of our revenue growth rate for the year 2020 and also in terms of EPS growth rate, which led to the increase in guidance for the year 2020. Third, we introduced our new guidance for the year 2021, which is now calling for an 18% to 20% growth rate and an EPS growth rate of $2.42 to $2.46 EPS. Last but not least, we shared our views on capital allocation because we do believe it is important that you understand our views on that as well. With that, back to you, Phoebe.

Thank you, Roland. Good to see the new reporting groups rolling out. We're going to take a quick break again, and we'll be back for the Q&A in just a moment. [Break]

Welcome back, and we now have about 300 participants on the webcast. We're going to now go into a 30-minute Q&A session.

You can ask questions verbally through our conference call line or submit questions in written format through the webcast portal. And please be aware that depending on your network connection, there may be a delay between the call line and the response on the webcast. So, thanks, for your patience.

Yes, we already have a number of questions that have come in from you via the webcast portal. And we'll try to get to as many as possible. For this Q&A session, we brought back all of our speakers to address the questions. Let's turn it over to the operator to introduce the process for the call.

[Operator Instructions] Our first question comes from Tycho Peterson from JPMorgan.

Thinking about the double-digit growth assumptions across the 4 of the 5 pillars of growth, I guess. I'm wondering if you could provide a little bit of color on pricing and pull-through potential for QIAstat, NeuMoDx and digital PCR. And I assume the bulk of these will be placed on multiyear contracts. So maybe you could talk about visibility as well.

Tycho, I would like to thank you for your questions. And if I understood you well, you want to understand a bit better the profile of both QIAstat, QIAcuity and NeuMoDx for the coming years. Before giving the floor to Jean-Pascal and to Thomas, yes, indeed, you are right, especially in this context, any time we can, we are trying to look customers into purely annual contracts, both for QIAstat, especially and NeuMoDx. At the same time, we believe that most of the decision taken by customers to move either on QIAstat or NeuMoDx are not driven only for COVID-19, but perhaps for QIAstat and NeuMoDx, JP, you can give also some details here.

Yes. Let me start with QIAstat. First of all, we're very pleased with our placement up to this year. We have about 2,000 systems out there. When we talk to our customer, really, what's really important for them is the differentiation. This will help us going forward to maintain our pricing. We have a product, which is allowing less than a minute sample prep in Europe for a CE-IVD assay. We even have the ability to load directly the swab in the cartridge. From the needs of use, this is very, very appealing for our customer base. One other and very important element for QIAstat is we're not providing only a yes/no answer. So our customers are able to have access to CT values as well as amplification curve. This is really helpful. For example, in real-time PCR these can be translated in pathogen loads. This helps them to get more insight. We think this is going to help us differentiate. If you move to NeuMoDx right now, clearly, our current offering is built around COVID in U.S., but we're moving also in a quad-plex assay, which is really going to be well-positioned for the flu season as well as the COVID season in the respiratory toward the second half of 2021. In Europe, same story. We are built around COVID. We're expecting to translate into our broader menu. In that case, we have one of the broadest menu out there. We expect to see a really good pull-through towards the second half of this year -- of 2021 also.

I'll ask Thomas to give...

Yes. Tycho, I think you mentioned also in your question, QIAcuity, I think we should remind obviously our audience today that QIAcuity is not depending on the COVID-19. But Thomas, why don't we take a bit more details on the launch at the moment and the kind of contract we are trying to push to our customers.

Sure. Thanks for your question, Tycho. We started to deliver QIAcuity about 4 months ago. We have placed so far about 150 units for this year. Next year will be about 600, that is our current estimate. So we have limited experience in terms of the pull through. We currently work with the assumption that it will be in general terms between $15,000 and $30,000 per year. And on the high throughput system, which can run up to 1,200 samples a day, it could be obviously significantly more. And we expect these kind of systems, for example, to go into COVID wastewater testing, as I said in my presentation next year, and then, of course, also in the pharmaceutical industry.

Okay, thank you. Taking a question from the web from Daniel Wendorff at Commerzbank. How should we think about the potential for QuantiFERON TB test in 2021?

