QIAGEN Management Buyout Synthetic DNA Business Unit ...

QIAGEN
Management Buyout
Synthetic DNA Business Unit
Conference Call
July 1, 2004

Welcome to QIAGEN‘s Conference Call
Second Management Quarter Buyout and Synthetic Half Year DNA 2003 Business Conference Unit Call
July 1, 2004
Conference Call Outline:
-20 min Presentation
Peer M. Schatz, President & CEO
Patrick A. Weiss,
CEO Operon Biotechnologies, Inc.
Roland Sackers, CFO
- 40 min Q&A session
Due to time restrictions we would like to ask
for only TWO questions per caller.

Forward Looking Statements
Certain of the statements contained in this presentation may be considered forward-looking
statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended,
and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that
any of the statements contained herein relating to QIAGEN's products and markets and
operating results are forward-looking, such statements are based on current expectations that
involve a number of uncertainties and risks. Such uncertainties and risks include, but are not
limited to, risks associated with management of growth and international operations
(including the effects of currency fluctuations), variability of operating results, the
commercial development of the DNA sequencing, genomics and synthetic nucleic acid-related
markets, as well as the nucleic acid-based molecular diagnostics and genetic vaccination and
gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations
in demand for QIAGEN's products (including seasonal fluctuations), difficulties in
successfully adapting QIAGEN’s products to integrated solutions and producing such
products, the ability of QIAGEN to identify and develop new products and to differentiate its
products from competitors, and the integration of acquisitions of technologies and businesses.
For further information, refer to the discussion in reports that QIAGEN has filed with the U.S.
Securities and Exchange Commission (SEC).

Structure of the Deal I
On 6/30 QIAGEN announced the spin-out of its oligo business
synthetic DNA products
“Operon” and “Sawady” business
• Our rationale for the spin-out:
• while business is strong, direction has become different to
QIAGEN’s focus
• fewer products in portfolio which are of core interest to QIAGEN
(speaks for partnership vs. owning)
• synthetic DNA was always a non-core business
• We were successful in making this business profitable again
• Handing over to an experienced management team headed
by Patrick A. Weiss, Co-founder of Xeragon, Inc. and currently
VP at QIAGEN.

Structure of the Deal II
• QIAGEN will keep:
• approx. 16% ownership in Operon Biotechnologies
• the siRNA business
• preferred access to synthetic DNA product portfolio and
manufacturing capacity
• QIAGEN will sell to Operon Biotechnolgies
• Synthetic DNA business (assets and business)
Custom oligonucleotide business
Modified oligonucleotide business
Shelf products (AROS)
Antibody and peptide business (small, in “other” line)

Deal Summary
+ Cash (received June 30, 2004) USD 17.8 million
+ Note USD 6.5 million
__________________________________________________________
Subtotal
USD 24.3 million
__________________________________________________________
+ Preferred access X= significant
+ Preferred purchasing terms Y= significant
___________________________________________________________
Total
= 24.3+X+Y
In addition
QIAGEN retained 16% in Operon (approx) = USD 4 million
Shares issued for
Operon Technologies, Inc in 2000 approx.
Sawady group in 2001 approx.
2.8 million
0.9 million

QIAGENs Business Divisions
Consumables
Synthetic
DNA
Biotechnologies, Inc.
(New Company)
10%
Others
Instrumentation

Next Steps?
• Starting June 30, 2004 the following
companies and/or related assets are transferred:
• QIAGEN Sciences KK (former Sawady)
• QIAGEN Operon GmbH (Cologne)
• QIAGEN Operon Inc. Alameda and Germantown
• Operon Biotechnologies will manufacture
siRNA and miRNA exclusively for QIAGEN. (contract
manufacturing agreement, very attractive terms)
• All other siRNA functions (research, marketing, sales
etc.) remain with QIAGEN: siRNA business stays
with QIAGEN
• Transaction effective June 30, 2004
• QIAGEN will account for Operon as a
minority investment

