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& Assay Technologies QIAGEN – DIGENE: Creating a Leader in MDx, June 4, 2007 - 1 - QIAGEN & DIGENE Announce Merger The New Market and Technology Leader in Molecular Diagnostics Employee Meeting Germantown, June 4th 2007 June 4, 2007, 1:00am EST Filed by: QIAGEN N.V. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14d-2 under the Securities Exchange Act of 1934 Subject Company: Digene Corporation Exchange Act File No. 000-28194 |
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& Assay Technologies - 2 - QIAGEN/DIGENE – Creating a Leader in MDx Creating a market and technology leading company in sample and assay technologies in molecular diagnostics . QIAGEN and DIGENE announced yesterday to combine the two companies to create a market and technology leading company in sample and assay technologies in molecular diagnostics . The Deal Approved by Boards of Directors of both companies QIAGEN is to acquire 100% of DIGENE’s stock $1,6 billion, 55% in cash, 45% in stock Conservatively financed – QIAGEN remains financially strong . This strategic transaction combines QIAGEN’s leading portfolio of sample &assay technologies with Energy’s leadership in HPV and cancer-targeted MDx This creates a global leader with over $350 million of molecular diagnostics revenue and $700 million overall 2’600 employees |
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& Assay Technologies - 3 - QIAGEN/DIGENE – Creating a Leader in MDx 0 50 100 150 200 250 2003 2004 2005 2006 2007E 0 5 10 15 20 25 30 35 40 45 Revenues Operating income QIAGEN and DIGENE at a Glance Revenues excluding the synthetic DNA business unit, sold in Q2 2004 Market- and technology leader in Sample & Assay Technologies Founded: 1984 Headquarters: Hilden, Germany Germantown, MD Employees: 1,990 International subs: 29 Rev 2006 (US$ m) 466 Listing: NASDAQ: QGEN Frankfurt: QIA Absolute market leadership in HPV MDx testing, only FDA approved test Founded: 1987 Headquarters: Gaithersburg, MD Employees: 570 International subs: 7 Rev 2006 (US$ m) 178 Listing: NASDAQ: DIGE DIGENE figures converted to calendar year (CY) 0 50 100 150 200 250 300 350 400 450 500 550 2003 2004 2005 2006 2007E 0 20 40 60 80 100 120 140 160 Revenues Operating income Revenues CAGR 2003-2006 15% Revenues CAGR 2003-2006 32% |
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& Assay Technologies - 4 - QIAGEN/DIGENE – Creating a Leader in MDx . MISSION As the innovative market and technology leader, QIAGEN creates indispensable solutions that set standards in enabling access to content from any biological sample. . Our mission is to enable our customers to achieve outstanding success and breakthroughs in research, applied markets, drug development and molecular
diagnostics. We thereby make improvements in life possible.
. . Our commitment to the markets we serve drives our innovation and leadership in all areas where solutions such as sample collection, stabilization, separation, purification, storage, handling and processing are required. . The exceptional talent, skill and passion of our employees are key to QIAGEN’s excellence, success and value. QIAGEN‘s Vision And Mission Statement |
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& Assay Technologies - 5 - QIAGEN/DIGENE – Creating a Leader in MDx The Combination Accelerates QIAGEN’s Molecular Strategy DIGENE’s highly focused strategy in MDx is a unique fit with QIAGEN QIAGEN’s strategy: leadership in “Sample & Assay Technologies” – in research, pharma, applied testing and MDx Same target customers in MDx Superb brands and reputations HPV testing is fastest growing, large segment in MDx with over $1 billion market potential DIGENE’s strong IP positions in HPV – over 70 subtypes HPV bridges QIAGEN’s virology leadership into emerging, fast growing oncology segment Important HPV assay creates unique value for QIAGEN’s platforms and assay breadth Leading regulatory expertise – only FDA approved test for HPV Great fit with QIAGEN’s emerging pipeline Enhanced growth profile and combined profitability leads to strong value creation QIAGEN’s Breadth and Platforms +
DIGENE’s Content |
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& Assay Technologies - 6 - QIAGEN/DIGENE – Creating a Leader in MDx The Combination Accelerates DIGENE’s Development Goals Highly attractive value for DIGENE shareholders Significant premium today Significant combined upside potential Ongoing investment in the future QIAGEN’s unparalleled sample and assay technology breadth creates opportunities for future: Adds key assay technologies such as multiplexing (QIAplex), PCR, isothermal technologies Adds key sample technologies such as DNA processing from cervical swabs QIAGEN’s broad assay portfolio offers new value for DIGENE’s customers and Next generation platform programs QIAGEN’s global sales strength accelerates rapid and global rollout DIGENE can utilize QIAGEN’s operations and infrastructure which are needed for next phase of growth QIAGEN’s Breadth and Platforms + DIGENE’s Content |