Okay. Thanks, John. Clearly, this one, in 2020, we're talking about the down year. So we're expecting to finish the year at around $190 million. The good news is we saw some uptick in Q3 over Q2 in terms of trends, and we see this continuing into Q4. We think this puts us in a good trajectory to end 2021 at the level we saw in 2019.

Okay. Operator can you take the next question?

Our next question comes from Patrick Donnelly from Citi.

Maybe another one on QIAcuity. It's encouraging to hear the traction to date with the 150 placements so far. I think you said you could see maybe 50% of legacy qPCR users moving towards this digital PCR. It might be for Thomas. Maybe just kind of how you think about the conversion timeframe there. And then the traction to date, where are you seeing most of the placements, what areas in the diagnostics side? Are you kind of seeing a lot of interest on the competitive landscape, I guess, how many so far have been kind of competitive placements where you feel like you've worn out?

Yes, thanks for your question, Patrick. We are very, very pleased with the launch, especially within a year where it's very difficult to show instruments to our customers and demos. So that told us already that there was a significant interest. We had about 2,000 customers coming to a Digital PCR Day that was focused on this platform. And it really shows a significant interest, which was, for us, also more than we have expected. Currently, we believe that about 1,300 instruments are placed a year in the market. We believe short to midterm, we can even take a lead in placing instruments because our system as the big advantage that is very, very similar to qPCR testing in terms of using it. So customers are very familiar with how to use such an instrument. And second, the digital PCR offers a lot of advantages over qPCR testing. Like, for example, you can measure DNA and RNA in absolute terms, you can find where events behind the wild-type background, for example, for oncology testing, which is very, very difficult for qPCR. So from that perspective, I believe my statement is probably giving us a chance to have in a decade, maybe the size of the market, maybe earlier, but we will see significant conversion already in the next 3 to 5 years due to the dynamics.

Perhaps, Thomas, a detail that could interest, Patrick, you could give some details, especially on the small volumes market of qPCR because of the configuration, the one place that we are launching, we have a definitive advantage, and this is probably where the conversion might be also quick.

Well, first of all, current standard in the market takes 5 hours time to result with our systems. We can do it under 2 hours. And we have an entry model that is in the range of USD 30,000, which is quite close to where you basically get qPCR systems. So that all brings it into a very similar range so that we believe that this will help to really make a big penetration.

Operator, let's take the next question from the conference call.

Our next question comes from Jack Meehan from Nephron Research.

And congrats on all of that details today. Thierry and Roland, I was hoping you could weigh in a little bit on longer-term margin philosophy. So I was happy to see you're planning a pretty significant R&D investment, capacity expansion in 2021 from the COVID tailwinds, but as you mentioned, those tailwinds, the duration is pretty uncertain. So if I'm looking further out, if the COVID tailwinds start to subside, how would you react from a margin perspective around some of these investments? Are there any thoughts around longer-term margin targets you could talk about?

Yes. Thanks, Jack. And yes, as you said, we clearly do expect also margin in 2021 to be very stable. While we, on the one hand side, clearly see efficiency gains and leverage gains, particularly on the sales and marketing on the administration side, we continue to invest, particularly into R&D projects, particularly on building out a portfolio for NeuMoDx as well as for our QIAstat instruments because we do believe it actually comes with a quite significant return rate because both instruments have great placement rates right now. The demand is there. And we all know that there will be a point in time when the pandemic situation around COVID will hopefully move all of the market and then we move in these other panels. And that is exactly why we are working into that. While we also make the significant investment because we believe there is opportunity within that. How that exactly plays out? I think nobody knows exactly because it is quite obvious that in 2021, we expect growth coming from both, from the COVID portfolio, as you can see in our guidance, as well on the non-COVID side, but we do believe, of course, that over time there will be a certain shift going on. And therefore, again, building out the portfolio is critical. In terms of gross margin, it clearly also has an impact to that. It's quite obvious that right now we have 2 different factors. In '21 on the one hand side, very good margins and being helpful on sample preparations. On the other hand side, we have clearly products like our antigen products and others, which rather come with a different gross margin. Nevertheless, over the time, we expect that the mix is developing more positive for QIAGEN, particular if you move out of '21. So I think the jury on timing is still out, is it rather a change from the pandemic situation to a non-pandemic situation. Is it happening in 6 months, 12 months, 24 months, nobody knows. We just want to be ready with our 5 pillars of growth within that time period.

