Ladies and gentlemen, thank you for standing by. I am Katie, your call operator. Welcome and thank you for joining QIAGEN's Q1 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Please be advised that this call is being recorded at QIAGEN's request and will be made available on their Internet site. The prepared re-remarks will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. At this time, I'd like to introduce your host, John Gilardi, Vice President, Head of Corporate Communications and Investor Relations at QIAGEN. Please go ahead.
Thank you, operator, and thank you as well to all of you for joining us today. On the call we have Thierry Bernard, our Chief Executive Officer, and Roland Sackers, our Chief Financial Officer. Also joining us is Phoebe Loh from the investor relations team. Please note that this call is being webcast live and will be archived on the investors section of our website at www.QIAGEN.com. A copy of the quarterly results, press release, and presentations are also available on this website. Today, we will first have some remarks from Thierry and Roland and then move into the Q&A session. Before we begin, let me briefly cover our safe harbor statement. This call, discussion, and responses to your questions reflect the views of management as of today, May 4, 2023.
We'll be making statements and providing responses to your questions that state 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. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors. These include those discussed in our filings with the U.S. Securities and Exchange Commission. These are also filed with the SEC and available on our website. QIAGEN disclaims any intention or obligation to revise any forward-looking statements. We will also be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. All references to EPS refer to diluted EPS.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are available in our press release in the presentation. With that, I'd like to now turn over the call to Thierry.
Thank you very much, John, and a very warm welcome to all of you, and obviously, thank you for joining us. As you have seen from our release yesterday, QIAGEN has had a very solid start in the Q1. Our teams all over the world remain focused amid uncertain macro conditions and did a great job executing on our goals, delivering 12% CER growth in our non-COVID product groups, even better than expected. Let me get to the top messages for today. First, we exceeded our outlook for net sales growth and adjusted EPS driven by strong sales in the non-COVID-based business. Net sales at CER for the Q1 were $502 million and exceeded our outlook for at least $490 million.
On the other hand, due to Q1 2022 being an exceptionally strong quarter for COVID testing, we had sizable headwinds as expected in COVID product sales in the Q1 of 2023. As a result, total sales declined 20% CER to $485 million at actual rates. Adjusted earnings per share were $0.52 CER, also above the outlook for at least $0.47 CER. Our second message, our teams are executing on our five pillars of growth strategy. In Sample Tech, first, we are pleased to report double-digit CER growth continuing in the non-COVID portfolio. This is driven by strong consumable sales across the business and also supported by our ongoing instrument upgrade program. The QuantiFERON latent TB test also delivered another quarter of double-digit CER growth with strength all across the regions.
QIAstat Diagnostic and NeuMoDx, our PCR clinical testing system, both made good progress in transitioning to non-COVID use. NeuMoDx, for example, delivered underlying double-digit CER sales growth, while QIAstat Diagnostics saw significant sales gains for the GI and meningitis panels in Europe. The QIAcuity portfolio of digital PCR system and application kits delivered double-digit CER sales growth with solid instrument placement and an increasing uptake of consumable all across the regions. As a third message, we are maintaining a good level of profitability. We continue to make investments into our business organically or non-organically, while actively managing costs with a high level of discipline. As a last message, we are reaffirming our full year outlook for 2023. Our teams are determined to deliver on our goals for the year. We remain proactive, agile in addressing any new developments.
For 2023, we continue to expect sales of at least $2 or 5 billion at CER, and for adjusted EPS of at least $2.10 CER again. Of course, key to this outlook is our goal to deliver for the full year double-digit CER sales growth in the non-COVID portfolio, just like we did in this Q1. We are also forecasting for a significant decline in COVID-19 sales. Remember that those sales compare to the pre-pandemic level of around $150 million of sales in 2019 from those products that were then redeployed for COVID testing. We do have a strong portfolio, a solid pipeline of instruments, and a solid customer knowledge to support our growth ambitions, and we have the team worldwide to deliver.
As a last point, I would like once again to welcome Steve Rutkowski to our supervisory board. Many of you know Steve from his long tenures as Chairman, President, and CEO of Quest Diagnostics. Steve has indeed a remarkable career in the diagnostic industry, and we look forward to his valuable contribution to the future success of QIAGEN. I would like to now hand over to Roland for a review of our results in greater detail.