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& Assay Technologies - 7 - QIAGEN/DIGENE – Creating a Leader in MDx Absolute leadership in key segment of MDx: HPV testing The DIGENE™ HPV Test portfolio is the only FDA-approved test portfolio for the human papillomavirus (HPV) Exclusive IP positions on key high-risk types >70 HPV types Regulatory leadership Focus on women’s health Portfolio includes molecular diagnostic products for HPV (over 10 million tests sold in 2006) Chlamydia and gonorrhea Blood viruses such hepatitis B and CMV Proprietary Hybrid Capture technology Markets its products in more than 40 countries worldwide Headquartered in Gaithersburg, Maryland Overview of DIGENE Corporation Leader in Critical Area of Women’s Health |
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& Assay Technologies - 8 - QIAGEN/DIGENE – Creating a Leader in MDx A Critical Disease Target: Human Papilloma Virus (“HPV”) Cervical cancer is the #2 cancer for women worldwide WW over 470k cases/year causing more than 230k deaths In US almost 10k cases/year, more almost 4k deaths One woman dies every two minutes from cervical cancer HPV is the proven cause of cervical cancer Pool of “eligible” candidates for DIGENE HPV screening is huge and largely ‘untapped’ DIGENE is positioned as the “standard of care” for cervical cancer screening Prevalence of HPV in Cervical Cancers Worldwide 99.7% |
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& Assay Technologies - 9 - QIAGEN/DIGENE – Creating a Leader in MDx Vaccines are a Key Growth Driver for HPV Testing Vaccines Are a Great Growth Driver for HPV Testing Significant marketing budgets advocating importance Target age groups Target vaccination age: 10-20 years Target testing age: >30 years It would take >20 years to phase over Vaccinations Limited to 2 “high risk” HPV types (70% of cancers) DIGENE HPV Test tests for 13 types |
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& Assay Technologies - 10 - QIAGEN/DIGENE – Creating a Leader in MDx Significant Synergy Value Highly Synergistic Capabilities and Assets Sales (Q1*4) 512 210 Sales in MDx (approx) 154 210 Sales strength Global North America Sales force size in MDx 120 150 Sales force target in MDx Clinical Laboratories Clinical Laboratories, Physicians Assay portolio Broad: 120 tests - virology, microbiology, genetic, pharmacogenetic HPV Technology portfolio Strong - sample and assay technologies HC2 Operations US, D, CH, CN US Employees 1990 570 |
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& Assay Technologies - 11 - QIAGEN/DIGENE – Creating a Leader in MDx Combined Revenue Distribution – Highly Complementary Based on Q1 2007 By Product Groups By Geographic Regions By Customer Groups Europe 46% North America 39% Asia 13% North America 85% EU 12% North America 52% EU 36% Asia 9% Consumables 89% Consumables 92% Consumables 90% Instruments 10% Instruments 8% Instruments 10% MDx 100% MDx 48% MDx 27% Pharma 24% Pharma 17% AT 11% AT 8% Biomedical 18% Research 20% All figures are estimates + RoW Research 27% |
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& Assay Technologies - 12 - QIAGEN/DIGENE – Creating a Leader in MDx Dissemination One Core: Sample and Assay Technologies QIAGEN sample and assay technologies Research: were there when researchers in academia explore the virus Pharma: were there when Merck develop the vaccine Molecular Diagnostics: are used to test for HPV are helping eradicate a disease that kills one woman every 2 minutes are making improvements in life possible” Dissemination |
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& Assay Technologies - 13 - QIAGEN/DIGENE – Creating a Leader in MDx Disseminating Technologies Into Four Markets Product and Technology Continuum Academia Life Science Research Applied Testing Molecular Diagnostics Pharma Research & Development SAMPLE Technologies ASSAY Techologies QIAGEN Case |
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& Assay Technologies - 14 - QIAGEN/DIGENE – Creating a Leader in MDx QIAGEN and DIGENE A decade long year partnership in Molecular Diagnostics >10 year partnership between QIAGEN and DIGENE DIGENE products utilize QIAGEN sample and assay technologies Example: RapidCapture system Core platform of DIGENE FDA approved solution, used in HPV testing DIGENE sole marketer Next generation platform development programs Partnership – Similar cultures – Focus - Excellence |
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& Assay Technologies - 15 - QIAGEN/DIGENE – Creating a Leader in MDx QIAGEN and DIGENE - Direct Neighbors Germantown and Gaithersburg MD Companies are 5 minutes apart (2.8 miles) |
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& Assay Technologies - 16 - QIAGEN/DIGENE – Creating a Leader in MDx World-Class Capabilities and Organization to Ensure Success Great breadth and depth of teams Similar cultures and strong working relationship Strong synergies: This is about growth: allows retention of talent base Integration plan well-developed 12 month process, clear timelines Mirrored teams Being neighbors a big advantage Maryland: headquarters of MDx business QIAGEN has proven track record in very successfully integrating – 12 companies in last 3 years. Business as usual until closing (August/September) We are Huge Growth Potential - Increasing Awareness |