Okay. Roland, related to that, a question from Doug Schenkel at Cowen asking about the post-COVID environment and the double-digit sales growth. What kind of revenue growth -- what kind of revenue base should people use for 2021? Or how much should be taken out? You were talking about that a minute ago?

Yes. So I think just to clarify where we are with our COVID revenue. So I think it's important, as we all know, that we have to identify product groups related to COVID. That's the reason why we also have certain product groups identified, which also had in 2019, COVID-related products, well, knowing that there was no -- not COVID-related revenues in that period. But if you look at that, it is probably around about $150 million coming from these groups in 2019. We probably have north of $600 million from this group in 2020, and we expect north of $800 million in 2021, so just that you have more or less a ballpark we're talking about. I do think what we, of course, have to see that with some products, it will be more and more difficult over time to tell, is this now COVID-related or is it non-COVID-related. If you think, for example, on QIAstat, what we're selling there is a panel with more than 20 different pathogens. And right now, of course, by far, the majority is very much COVID-related. That is going to change over time. So it's -- the differentiation is not easy. That's the reason why we talk about this dedicated product groups. And that's also the reason why we give you this insight, more or less now on a quarterly basis, that you can see what we're doing and what we're facing there.

Okay. I think this is a question for JP also coming from Doug. On NeuMoDx, what plans do you have to expand the women's health menu? Do you need to build that out for the U.S. market?

So in the U.S., right now, we have GBS, which is approved, and we're planning in next year to submit for CT/NG. In 2022, we're going to go also for Trichomonas. So that would complete our women's health menu in the U.S.

Just one more question from the web. Thierry, what changes have you seen in your business in China since H2 2019? What is the environment there like?

Well, it's fair to say that China, obviously, at least in the first 6 months of 2020, has been a country tremendously impacted by COVID-19, with a very severe lockdown. If you remember a year ago, we disclosed very transparently some operational challenges in China, mainly around the monitoring of the efficiency of our commercial partners and commercial channels. This is where we have basically invested, taking advantage in the post, I would say, in the Chinese business of '20 to reinforce our team and management here. We expect China, from those efforts, to go back to a double-digit growth next year in 2021 because the market recovers quite quickly compared to other markets in the rest of the world. This is our ambition for next year.

Okay. Thank you, Thierry. Operator, can you move to the -- back to the online -- to the conference call Q&A?

Our next question comes from Falko Friedrichs from Deutsche Bank.

My first question is on the test menu approvals for the NeuMoDx and QIAstat-Dx. Do you expect or do you see the potential risk for a bit of a delay in those approvals due to the pandemic and the lockdowns? It would be great if you can give us some thoughts here and potentially some comfort on the time lines? And then secondly, it would be great to get a little bit more color on your COVID-19 antigen test, in regards to how much you are selling this test and how much your capacity allowance going into 2021.

I suggest that on those two questions, the profile and the risk challenges of the approvals, especially for NeuMoDx and QIAstat and then antigen, I'd propose that JP is taking the question on NeuMoDx and the challenges of regulatory, and I will take the antigen questions. JP?

Yes. First of all, I mean, it's a fair question. And we -- just to mention, we've -- over the last 12 months, especially even 18 months, we beefed up our clinical affair department to be ready for these trials. There's a way for us to prepare for these in terms of increasing the number of sites, reaching out to also CROs out there. The short of the long answer, we feel very good about the time lines, and we're ready to get these submissions on time in terms of NeuMoDx and QIAstat.

