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Agilent Says New Liquid Chromatography System Helped Drive Q1 Revenue Growth

This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
 
The Bio-Analytical Measurement half of Agilent’s business drove the firm’s fiscal 2007 first-quarter revenue growth, and company officials cited strong sales of its relatively new 1200 Series LC system as a key catalyst.
 
The 1200 Series platform is a high-speed liquid chromatography system that was launched a year ago and is viewed as key to Agilent’s efforts to surpass rival Waters as the top player in the LC market.
 
Last week, Agilent said that revenue for its Bio-Analytical Measurement segment increased 22 percent to $455 million from $373 million year over year. Operating profit for the segment was $88 million, up 69 percent from last year, while orders grew 14 percent to $433 million year over year.
 
Within the Bio-Analytical segment, life sciences revenue was up 23 percent to $195 million. The company said that growth was “driven by year-end spending in pharmaceutical and biotech,” and sales of the company’s liquid chromatography instruments.
 
“We continue to see increased demand for rapid-resolution LCs, mass specs, microarrays, and informatics tools,” said Bill Sullivan, Agilent’s president and CEO, during the firm’s first-quarter conference call. “These are the areas we have specifically targeted with growth initiatives.”
 
He noted that liquid chromatography and mass spec sales in the quarter more than doubled year over year. “In addition, pharmaceutical spending has improved modestly,” he said.
 
Asia-Pacific revenues for the Bio-Analytical segment “were particularly strong, with China revenues up 34 percent from last year, and India up 38 percent,” said CFO Adrian Dillon during the conference call.
 
“Revenue growth [for the segment] was driven by the continued success of our new 1200 Series LC platform, particularly the rapid-resolution LC columns, and our expanded LC/MS portfolio,” said Dillon. “From a market perspective we saw good demand from large pharma and biotech for fast LCs, mass specs, microarrays, and informatics tools. We are also seeing sustained growth of CROs and generic pharma in China and India, and increased research spending in those countries as well as in Korea and Singapore,” he said.
 
Revenues from Agilent’s chemical analysis business, the second half of the Bio-Analytical segment, were up 21 percent, with growth also driven by the 1200 Series platform for uses outside of life science applications.
 
“As you know, we’ve really organized our whole life science business,” said Sullivan. “The performance of that whole business group is at a record level and solidly profitable.”
 
Acknowledging Acquity
 
A year ago this month, Agilent launched its 1200 Series LC system, a high-resolution, high-speed system, to compete primarily with Waters' Acquity UPLC (see BioCommerce Week 1/25/2006).
 
The platform was introduced about a year and a half after Waters launched Acquity UPLC, which enjoyed first-mover advantage in the high-speed LC market. But Agilent believes that the flexibility and high resolution of its new system, the successor to its 11-year-old 1100 Series liquid chromatography instrument, will enable it to take market share from Waters, as well as other LC vendors that have yet to launch a high-speed instrument.
 
Earlier this year, Thermo Fisher Scientific launched its Accela HPLC platform, which the firm hopes will help it gain market share at the expense of Agilent and Waters. Thermo Fisher CEO Marijn Dekkers recently told investors at the JP Morgan Healthcare Conference that the firm may look to make an acquisition in the LC space, following its recent acquisition of LC sample-prep company Cohesive Technologies (see BioCommerce Week 1/10/2007  and BioCommerce Week 12/20/2006).
 
In a separate announcement last week, Agilent said that it has shipped 1,000 of the 1200 Series LC systems since its launch, keeping pace with market adoption of Waters’ Acquity UPLC. Waters officials recently said that there are around 2,000 installed Acquity systems on the market out of a total of 200,000 HPLCs, regardless of manufacturer.
 

“We saw good demand from large pharma and biotech for fast LCs, mass specs, microarrays, and informatics tools. We are also seeing sustained growth of CROs and generic pharma in China and India, and increased research spending in those countries as well as in Korea and Singapore.”

Acquity UPLC sales were a primary driver of Waters’ recently reported fourth-quarter revenues of $387 million, a 16 percent increase over sales of $332.3 million in the fourth quarter last year (see BioCommerce Week 1/24/2007).
 
“The strong momentum from growth associated with Acquity UPLC throughout the year was augmented by new mass-spec capabilities,” Waters Chairman, President, and CEO Doug Berthiaume said during the firm’s fourth-quarter conference call a few weeks ago.
 
Agilent’s total revenue for the three months ended Jan. 31 increased to $1.28 billion from $1.18 billion year over year.
 
The company’s net income decreased to $150 million, or $.36 per share, from $2.09 billion, or $5.83 per share, in the year-ago period, which included $1.8 billion in income from the sale of the company’s semiconductor products and test solutions businesses.
 
Agilent’s R&D spending increased to $168 million from $165 million year over year.
 
The firm finished the first quarter with around $2.1 billion in cash and equivalents as of Jan. 31.
 
For the second quarter of 2007, Agilent said it expects revenues between $1.3 billion and $1.4 billion, and earnings per share between $.41 and $.45. The company did not provide specific guidance for the Bio-Analytical Measurement business.

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