Consumables
Instruments
Synthetic NA
Q1 2004
Q4 2003
Q3 2003
Q2 2003
Q1 2003
60%
50%
40%
30%
20%
10%
0%
Q1 2001
Q2 2001
Q3 2001
Q4 2001
Q1 2002
Q2 2002
Q3 2002
Q4 2002
Growth by Product Line
Growth vs prior year
-10%
-20%
-30%
Period
calculated under actual currency rates

Different Businesses
Differences Synergies Differences
• Proprietary • Often used in combination • Non-proprietary (few exceptions)
• Standardized • Component of products • Custom made
• Highly optimized • Many transactions with market • Fast turnaround times (order to receive)
• High barrier to entry • Competitve barriers low
• Brand equity in focus • Flanking products
Spin-out and partnership is a positive step for QIAGEN and
allows QIAGEN to increase focus on its core business
QIAGEN:
Operon:
High value adding solutions for
preanalytical sample preparation
High quality, fast turnaround, cost leading
DNA oligonucleotide products

Three Different Options:
a. Partner
b. Sell the division
c. Turn around business

QIAGEN Operon is strong
• QIAGEN Operon, Cologne
grows from 0 and
in 3 years becomes # 2 in Europe
• QIAGEN KK is today # 2 in Japan
• QIAGEN Operon Inc. compensates the losses
of the major customers in the US with smaller
customers – remains being # 2 in the US and
outgrew competition

Results
• We have access to what we want and need
at very attractive terms – (preferred access
and partnership)
• QIAGEN boosts focus on core business
• Improving margins
• Lower volatility/cyclicality
• Increases perceived value of QIAGEN
brand equity (premium business)
• No changes to QIAGEN’s synthetic RNA
business (QIAGEN keeps siRNA business)

QIAGEN Gene Silencing Agreements
QIAGEN and Intradigm (July 2003)
• Partnership for R&D of siRNA for drug discovery
and siRNA therapeutics
QIAGEN and Novartis (August 2003)
• Supply agreement on a genome wide siRNA library
QIAGEN and Affymetrix (October 2003)
• Collaboration on siRNA research using
GeneChip ® technology
QIAGEN and Novartis (December 2003)
• QIAGEN licensed from Novartis novel algorithm for selection
of highly functional siRNA target sequences
QIAGEN and AstraZeneca (June 30, 2004)
• Supply agreement on siRNA products used in
gene silencing applications

2004 Quarterly Revenue Guidance
Guidance announced Feb 2004
Q3
Q4
Revenues (US$m) 101-103 105-107
Operating Income (%)* 23-25% 24-26%
EPS in $ per share* 0.10 - 0.11 0.10 - 0.11
Sold to Operon Biotechnologies
New Guidance
Revenues synthetic DNA 9-10 10-11
Revenues Other 2 2
Op.Inc. (%)* Syth. DNA 15% 15%
Op.Inc. (%)* Other

Accounting and Other
• As of July 1, QIAGEN accounts for its minority investment in
Operon Biotechnologies as a cost method investment.
Accordingly, QIAGEN will not reflect Operon Biotechnologies’
sales to third parties nor its income generated from third
parties. Certain expenses will be charged to Operon
Biotechnologies such as rent and administrative fees during
the transition period.
• QIAGEN deconsolidates operations and expects to
incur charges in the amount of approximately
$0.02 - $0.03 in Q2 2004.
• Impact on margins of siRNA business due to outsourcing
of manufacturing immaterial

QIAGEN
QIAGEN is the market and technology leader in
nucleic acid sample handling, separation and
purification.
Our mission is to provide an outstanding contribution to
our customers’ success by innovating and supplying our
products and services in all areas where they require this
expertise.
Our products and technologies enable our customers to
achieve breakthroughs in research and new standards in
healthcare which both contribute to improving lives.
By focusing on increasing our customers’ success, the
exceptional talent and commitment of our employees
bring excellence to all segments of the value chain and
outstanding success to QIAGEN.