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& Assay Technologies - 17 - For Internal Use Only Four Phases to an effective Integration of Energy Phase 0 Pre-Process planning Phase 2 Detailed planning & decision making Phase 3 Implementation & execution Phase 1 Issue identification and action planning Appoint and launch integration teams Communicate Stabilize the business Establish resource baselines for both companies Identify key integration issues and areas for synergy realization Communication Identify integration opportunities Develop/decide on future business structure Validate plans in detail Initiate execution of short term actions Return first units to “business-as-usual” Finalize Budget 2008 Communicate Resolve open issues Implementing decisions Monitor target achievement Manage as single company Communicate Define integration process and timeline Define integration approach & responsibilities Plan, plan, plan Agree on integration resources, project teams, charter & external support Develop organizational and core operating model Determine targets Communication “Pre-closing” “Pre-closing” “Plan Budget 2008” “Plan Budget 2008” "Achievements" "Achievements" “Pre-annoucement/ Pre-closing” “Pre-annoucement/ Pre-closing” Day of public announcement Ca. September 2007 December 2007 June 2008 |
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& Assay Technologies - 18 - QIAGEN/DIGENE – Creating a Leader in MDx Integration should be accomplished in 6 – 12 months 10 20 30 40 50 10 20 30 40 50 Load dependent on requirements Handover Resources FTE Integration Accomplished Line function Take over responsibilities Jul Jun May Mar Apr Jan Feb May Jun Jul Oct Nov Aug Sep Dec Aug Sep Apr Line function responsible Integration Project Functional project In transition Announcement 3. June Closing Announce- ment Pre- Planing Closing New Budget 2008 Pre- Closing Post- Closing Implementation |
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& Assay Technologies -19 - QIAGEN/DIGENE – Creating a Leader in MDx Project Structure for Integration Special Projects Functional Projects Business Projects Responsible for the bulk of the integration Made up from representatives of the different functions of both companies Develop guide-lines to ensure consistency around the world Responsible for planning and tracking the overall process Help to identify and resolve emerging issues Responsible for leading the integration process Divestments & Acquisition New mission & Steering principles Locations / Property Brand management HR IT Manufacturing R&D Regulatory Administration Marketing Asia Marketing Europe Marketing USA, Americas Global Product Management Distributor Sales Europe Sales Asia Sales USA, Americas Integration office Communication Doug Liu Joe Slattery Doug White Thomas
Schweins Project Team Steering Committee Peer Schatz Daryl Faulkner |
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& Assay Technologies - 20 - QIAGEN/DIGENE – Creating a Leader in MDx Doug Liu – VP Global Operations – QIAGEN Douglas Liu VP Global Operations Doug Liu joined QIAGEN in 2005 MBA from Boston University Science degree from the University of Illinois Multifunctional background in diagnostic Industry Operations Strategic planning and R&D . 20 years track record of success in Molecular diagnostics Bayer Operation Head - Nucleic Acid Diagnostics Bayer Strategic Planning and Consulting Abbott Diagnostics Chiron Diagnostics |
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& Assay Technologies - 21 - QIAGEN/DIGENE – Creating a Leader in MDx Doug White – SVP Sales & Marketing – DIGENE Douglas White SVP Sales & Marketing Americas and Asia Pacific . Doug White joined DIGENE in 2003 Started as VP Sales & Marketing North America Oversees commercial operations incl. Sales, Marketing Service and Support Americas and Asia Pacific . 20 years of sales & marketing experience in health care . 10 years track record of success in Molecular diagnostics SVP Global Marketing at Roche Molecular Systems VP Sales & Marketing at Bayer Vice President of US Marketing at Chiron Abbott Diagnostics |
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& Assay Technologies - 22 - QIAGEN/DIGENE – Creating a Leader in MDx Joseph P. Slattery Chief Financial Officer and Senior Vice President . Joe Slattery joined DIGENE in 1996 Corporation’s finance, accounting, investor relations, treasury, information systems program management operations Mr. Slattery was appointed Chief Financial Officer Oct 2006. . Prior to DIGENE, Joe worked in public accounting KPMG Peat Marwick Ernst & Young LLP . He received a B.S. in accounting from Bentley College and is a certified public accountant. Joe Slattery – Chief Financial Officer DIGENE |
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& Assay Technologies - 23 - QIAGEN/DIGENE – Creating a Leader in MDx Thomas Schweins VP Marketing & Strategy Thomas Schweins – VP Marketing & Strategy QIAGEN . Thomas Schweins joined QIAGEN in 2004 Biochemistry, University Hannover Business Adminstration, USC Los Angeles PhD, Max Planck Institute, Heidelberg . Multifunctional background in Life Science Industry Strategy and Strategic Planning Marketing R&D Post-Merger-Integration . 15 years track record of success in Life Sciences Senior Manager Boston Consulting Group Senior Project Manager Aventis Technology & Business Dev Manager Hoechst |