Thank you, Thierry. Hello, everyone, and thank you as well for me joining us today on this call. Let me first review our results for the quarter and later provide some perspectives on the outlook. Q1, 2023 net sales were $485 million. These results, as expected, were down 20% at constant exchange rates compared to the Q1 of 2022, which was a period of sizable COVID-19 revenues. The decline at actual revenues was 23%. At the same time, our teams delivered strong 12% CR growth in the non-COVID product groups to $434 million. Among the areas that outperformed were the sample technologies and the QuantiFERON latent TB portfolios. Instrument sales were lower on a year-over-year basis, although we saw overall good placement trends across most of our platforms.
The reagent rental business was more robust than capital sales. There are benefits to this approach since the placements are linked to multi-year visibility and commitments for consumable purchases. In terms of sales among the four product groups, let's start with Sample Technologies. This product group represents about 1/3 of total sales. Sample Technologies sales continued the trend from 2022 with solid growth in non-COVID applications that represented over 80% of the product group and also supported by instrument sales gains. Diagnostic Solutions is our second product group and also represents about 1/3 of sales. The QuantiFERON latent TB test was the main driver with sales rising 19% CR on growth in all regions. We continue to see strong conversion from the tuberculin skin test to QuantiFERON as a modern blood-based gold standard.
Among other products in this group, sales of the QIAstat-Dx system for syndromic testing declined due to the drop-off in COVID-19 testing. The same was also the case for NeuMoDx. At the same time, as Thierry mentioned, sales for other applications were higher in the Q1 of 2023 over the year ago period. Moving to the PCR Nucleic Acid Amplification product group. Sales for non-COVID product groups rose at a double-digit CR rate, this was more than offset by the significant decline in COVID-19 testing. The QIAcuity digital PCR system maintained a sales growth above 20% CR on further growth in instrumentation sales and growing consumables utilization. In the Genomics NGS product group, which represents over 10% of total sales, non-COVID product group sales rose at a mid-single digit CR rate over the Q1 of 2022.
These were supported by solid growth in sales of universal NGS kits for use by any sequencer and in the QIAGEN Digital Insights Bioinformatics business. Looking at sales on a geographic basis, all three regions had lower overall sales in the Q1 of 2023 over the year ago period, and again, due to the decline in COVID-19 sales. However, sales in the Americas and Europe, Middle East, Africa regions both grew at a double-digit CR pace, excluding COVID-19 product groups compared to Q1 2022. The Americas benefited from the solid trends for QuantiFERON as well in life science. In the EMEA region, the top performing countries were Germany, the United Kingdom, France, and Italy, and this growth across both customer classes. In the Asia Pacific Japan region, non-COVID sales were largely unchanged compared to the Q1 of 2022.
This reflected a significant decline of over 30% CER in China due to COVID headwinds from the Q1 of 2022. We continue to closely monitor the situation in China and expect to see improvement trends in the non-COVID product groups over the course of the year. Let me also comment on the rest of the income statement. Adjusted EPS for the Q1 of 2023 was $0.52 at constant exchange rates and above the outlook for at least $0.47 CER. Results at actual rates were $0.51 due to the small adverse currency headwinds. The adjusted tax rate for the Q1 was 19%, which was in line with our outlook, and it's the same as the Q1 of 2022. Adjusted operating income reflected the significant decline in COVID-related sales, along with higher R&D investments over the Q1 of 2022.
The result was an adjusted operating income margin at 25.6% of sales. Among the key factors, the adjusted gross margin came in at 67.3% of sales. This is a good start for the year. For the full year in 2023, we are likely to see a level in the range of about 66.5%-67% of sales. This is due in part to utilization of the product capacity that we built up to address the pandemic and now transitioning to other applications. R&D investments rose over the same period in 2022 and were on the high end at 11.3% of sales due to investments into the 5 pillars of growth. Here we expect a full year level of about 10% of sales. On the other hand, we had lower levels of expenses in other categories.
Sales and marketing was 23.6% of sales as we increased our digital customer engagement. General administrative expenses were also lower than in Q1 2022 and represented 6.8% of sales. This is a mix of gaining efficiencies through scalable teams while making investments into IT systems, including an upgrade of our SAP system and into cybersecurity. Turning to cash flow, results for the Q1 of 2023 also reflected the lower sales and profit levels from the same period of 2022. Results for the Q1 of 2023 included higher working capital requirements, in particular for an increase in inventories to ensure product availability. At the same time, account receivables were lower across all regions than in the first year of 2022, with a level of about 50 days of sales outstanding compared to about 59 days in March 2022.
