Chris van Ingen, the head of Agilent Technologies’ Life Sciences and Chemical Analysis business unit, told analysts Monday that there is a “resurgence” in DNA analysis based on microarray-based applications for comparative genomic hybridization and location analysis.
Microarray analysis of RNA is the larger part of the microarray market, where Agilent is considered the No. 2 player after dominant Affymetrix. It’s a market that is regarded as nearing maturity, with sales growth leveling off as whole-genome microarrays move toward near-commodity status.
But van Ingen said the application of microarray-based CGH and location analysis will drive short-term growth for the life science segment of the LSCA unit, which sells genomics and proteomics tools, including CGH- and location-analysis microarray products, as well as pharmaceutical analysis tools.
“The microarray market for gene-expression profiling and genotyping is still fluctuating in growth but the new applications will fuel growth in gene expression higher than 8 to 12 percent,” said van Ingen, speaking at Agilent’s annual analyst meeting in New York on Monday. “It’s still a small portion of our business.”
Agilent does not provide financial details of its genomics and proteomics products.
Still, van Ingen said, without its genomics and proteomics products, the LSCA unit “would not be as profitable.”
Agilent is projecting LSCA revenues to grow by 8 to 12 percent next year. The unit recorded total revenue of $1.3 billion in FY ‘03, up 10 percent from $1.1 billion for FY ‘03. Meantime, the $3.1 billion overall market that the life sciences segment serves, according to Agilent estimates, grew from 8 to 12 percent last year.
“Last year was [LSCA’s] best performance in at least a decade,” he said.
Van Ingen, who started his career at Hewlett-Packard in 1977 as a mass spectrometer sales engineer in the Netherlands, has been an executive with LSCA since 1999. He was appointed to head the LSCA unit in 2001 after Agilent spun off HP and has led the unit since then.
He was one of seven company executives to join CEO Ned Barnholt at the six-hour briefing session.
In his formal presentation before some 80 analysts and investors, van Ingen pointed to systems biology as a key growth driver for the LSCA business segment.
“The emergence of what we call systems-biology applications, of not only what we do in genomics and proteomics, but combining application spaces, is one of the key drivers as we move our business forward,” he said. Agilent’s approach to this marketplace is to take its core technologies in this area — microfluidics, microarrays, chromatography, and mass spectrometry — and create products that address workflows, he said.
Van Ingen said that the definition of systems biology, which Agilent refers to in its marketing as integrated biology, varies widely.
“If you asked 15 people what it means, you will get 15 different answers,” he said. “For us, it is combining different application spaces to help researchers understand biological pathways.”
In an informal presentation to much smaller groups in the afternoon session, van Ingen discussed in detail some of the unit’s initiatives:
Agilent has a protein microarray development program in the company’s central research lab organization, but van Ingen said the company has not made a decision on when it might commercialize the technology.
“There is a lot of fundamental work to be done and we may have to focus on a specific disease in order to choose the content [to go on it],” van Ingen said. “The window to the market is a year to a year and a half away.”
The company has recruited Michael McNulty as senior director for a new molecular diagnostics program, van Ingen said. He will report directly to van Ingen as the program initiates.
McNulty served as vice president of lab operations and chief compliance officer for Berkeley HeartLab and was employed there since 2003. Previously, he was senior vice president of business development at ThauMDx, a medical diagnostic venture, and prior to that, he was a manager with SmithKline Beecham Clinical Laboratories, now Quest Diagnostics.
The company is preparing to bring online a new facility in Germany that will manufacture liquid chromatography and microfluidics products, including products developed with Caliper, van Ingen said.
The company manufactures its gas chromatography products in Shanghai, its ICP-MS products in Japan, and its mass spectrometry and microarray products in Santa Clara, Calif., he said.
“We have a small [manufacturing] footprint and we’d like to keep it that way,” van Ingen said.
The acquisition of Silicon Genetics in August gives Agilent another entry into the informatics sector, in addition to its investment stake in Rosetta Biosoftware, a business unit of Rosetta Inpharmatics, a wholly owned subsidiary of Merck. Agilent is the exclusive distributor for Rosetta Resolver and Rosetta Luminator gene-expression data-analysis systems.
Van Ingen said Rosetta’s products address the enterprise level, with sales to 35 of the largest pharmaceutical companies, while Silicon Genetics products target researchers’ desktops.
“We want to optimize workflows and use that as a competitive advantage,” he said. “Our bioinformatics efforts are to support that vision. Not a lot of companies get to the benchtop and have tied it together at the back end. We are taking a phased approach and the question is can we tie it together.”
Where’s the money? The NIH budget may be flattening, but van Ingen said that the funding affects sequencing efforts more than genomics and proteomics research.
There is no unified position on pharma spending, he said. For genomics and proteomics, he said, some companies are doing everything themselves, some are forming alliances with biotechnology companies, and others are outsourcing to contract research organizations.
“The situation varies by company and by geography,” he said.
— Mo Krochmal ([email protected])