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& Assay Technologies - 24 - QIAGEN/DIGENE – Creating a Leader in MDx A New Leader in MDx Follows strategies of both companies QIAGEN: leadership in sample and assay technologies – in research, pharma, applied testing and MDx DIGENE: next wave of growth for HPV Creating the new leader in MDx – with broad synergies in Technology Content Channel Infrastructure No changes in staffing planned at QIAGEN other than growth Growth, strength -> new career opportunities, an even better place to be Excellent basis for further growth Most exciting areas in MDx – links into oncology Infrastructure can exploit future opportunities, e.g. content Creating Value with our Strategy |
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& Assay Technologies QIAGEN – DIGENE: Creating a Leader in MDx, June 4, 2007 - 25 - Questions and Answers If you have further questions: Call +240-686 7362 E-mail merger@QIAGEN.com |
Disclaimer Regarding Forward-Looking Statements
Information set forth in this communication contains forward-looking statements, which involve a number of risks and uncertainties. Such forward-looking statements include, but are not limited to, statements about the anticipated benefits of QIAGEN’s products, the timing of the completion of the transaction between QIAGEN and Digene, the anticipated benefits of the business combination transaction involving QIAGEN and Digene, including future financial and operating results, the expected financing for the transaction, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. QIAGEN and Digene caution readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. These include risks and uncertainties relating to: the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule; the parties may be unable to complete the transaction because conditions to the closing of the transaction may not be satisfied; the risk that the businesses will not be integrated successfully; the transaction may involve unexpected costs or unexpected liabilities; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; use and protection of intellectual property; realization of potential future savings from new productivity initiatives; general worldwide economic conditions and related uncertainties; future legislative, regulatory, or tax changes as well as other economic, business and/or competitive factors; and the effect of exchange rate fluctuations on international operations. In addition, the transaction will require the combined company to obtain significant financing. The combined company’s liquidity and results of operations could be materially adversely affected if such financing is not available on favorable terms.
Moreover, the substantial leverage resulting from such financing will subject the combined company’s business to additional risks and uncertainties. The risks included above are not exhaustive. The most recent reports on Form 20-F, Form 6-K and other periodic reports filed with or furnished to the Securities and Exchange Commission by QIAGEN and the most recent reports on Form 10-K, Form 10-Q, Form 8-K and other periodic reports filed by Digene with the Securities and Exchange Commission contain additional factors that could impact the combined company’s businesses and financial performance. The parties expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the parties’ expectations or any change in events, conditions or circumstances on which any such statement is based.
Additional Information
QIAGEN is filing today a Current Report on Form 6-K that will include as exhibits the Agreement and Plan of Merger among QIAGEN, QIAGEN North American Holdings, Inc., QIAGEN’s merger subsidiary and Digene Corporation. QIAGEN intends to file a Registration Statement on Form F-4 and a Schedule TO, and Digene plans to file a Solicitation/Recommendation Statement on Schedule 14D-9, with the Securities and Exchange Commission in connection with the transaction. QIAGEN and Digene expect to mail a Prospectus, which is part of the Registration Statement on Form F-4, the Solicitation/Recommendation Statement on Schedule 14D-9 and related exchange offer materials, including a letter of election and transmittal, to shareholders of Digene upon commencement of the exchange offer. These documents contain important information about the transaction and should be read before any decision is made with respect to the exchange offer. Investors and stockholders will be able to obtain free copies of these documents through the website maintained by the Securities and Exchange Commission at www.sec.gov. Free copies of these documents may also be obtained from QIAGEN, by directing a request to QIAGEN’s IR department at QIAGEN Strasse 1, 40724 Hilden, Germany, or from Digene, by directing a request to Digene at 1201 Clopper Road, Gaithersburg, MD, 20878.
In addition to the Registration Statement on Form F-4, Schedule TO, Prospectus, Solicitation/Recommendation Statement on Schedule 14D-9 and related exchange offer materials, both QIAGEN and Digene file or furnish annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements or other information filed or furnished by QIAGEN or Digene at the SEC’s Public Reference Room at Station Place, 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. QIAGEN’s and Digene’s SEC filings are also available to the public at the SEC’s web site at http://www.sec.gov, or at their web sites at www.qiagen.com or www.digene.com.