In terms of our balance sheet, total consolidated net debt stood at $592.6 million as of March 31, 2023, compared to $443.1 million at the end of 2022. Our liquidity position was $1.3 billion at the end of the Q1, and this compares to $1.4 billion as of December 31, 2022. As a result, our leverage ratio was 0.8 times net debt to adjusted EBITDA, compared to 0.5 times at the end of 2022. Also keep in mind that we have approximately $400 million of debt reaching maturity in the Q3 of this year. We are using our healthy balance sheet to strengthen the business through investments and targeted M&A.
A recent example is the acquisition of Verogen to expand our human identification and forensics business and build up a top offering with sequencing-related products. We continue to review additional acquisition opportunities with a keen focus on strategic fit and financial discipline in terms of prices. I would now like to hand back to Thierry Bernard.
Thanks a lot, Roland. Now please allow me to give you a few details on some of the portfolio progress made by our teams in the last quarter. First, in Diagnostic Solutions, our syndromic testing platform, QIAstat diagnostic, has been launched in Japan, starting with our respiratory panel. This entry into Japan adds to the more than 100 other countries where QIAstat diagnostic instruments are already being used for the diagnostic of various diseases in near patient settings. At the end of the Q1, we now had over 3,700 QIAstat systems placed worldwide. A key driver for new placement includes the strong offering in Europe and in many other countries with the respiratory, GI, gastrointestinal, and meningitis panel. We also good demand in the U.S. where our teams continue to work on expanding the menu.
As an example, we expect an FDA decision in the middle of this year on the gastrointestinal panel, and we also expect to submit the meningitis panel in the second half of this year. Now that we have made good progress on these three important panels, we are developing new applications such as panels for blood infections, pneumonia, and complex urinary tract infections. Also in diagnostic solutions. The QuantiFERON TB test has successfully gained new certification in Europe under what we call the revised In Vitro Diagnostic Medical Devices Regulation, IVDR. The upgraded IVDR certifications means that QuantiFERON TB Plus joins a group of other QIAGEN products that have already received this new status, including the NeuMoDx integrated clinical PCR system and related assays.
We also very much welcome the reaffirmation this week of the positive B recommendation by the U.S. Preventive Services Task Force for latent TB screening in certain adult population. This is extremely important because it means that screening by primary care physicians continues to be available without co-payments. Our companion diagnostic portfolio and pharma co-development revenues are also in this product group. This is indeed an important area of our portfolio, and we added to our list of partners through a new agreement with Servier, a global pharmaceutical company. Together with Servier, we are developing a companion diagnostic for TIBSOVO as a treatment for acute myeloid leukemia. Under this agreement, QIAGEN will develop and validate a PCR test that can be used to detect IDH1 gene mutation in acute myeloid leukemia in patients, in whole blood and bone marrow aspirates.
As a reminder, QIAGEN has more than 30 master collaboration agreements with global pharma and biotech companies. As another reminder, QIAGEN is probably as of today, the only company offering companion diagnostic in PCR, NGS, and also digital PCR formats. In our genomics and next generation sequencing product group, among the recent development, we launched a group of QIAseq targeted cell-free DNA, ultra panels for use on any sequencer. Those new panels allow customer researching cancer and other diseases to turn liquid biopsy samples into libraries ready for sequencing in less than 8 hours. Those kits further strengthen the position of QIAGEN as a key provider of universal NGS consumables. You therefore can see that all over the world, our empowered teams are working hard to build additional value through portfolio advancement.
As we move through the year, we have still some key expansion plan, such are more digital PCR application for use on QIAcuity and submissions for additional tests on QIAstat-Dx and NeuMoDx. Now back to Roland for more details on our outlook Q2 and 2003.
Yeah, thank you, Thierry. Let me provide more perspectives on our outlook for 2023 and also for the 2Q. As mentioned earlier, we have reaffirmed the full year sales outlook for at least $2.05 billion at constant exchange rates and for double-digit CER sales growth in the non-COVID product groups. The share of sales from non-COVID products is clearly growing as we work through the pandemic headwinds. One of our strengths is our portfolio with a high share of recurring revenues from consumables, which represent over 85% of total sales. As you have heard from other companies, we are also seeing some caution among various customer groups in terms of instrument purchases. At the same time, we are seeing positive trends in placements and the level of customer interest.