So antigen, as you have understood, and as we have disclosed, this is a partnership between 2 companies, QIAGEN and Illumina in Australia. The manufacturing is currently coming from Australia. You probably have seen that it is endorsed by the NIH, who has supported their investments in manufacturing output. Volume-wise, we have always disclosed that we will be below the 1 million of tests until the end of the year, moving progressively to around 1 million of tests available in Q1 and moving a bit higher than that, probably between 3 million to 5 million of test, starting in Q2. This is why we believe, potentially, that there might be some upsides with this antigen solutions in our projection. But as we have always tried to do as well, we tried to be conscious that -- planning exactly what's going to happen as far as evolution of sales on antigen is quite difficult. We have solid numbers for 2021. This is what we want to achieve and execute on.

Our next question comes from Scott Bardo from Berenberg.

Just first one for Roland, please. Yes, I just want to understand whether you see now these new 33% margin as something a little bit more sustainable for QIAGEN. I guess what I'm trying to understand, Roland, is do you consider the structural margin to QIAGEN higher now post crisis than pre-crisis, please. And second question, please, for -- either Jean-Pascal or Thierry. I see that the FDA has done an analysis of various different COVID tests for sensitivity. And QIAstat, I think, and your respiratory test didn't score as highly as some others in that test, in that analysis? And I wonder, is this...

And we have one down. Okay.

I did not do that to Scott's line. Okay.

Let's talk the margin -- let's talk about the margin with NeuMoDx and QIAstat...

Let me start with the margin because this -- okay.

So let me start with the operating margin. I think it's important to realize, of course, that we have 2 components driving that. First of all, gross margins. As I said before, gross margin in '21 are probably somewhat under pressure compared to 2020. And the reason is, here, increasing our capacity. As we speak, particularly around QIAstat, but also particularly around NeuMoDx, which clearly comes with incremental costs. So there is a certain dilution we see in '21 in our gross margin. We do believe -- and in addition, then, of course, as we just talked about, antigen products, as it is a trading product for QIAGEN, it's rather something also with a lower gross margin. Both impacts are clearly somewhat negative to our overall gross margin. We do believe that it's going to be positive in '22 and beyond, and therefore, being helpful beyond the time period. Second topic is clearly on the operational expense side, I would also point out here that in '21, we see leverage. We see also efficiencies, particularly in sales and marketing, particularly in administration. So that is being helpful. And I don't see any reason that, that should not continue also in the time beyond. Just refer to what we did in the past and continue to do. We have very successful business, shared service centers. We have a significant business now coming through our digital channels that are also going to increase. That clearly gets more and more important. So being helpful. And as we said before, we have dedicated R&D projects, which we started in '21. Many of them will be finalized in '21, but in all fairness, not all of them will be finalized in '21. So then depending on how the overall revenue situation will be in '22 and beyond, very much we believe that the growth pillars continue very strongly. And as I said before, we have to see how long the COVID continue going forward. We believe it will be forever. So on testing question as well as volume, and is it changing in the 6, 12, 24, whatever time period. So I think there's a fair opportunity for us to keep healthy margins. But I think right now, we're enjoying, as you said, probably for 2 years in a row, a very healthy 34%-plus growth margin rate, and we are very happy with that.

Thank you, Roland. And now to the question related to that FDA publication and some sensitivity or LOD of some COVID-19-related tests. I would prefer to talk about facts. We pay, obviously, extreme attention to what is coming from the FDA. It's interesting to say that the first to react were the customers of QIAstat, highlighting again that what counts really is the sensitivity and specificity. And you probably remember that QIAstat was the first syndromic assay for COVID-19 and also a pathogen approved by the FDA. Fact number one, sensitivity, specificity is excellent and was approved by the FDA. Fact number two, we, thanks to some customers, redid the analysis and with a second [ report ] and it improved greatly the first results, and we communicated that to the FDA. Fact number three, QIAstat was the only syndromic assay in that analysis, even some reputed syndromic product where there are monoplex version. I'm referring to BioFire. And fact number four, we are in a situation at the moment for QIAstat where it's absolutely not an issue of market demand, but of our capacity to supply our customers.

Okay. Thank you very much, Thierry. We have 2 more people with questions in the conference call. Operator, why don't we take care of those first, and then I'll come back to some questions that have come in online.

Our next question comes from Hugo Solvet from Exane BNP Paribas.

