Ned Barnholt has led Agilent Technologies as its president and CEO since it spun off from Hewlett-Packard in 1999. BioCommerce Week reached Barnholt this week to speak about the firm’s life science business and its recent formation of an Integrated Biology Solutions business unit.
When did you first hear about integrated or systems biology?
I started hearing the term about a year, 18 months ago.
Was there anything actionable there?
Not really. At least for me, it was still very new and nebulous, one of those things that has a lot of different meanings to different people. But, we have combined our activities under Fran DiNuzzo, aligned more of our research activities for this systems approach. It is part of the evolution here of the research to take an overall systems approach.
Certainly, it seems like the business tempo is picking up in the IBS unit with recent investment announcements.
It’s really a result of the investment we have put in there over the last year or so. When the rest of the company wasn’t doing well after the telecom meltdown, we weren’t in the position to be able to make as many investments in the life sciences area as we wanted. Over the last year, the company has returned to profitability and our overall performance has been quite good. Because of our overall performance, we are in a better position to make some cash investments and in our equity funding, trying to accelerate our presence in some of these emerging markets.
How does this business compare with others in the company?
We have five major business sectors in the company. Each one is relatively large and a strong business in its own right. We ask each to compare their results to best-in-class competitors. We ask each to have some balance in their portfoliobetween mature businesses and growth businesses. So, the Life Sciences and Chemical Analysis unit has done well in the more mature gas chromatography and liquid chromatography businesses, which has allowed us to invest some of those profits and cash flows into some of the newer, more emerging life sciences areas like genomics and proteomics.
Agilent has penetrated the microarray market to a No. 2 position. Is a No. 2 acceptable for Agilent products in this new market?
I think it’s going to be a big market, and it’s still very early. Life sciences, to me, is about where the electronics industry was 20 or 30 years ago — I think it’s still very early in the game. I think that there [are] going to be a lot of opportunities going forward to strengthen our position in gene arrays and proteomics, and in other areas that will make us significant players in the next 10 or 20 years. We take longer-term views, rather than each product area by itself, and we are trying to put together a portfolio of products that positions Agilent to be a very strong player.
How do you manage this business?
You have to spread your risks across a number of different areas, tracking the trends very carefully. We have a vision where we see the industry going and we are following a lot of key trends and selectively making investments in areas we think are going to have a lot of potential going forward.
We can’t do it all, we have decided. There is no way we can be all things to everybody. So we are focusing our investments in genomics and proteomics, in everything from gene arrays, the reagents, software, and services and support.
When you started this discussion about integrated biology and Agilent, you were in the wake of the burst of the high-tech bubble. Now that you have moved forward financially, is there still the same motivation?
We started in the life science business 10 years ago, starting the gene arrays in HP labs, which later moved to become Agilent Labs. We introduced gene array products about four years ago and have introduced a number of products in proteomics and microfluidic analyzer products. This is not a new thing, we identified it a number of years ago.
We are the largest measurement company in the world. In 2003, we did about $6 billion in revenue, about 75 percent of that related to measurements. For me, it doesn’t matter whether it’s electronic, optical, chemistry, or biology. We still measure things. Our job is to build tools to help customers do their jobs, accelerate research, and the discovery of new drugs.
How does the board of directors view this?
We do a review of each of our businesses once a year, with the board. Chris van Ingen [president, Life Sciences and Chemical Analysis] came in and spent an hour or two with the board, walking the board through the life science strategy, in genomics or proteomics, and talked about how it is evolving. They are very supportive, very excited about our life sciences activity.