This is clearly due to the value proposition that our new platforms have to offer. In terms of regions, we are keen and we are keeping an eye on trends in China and how they develop during the year. Another area we are watching closely is our OEM business. This involves larger orders from other industry suppliers, and as we have seen in the past, this is a business where ordering can be volatile. In terms of profitability, we also reaffirmed the outlook for adjusted EPS at about $2.10 at constant exchange rates. This includes the $0.03 of dilution for the Verogen acquisition. Moving to the Q2, we have set an outlook for net sales of at least $490 million at constant exchange rates.
Adjusted earnings per share are expected to be at least $0.50 per share, also at constant exchange rate. This outlook for the Q2 of 2023 has to be seen against the healthy non-COVID results in the same period of 2022, which was marked by increased customer demand after pandemic restrictions were eased. For currency movements and based on rates as of May 1st, we expect a neutral impact on both net sales and adjusted EPS for both the Q2 and for the full year 2023. I would like to hand back to Thierry.
Thanks a lot, Roland, once again. We are coming back to the end of our preliminary comments. Let me provide you with a quick recap of our key messages before we move into the Q&A session. First, our results for the Q1 show a solid start of the year. We exceeded the outlook for sales driven by double-digit CER gains in the non-COVID-based business. As a reminder, this is the ninth quarter in a row we have delivered double-digit CER growth in our non-COVID product group. We also exceeded our outlook for adjusted earnings per share while continuing, of course, to invest in key areas of our business. Second, our teams are focused on execution and committed to delivering on our goals. We have a number of important developments ahead of our product across our portfolio for 2023.
Third, we are maintaining a strong profitability profile and using our healthy balance sheet to strengthen our business. Our disciplined capital allocation policy has proven its value in supporting internal investment, but also targeted M&A and increasing returns to shareholders. Lastly, we are reaffirming our full-year outlook for 2023. We continue to expect full-year double-digit CER sales growth in the non-COVID portfolio against a significant decline in COVID-19 product group sales. In closing, we are off to a strong start this year while addressing uncertain macro trends with, as usual, a sharp eye on cost management and discipline in our investments. Our teams are following through on the goals for the year with determination and agility to deliver. We see this progress as important to setting QIAGEN on course for a solid midterm growth trajectory.
With that, I would like now to hand back to John and the operator for the Q&A session. Thanks a lot for your attention.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch tone telephone. If you wish to withdraw your question, you may press star followed by two. To ensure we can accommodate as many people as possible, please limit yourself to only one question. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question comes from Andrew Brackmann with William Blair.
Hi, guys. good afternoon to you. Thanks for taking the questions. Maybe just to start on guidance here. Appreciate all the commentary. I think it's straightforward and no real surprises. Maybe if I could just ask on SampleTech. Obviously, nice growth in the quarter. How should we sort of think about some of the durability of that low double-digit non-COVID growth? I think you called out instrument upgrades as assisting there, but can you maybe help quantify where we are in that upgrade process and how much runway is left there? Thanks.
Thanks a lot, Andrew. As a very quick comment, I would say, we have no reason to change what we have been saying for a year. First of all, SampleTech is part of our DNA. This is where we have a clear leadership on manual and also on automated solutions. Therefore, what we said back in 2021, which was expecting a mid-single-digit growth for this portfolio, is still perfectly our target. Why? First of all, because COVID-19 has strengthened our leadership and helped us to gain market shares. Second, because we are probably the only company in this domain where we have systematically upgraded our instrument offer for the last four years, and we will continue to do so. As a reminder, QIAcube became QIAcube Connect. EZ1 became EZ2.
Every time we differentiated features for our customers. We will have an upgraded version for QIAsymphony, our flagship instrument, as well. Third, because we have continued to launch innovation. COVID, for example, gave us the opportunity to launch a completely revolutionary liquid-based protocols. We continue to invest in very useful research application. Microbiome, for example, SampleTech for liquid biopsy, plant analysis, soil analysis. This was all in all, I believe we have strengthened our SampleTech dominance with COVID-19 and post-COVID-19, we continue to believe in a mid-single digit growth for this portfolio.
Thank you. We'll take our next question from Aisyah Noor with Morgan Stanley.