First one on NeuMoDx, pretty impressive time line for bringing the European menu to the U.S. I'm just curious to hear your views on the breadth of menu that is, let's say, required by your U.S. consumers. Or in other words, what new tests will be key to strengthen the competitiveness of the platform in the U.S.? And two small ones on QIAstat-Dx. Could you share your plans for FDA clearance of the [ in vitro ] feature in the U.S.? And if I remember well, that would be the last one. Back in 2019, you shared plans to do some oncology applications on QIAstat-Dx. It does not seem to be on the agenda anymore. Maybe you could update us on this topic.

So I'll start with the NeuMoDx, and I'll pass the baton to Thierry on the QIAstat, so he can step in. I would say on the NeuMoDx side in the U.S., first of all, obviously, the platform is FDA-approved. We have COVID-19 application, and it's really going well right now as this is another product where we sell everything we can produce. Again, we have 130 placement worldwide, but also strong demand in the U.S. The second assay, which we submitted to the FDA this year was the [ Quadplex ] and we think it's going to play really well into the season for the -- especially the second half of next year. Next to this, this is really important. One of the big feature of NeuMoDx is the LDT channel. This was very, very important when we surveyed our customer that they want to get access to the LDT channel. I would like to remind you that more -- a pretty sizable portion of the test menu for the labs can be LDT, and it's also how they differentiate themselves very often in the market, having a unique offering. And then we expect this is going to help us in the U.S. market. We -- as we mentioned earlier, we see some further approval next year on the women's health topics. And then we expect 7 approval -- 7 submission in 2022 to complete our portfolio in the U.S.

Thanks, Jean-Pascal. And moving to QIAstat, to your 2 quick questions. First, the expansion of claim for the direct swab is planned for us for 2021. This is our objective. And the second, oncology, the good thing to highlight is that we have, unlike many competitors, that oncology potential in QIAstat. But it's a question on focus. The situation created by this pandemic basically drove us to quickly come up with a solution, and I think this was the right decision. We are still fine-tuning our oncology strategy. To be very clear with you, I don't expect an assay on QIAstat for oncology before the end of 2022. It's still in our work plan. But again, priority-after-priority, execution first.

Okay. Operator, we should have one last question on that side...

Our next question comes from Derik De Bruin from Bank of America.

So a couple of questions. I think the first one is how much is -- when you look at the $600 million, $800 million in COVID revenues that you're getting, how much of that is sample prep? And then another question would be in the sample prep market, there's obviously a lot of new competition that's come online. What are you seeing in terms of pricing pressure in that market as you have these new entries?

Yes. I think out of the $600 million this year, around about USD 400 million is sample preparation. And we still believe that we actually gained nicely our market share. It's quite obvious that QIAGEN was the first one, which was being able to size and scale, particularly in the second quarter, was being very helpful. We are now clearly also seeing a significant demand on the implementation side. You heard we -- how Thomas as well as JP were talking about implementation placement numbers and that was being very helpful, and those generating even more demand for us going forward. And you also could see in the third quarter, and I'm quite sure it will not be different in the third quarter, how we had to balance DNA and RNA sample preparation. Because at the same time, where we see a huge demand for RNA extraction, we clearly also see the non-COVID business coming back, and that is clearly also an incremental step for us, which we have to address. So it's also the reason why we believe, overall, it's an important business for us, and it will continue to be.

Yes. I would like to leverage that answer from Roland. I know that the focus in many of your questions, those is around COVID-19-related sample tech. Let's not forget that this is not just what QIAGEN is doing. And if you look, for example, at our results for the total sample tech portfolio, as Roland was saying, DNA, RNA, our sales in Q3 were not only higher than Q3 of 2019, but sequentially higher as well than Q2 2020. Because, I mean, obviously, we answered already immediate challenge of COVID-19, but it's our duty to prepare the future and adjust our portfolio to answer -- with DNA. And this is key to understand. The second part of your question, if I understood well, was related to pricing. While we confirm, as we have said for many months, that QIAGEN has never tried to take advantage of this pandemic to try to play on prices and basically pump up pricing, we have not suffered for any price erosion on this sample tech portfolio. First. Second, because we innovate, and an innovation, for example, like QIAprep&amp, allows us to come to the market with a higher average selling price, that a normal extraction solution for a total assay.