Good afternoon. Thanks for taking the question. just one on pricing. Could you comment on the pricing levels you've been able to put through in the quarter, and separately in Japan, since the launch in April, what kind of pricing you are expecting for QIAstat in Japan? Thank you.
Thanks for the question, Aisyah. On the pricing, first of all, it's worth highlighting again that price increase is a tradition at QIAGEN every year. It starts in preparation around November, December, and it's passed and communicated to customers on January each year. Last year was a bit exceptional because we had an inflationary also specific context. Therefore, in addition to the traditional 2.5%, 3% price increase that we pass every year around January, last year in June, July, we passed another price increase much higher, around 6%-7%. In January of this year, we passed a new more normalized price increase of around 2.5%-3%. This is paying off. We have a clear objective in numbers for the year.
This number obviously is fully factored in our guidance for 2023, and we monitor our progresses against this guidance every week. I'm talking the price objective. To your question in Japan, QIAGEN sells on innovations and on quality. Our syndromic panel for respiratory has a lot of value, an unprecedented level of automation for syndromic testing, as you know. The ability to deliver CT values compared to a just yes and no answer. There is no reason we would basically decrease the price in Japan. The price in Japan will be basically in the framework of the global price, which is, as you know, for a respiratory panel between EUR 90 to $100 per panel.
We'll take our next question from Dan Arias with Stifel.
Yeah. Hi, guys. Thanks for the questions. Thierry or Roland on NeuMoDx. This is a platform that's obviously in the middle of the transition from heavy COVID use to lower COVID use. It does sound like you're making some progress with the non-COVID adoption. Would you be able to put some context to utilization today or just where you think you end up for the year compared to the levels that you saw at the COVID peak? I know you don't talk about things in terms of annualized pull-through, but it would just be really helpful to kind of understand, you know, where usage is on a relative basis and what the trajectory back up looks like for that platform. Thanks much.
Thanks a lot, Dan. As a quick reminder, first of all, number one, NeuMoDx addresses mid to high throughput volume in laboratories, in PCR infectious diseases mainly. Which means that a full utilization of a NeuMoDx system is supposed, obviously, to bring meaningful proof, pull-through per system. I'll come back to that. Second, we already are in a positive situation in Europe, where we already have one of the largest available menu for infectious diseases on NeuMoDx. It includes blood-borne viruses, HIV, hepatitis B, hepatitis C, sexually transmitted diseases, and other applications. It is true, as we already disclosed for the last two years, that NeuMoDx was obviously very much driven by COVID utilization in 2021, a bit less in 2022.
We said in some geographies, especially in the US, that up to 70% of the performance of NeuMoDx during COVID was driven by COVID. This is why we are very pleased to see the non-COVID usage progression, which is up by more than 50%, obviously, where we have the menu, which is in Europe. In the US, we continue to forecast submissions every year. For example, at the moment, CT NG in the US as we speak. Do not forget that in the US, we can leverage also the fantastic feature of NeuMoDx, which is to be the only system on the market at the moment where customers can use randomly the platform either for regulated assays or for laboratory developed tests. That's a strength. Obviously we want to continue to submit every year to the FDA. That's the key success factor for NeuMoDx.
Now, precisely to your question, you need to understand that we have two configuration of NeuMoDx, a 96 system, mid volume, and a 288 system, higher volume. When a system is in a full utilization of a complete menu, which once again starts to be the case in Europe, it's still not the case in the U.S., expecting an average pull-through on a normal platform of around $100,000 per year plus is what we should have in mind.
Thank you. We'll take our next question from Derik de Bruin with Bank of America.
Hi, this is John on for Derik. I wanted to ask on the margin progression, could you update us on your expectations for the operating margin for the rest of this year? How should we think about that going into 2024? In terms of China, you're seeing headwinds there still, of course. How has this quarter compared to your expectations and if you have any outlook given that you're reinvesting in the region? That would be great. Thank you.
Thank you, John. What I propose, Roland, would you like to take the question on margin, and then I can chime in on China?
Yeah, happy to do so. Hi, John. Yeah, I know it's quite obvious that we do expect actually a healthy margin improvements more or less sequentially over the course of the year. I do think what we have said before is that there is clearly leverage opportunities for us in general on the operational side. R&D, we clearly continue to invest into our five pillars of growth. Nevertheless, also year Q1 was probably a bit higher than what you should expect to be normal for the course of the year. I think that is going to normalize around, let's say, 10% of revenues. We will continue to see operational benefits around SG&A. Our digi-digitalization strategy is still has some lean way to go and will have an impact.