Okay. Thank you very much, Thierry. Moving now to some of the online questions. We have a question from Brian Weinstein here asking what is the update on the bioinformatics business? Where is that moving? And also related to that, how is the universal NGS business performing, especially in Life Sciences?

Brian, many thanks for your question. You are asking a key question about what we consider at QIAGEN, our core business. I think you remember the slides where you see the 5 pillars of growth, but those 5 pillars of growth are fueled by many years of expertise in what we qualify as our core business. QDI, what we call QIAGEN Digital Insight, bioinformatics is one of them. UNGS, universal next-generation sequencing, is another one of them. We consider bioinformatic as a clear enabler, transversal enabler Life Science, but also molecular diagnostics for our Sample to Insight portfolio, and it continues at this. And we expect for 2021 a double-digit profile growth for this activity. UNGS, we said very clearly a year ago that we were completely resetting our NGS strategy. The focus, again, Brian, QIAGEN is a company leading in chemistry. This is why we focus currently our NGS solution. Our partnership with Illumina allows us to find solution both in the labs of all our pharma partners with an implementation. And again, for our chemistry in NGS, we have double-digit growth expectation.

Thomas, related to that, a question came in, in terms of where is the real innovation areas in sample technologies? And what are your plans in terms of life cycle management for the instruments?

Yes. There are multiple areas of innovation in sample preparation. First of all, the workflow. There are possibilities to make it quicker, faster on the instruments that we have. Second, the application, so different application that can basically break up new samples and open new fields. We have examples in the field of microbiome research, of liquid biopsy in the past, and we expect to get more in areas like, for example, single-cell technologies. And this is the second era. And last but not least, completely new concepts, like QIAprep&amp, where the preparation has been able to be reduced from 1 hour to 2 minutes without really using plastics. That is a project that started already 2, 3 years ago, and it is certainly also making a difference in the pandemic. It is currently a project that is used for research only, and we expect to launch the product early next year that can also be used in the diagnostic environment. And this product can be easily scaled up in millions of tests. And we are pretty optimistic that this cannot only be important for the COVID space but also beyond that, as Thierry said in his presentation. So we are very excited about what is coming in this area, including also new instrumentation. Second half of next year, we'll launch a new system. And then beyond that, we also look into enhancement on the higher throughput side of things.

Good. Thank you, Thomas. I'd say this would be the last question right now. It's a question -- a follow-up question for Roland on capital deployment. Do you think about buying back stock right now? And what is the bias in terms of buybacks versus M&A? Do you have bandwidth capacity need to do deals given the focus on the 5 pillars of growth? Or is -- what is the perspective there?

I do think we do have a track record of doing both. We investments into our pillars of growth -- 5 growth pillars. And again, '21 is clearly a focus there. We're always looking -- able to look on acquisition potentials, most likely bolt-on acquisitions, if there is a nice test available, if there's a nice panel available, running of one of our machines and creating value for QIAGEN. I think we're always happy to look at that. And last but not least, we, since 2012, have a good commitment and a good strategy in returning, again, value to our shareholders and doing that on a regular basis. And we're in the middle of $100 million share buyback commitment. And I would say there's nothing we'll change here moving into next year.

If I may, John, I would insist on this point that what is important for us and what is important for our shareholders, obviously, is that we are driven by value creation. And I believe that we tried to demonstrate today that organically, if we just consider our 5 pillars of growth, we have a lot to execute on to facilitate our growth. That doesn't mean that M&A would not be a priority. But for the coming weeks and months, clearly, executing on the promises on our portfolio is clearly the direction that we are giving to QIAGEN.

Okay. Thank you very much, Thierry.

Looks like we're out of time for questions now. If your question wasn't answered, feel free to contact us. You can find John and I's contact info on the website in the IR section.

Yes. Thank you, Phoebe. We really appreciate you taking the time to be with us today, and we look forward to continuing the interactions with you in the future. Thank you very much for your participation today.

Thank you.