Of course, scale in general will be important for us. We clearly expect margin progression not only moving into 2024, but clearly also over the course of 2023.
Thank you, Roland. Regarding China, first of all, I mean, we need to remind everybody that our exposure to China, which is around 6% to 7% of our global sales, is probably more limited than some of our peers. We do consider China as an important market. It's probably the second market in the world in size. It's a very specific market. It's a market which is under significant pressure from the authorities to make sure that people are localizing activities in China. It's not about selling to China, it's about manufacturing and even more doing research and development in China. How do we address that at QIAGEN? First of all, we do have a site in Shenzhen for local R&D and manufacturing. We are equipped to localize part of our portfolio.
Second, which is probably a bit more specific and original and differentiated, we also have a second brand in China selling made-in-China products. It's a second brand which is fully consolidated in our global revenues, but which is behaving from a sales marketing standpoint, completely independently in China and from QIAGEN China. To come back to Q1, first of all, we have a base effect. We had quite some impact in Q1 of 2022 in diagnostics, but also in life science from some COVID sales in China. This has very much gone down. If you look at the non-COVID sales in China, it's slightly positive for Q1, but it doesn't compensate obviously the base effect of the non-COVID. However, we remain positive that the non-COVID activities should improve sequentially quarter after quarter for two reasons.
First of all, because of the nature and strength of our portfolio locally. Second, because we believe that the overall Chinese economy will also improve sequentially quarter after quarter. Attention, adjustment to local specificities, and little exposure to ups and downs of the market. This is how I would summarize.
Thank you. We'll take our next question from Odysseas Manesiotis with Berenberg.
Hi. Thanks for taking my questions. I've got three, please. On QIAsymphony Boost, your next platform here. Could you please share a bit more color on the timelines and the key specifications that you'll be upgrading? Seeing that a few other digital upgrades for your other SampleTech platforms have been received quite well, would it be sensible to think that this could help a lot with taking your growth trajectory at the high single digits for a couple of years for SampleTech? Then a couple of quick ones for Roland. On the interest dynamics, understand you're guiding around $60 million for the full year, but what dynamics do you expect to not be as pronounced in the following quarters?
Lastly, for your COVID-related sales this quarter, could you please give us a rough description of how these sales are split between divisions? Essentially, which COVID-related product groups have been more resilient than others? Thank you.
Thank you. Roland, would you like to take the interest and COVID split, and then I'll move to the QIAsymphony and SampleTech?
Yeah, happy to do so. Also hello from my side. Yeah, the COVID split, as I said, I think we haven't done so in the past as well. We're not going to break that down. We rather looking forward that we have to stop about or that we can stop talking about COVID latest end of this year because it is rather sometimes even more confusing than others. Again, you've seen the total COVID numbers released, and then I don't think you really want to break it down further. On the interest income, I think you clearly have seen recent developments here as well. You have seen the Q1 performance. As you said, there is probably an expectation for the full year out.
Have also in mind, I think I said it in the script as well, that we have a $400 million repayment in the Q3, where right now we most likely are not planning to refinance it. That is clearly a cash draw on to QIAGEN as well. I think that probably explains how do we get to our numbers.
Thank you, Roland. Coming back to QIAsymphony Boost and Sample Tech. First of all, thank you for the comment. Yes, indeed. The market is really accepting and acknowledging the value of the two precedent upgrades, QIAcube Connect and EZ2 Connect. Regarding QIAsymphony Boost, first of all, let's us highlight that the current QIAsymphony, which is a leading platform of the market, is still having a healthy number of placements per year, which is remarkable for a leading platform. We want to upgrade it, probably launching the new solution by the second half of 2024. We have different features, one of which, I'm sorry, being higher volume input, which is going to be extremely key for application around liquid biopsy.
In our mind, without disclosing too much for today, we believe that, continuing to invest in even higher throughput system could be an option for our company.
Thank you. We'll take our next question from Dan Brennan with TD Cowen.
Great. Thank you. Thanks. Another question. Maybe just a two-parter. First one just on sequencing. Just, you know, there's been obviously a lot of new instruments being launched, been some kind of volatile trends there in the back half of last year. There's a lot of excitement on the clinical side, obviously with MRD. I'm just wondering from your positioning, sample prep informatics, just kinda give us a flavor for, like, the type of growth that you envision for QIAGEN and the strategic focus there. Just secondly, I had a question on the balance sheet. You're very underlevered. You've been pretty prudent with, you know, modest tuck-in deals. Just kinda wondering, you know, what's the plan for kinda capital deployment as you look out? Thank you.
Roland, do you want to take the one on the balance sheet? Clearly, yes, underlevered, but, and then we'll move on to strategy on capital deployment, and then we'll go to sequencing and NGS. Roland?
Yeah, happy to do so, and hi, Dan. No, I think it's a fair comment that clearly we had I would say, and still have an exciting stretch of performance at QIAGEN, also generating significant cash flows. At the same time, of course, we more or less believe that our actual capital allocation policy, which actually since 2012 is serving us quite well, is also the one we want to continue with. It will be a combination of investment into the business organically. It will be more or less added by also targeted mainly bolt-on acquisitions. Last but not least, also reviewing on share buyback opportunities.
If you will review, for example, also now, for example, the document for our next AGM, they will, again, also asking for giving the opportunity to do a larger share buyback, going forward as well. I do think the mix so far served us quite well, and we want to continue with that.
Coming to the question on NGS and sequencing. First, I'd like to remind that I really believe that at the end of 2019, when we decided to become fully platform agnostic, not only for bioinformatics, where we were already platform agnostic, but also in chemistry, we took the right decision. Again, as a midcap, we cannot go everywhere, and we need to try to invest anywhere we can take leadership between the number one and the number three position on the market. This is exactly what we have been doing in universal NGS. The market is proving us wrong.
I mean, if you talk to all the newcomers in platform, the Element, the PacBio, Singulex, as well as the established one, Illumina, obviously BGI, they will all tell you that to different level, bioinformatics or chemistry, they do work with QIAGEN solutions. If you were at J.P. Morgan, you probably saw the presentation of PacBio, for example, or Element highlighting again their satisfaction with their collaboration, especially from a chemistry standpoint with QIAGEN. I think it was the right decision to take, and the market is confirming it. As a result, for the overall NGS portfolio at QIAGEN, which is as a reminder, again, a mix of bioinformatics solution and chemistry solution, I don't see why we should not continue to grow at double digit.
We continue, as we explained today, to invest in new chemistry solution. We are clearly at the moment, the number one in bioinformatics solution. As you know, we want to continue to give that activity a new means to grow even faster. This is why I think that expecting a double-digit growth is what we should have in mind.
Thank you. We'll take our next question from Casey Woodring with JP Morgan.
Hi. Thanks for taking my questions. You mentioned you're seeing some cautious spending from customers on instruments. Curious to hear from what customers in particular, you're seeing this cautiousness from? What specific instruments, you know, would feel the impact there? Maybe can you just talk towards your order book, you know, trends, particularly in Europe, given the macro? Thanks.
Thank you, Casey. I think obviously, Roland feel free to chime in whenever you want here, but as a quick first hint, we said, and it was clear in the part from Roland, that placement or reagent rentals are now a bit more favored than pure capital sales. We have been saying that for the last at least year and a half when we were asked, "Do you believe that post-COVID, there will be a significant slowdown of instrument sales?" We always said, "No, the market will continue to renew platforms and invest, but the way to do that might change in favor of reagent rentals." QIAGEN is a company which is very much used to reagent rental. We have been doing that for many years. We will continue to do so.
As Roland explained today, it gives a clear visibility on the expected pull-through and consumption, normally on a priori annual basis. The key success here, the key success factor, is clearly monitor, obviously, every site where you have a reagent rental in place. I think that that movement is going to continue probably for the coming year to year and a half. This is a movement which is clearly true in clinical diagnostic. In life science, most of customers are primarily still buying. I'm not saying that it will be always the case, but they are primarily still buying. When you look at the performance of instruments in the quarter, I think it's healthy. Whether it's placement or capital sales, it's a healthy one and a healthy progression across the lines. Sample Tech, QIAstat, QIAcuity.
This is the situation as of today.
Thank you. We'll take our next question from Patrick Donnelly with Citi.
Hey, guys. Thank you for taking the questions. Thierry, maybe one on QuantiFERON. You know, another really strong quarter there. Can you just talk about what you're seeing in the market? I mean, the conversion has obviously been going on for years, but it seems to be getting stronger, if anything. Maybe just what you saw and then the durability there and maybe a quick one on just the competitive dynamics if you're seeing any change, but really just the core strength of that market and how you're thinking about it going forward.
Thanks for the question, Patrick. Yes, QuantiFERON is obviously a matter of satisfaction. What do we see at the moment across the globe? It's really across geographies. In the very developed countries, Europe, North America, the main lesson is, one, the partnership with DiaSorin is working. Anytime we convert a normal QuantiFERON traditional 4G, for example, customer to automation on LIAISON, we do it, one, with a premium price, and second, most of the time, it translates into an increase of volume. S econd, the potential for conversion of skin tests, and I remind you, antiquated technologies, cumbersome technology, just the fact that for a patient, you need to go twice to a clinician, still represent a significant potential. That's a good segue to your question on competition, by the way.
Yes, there has been rumored, we know that Oxford Immunotec has been acquired by PerkinElmer. We know that, bioMérieux launched a system on the VIDAS. The main competitor here is still the number of skin tests that we have to convert all over the world. We estimate this number to be around 60 million skin tests all over the world. Six zero. If you take a geography like North America, it's already 16, one six million of skin tests. Part of the performance in Europe and North America is clearly the conversion of skin tests. Geographically, in less mature countries, we continue to make progress because here we leverage two things. One, the unprecedented level of publication around the value of QuantiFERON. There is no other product with that level of publication.
Second, years of medical education, medical investment into, for example, pushing for guidelines. This works. You have seen, for example, what we published in Brazil, extending guidelines to, for example, healthcare workers. We see that in many other countries. All this makes us believe that we can continue to have a double-digit growth profile for QuantiFERON. Obviously, we bet on a more, let's say, low double-digit growth for one reason, not that we are becoming pessimistic. It's just that at the end of the year, we still target $360 million for this activity and continue to grow at double digit. When you reach $360 million, it's already a performance.
Thank you. We'll take our last question from John Sourbeer with UBS.
Hi, thanks for taking the question. just a couple here digging into on the QIAcuity digital PCR platform. Your sales continue to be strong there. Can you just talk a little bit on customer mix across research, pharma, and clinical and potential menu expansion there? Any thoughts on the competitive landscape with a few others entering the digital PCR market as well? Thanks.
Thanks, John. Starting with the second half of your question, the market dynamics. I continue to believe that the market is probably around $400 million total at the moment. What is important is the growth of this market, and it's clearly a very dynamic growth. I really believe that in the coming three years, this market will already be around $1 billion. If you go beyond three years, we confirm that this is a total value that we see at around $3 billion for this market. It's a very dynamic one. We can take really significant market shares and including leadership. When you refer to the mix now for QIAcuity of customers. First reminder, at this moment, QIAcuity is a life science product on our portfolio. Mainly we are targeting three kind of customers.
Research, academia, where you will see mainly placement of what we call our one plate and four plate system. Since the second half of last year with the launch of our biopharma menu, the pharma market, where here we will be targeting higher throughput and obviously the sales of our eight plate system. As we have disclosed to the market, we are preparing the launch of QIAcuity to the clinical market as well. In other words, we want to make it a regulated platform, and we are perfectly on track. At this moment, as we have said at J.P. Morgan, we believe that we will be able to submit the platform QIAcuity to IVDR and the FDA by Q1 of 2024. Our strategy there is to start with application in oncology.
We believe that's the biggest at the moment, the most quickly addressable market in clinical. The first assay that will be launched on the regulated QIAcuity platform will be BCR-ABL for basically, liquid-based or blood-borne , blood-based cancers. We are well aware that there might be little by little also interesting opportunities for application, for example, in infectious diseases or even neurologic diseases as well. There we are, at this moment, completely open to different strategic options, including partnerships. The key message so far, life science, growing contribution of pharma because we have launched the biopharma first part of the menu last year, moving to clinical also solution starting Q1 of 2024 with oncology as a priority, first step.
Okay, thank you, Thierry. With that, I'd like to end the call here and appreciate your support for QIAGEN. If you have any questions or follow-up topics, please do not hesitate to contact Phoebe and me. Thank you again. Bye-bye.
Ladies and gentlemen, this concludes the conference call. Thank you for joining, and have a pleasant day. Goodbye.