Beckman Coulter's San Diego-based Cell Analysis and Development Center — which houses R&D and service for the IC 100 high-content screening technology that Beckman acquired along with startup Q3DM in late 2003 — is one of the at least three facilities that Beckman said it plans to close as part of its recently announced reorganization, according to sources close to the situation.
As part of the closing, most of the employees in the cell imaging and analysis division have been laid off, according to two former officials, virtually removing Beckman as a player in the rapidly growing cellular-imaging space.
Though the layoffs in the cell imaging and analysis division are a small part of an overall reorganization taking place at the company — the layoffs amount to around 3 percent of the company's total workforce — it is surprising that Beckman would jettison a technology it acquired less than two years ago in order to keep up with other multi-tool biotech vendors such as Becton-Dickinson, Molecular Devices, GE Healthcare, and Fisher Scientific.
Late last week, a Beckman spokesperson confirmed in an e-mail that the firm would no longer market the IC 100 product, but added that the company "will support existing customers of the system and continue to look for other applications for this technology." The spokesperson also said the firm has not broken down the number of layoffs by business group, but "employees from Q3DM were impacted by the reorganization, as were many areas of the company worldwide."
"Beckman's leadership … determined the best way for the company to increase its annual growth rate was to first review its strategic plans and initiatives and then bring all new market and product investments into alignment with this reformulated strategy. Imaging simply is not on the short list of investment opportunities they felt would deliver the best returns."
This past summer, Beckman announced a restructuring, under which it would lay off 350 employees and shift its sales focus to leasing instruments to customers rather than pursuing big ticket purchases. In its recent third-quarter earnings release, the firm said it was closing at least three facilities, selling two parcels of vacant property in Florida and California, and harvesting or discontinuing seven product lines including its BSE testing initiative and ORCA robotic module.
Beckman Coulter President and CEO Scott Garrett said in a statement at the time that he expects the layoffs will result in a benefit of up to $2 million in the fourth quarter of this year, as well as "$15 million of annual savings in 2006, growing to $20 million of annual savings in 2007 and beyond."
"Beckman's leadership … determined the best way for the company to increase its annual growth rate was to first review its strategic plans and initiatives and then bring all new market and product investments into alignment with this reformulated strategy," one former official wrote in an e-mail to BioCommerce Week sister publication CBA News last week. "Imaging simply is not on the short list of investment opportunities they felt would deliver the best returns."
The former official, who spoke on the condition of anonymity because Beckman is a publicly traded company, indicated that it likely wasn't a problem with the platform that made Beckman change its mind, and also made it clear that he didn't have an axe to grind with his former employer.
"I don't think that there is any question about the potential success for the product line," the former official said. "But I don't think that really entered into it. I think Beckman had to rationalize, go through every business that it's in, and say 'Where are we going to play to win? Let's not dabble.'
"And I applaud them for that," the former official added. "Garrett … has to do that, and I applaud him for stepping up and causing the management team to go through that exercise. Presumably in the long run, that's going to help Beckman achieve a higher growth rate. So you can't find fault with that process."
So why exactly did Beckman decide to drop the HCS product? Company officials did not respond directly to that question, but the Beckman spokesperson did say, "As we implement our reorganization plans, certain projects, functions, facilities, and employees within our company may be affected. These changes were deemed necessary for us to position the company to deliver on our business strategies and achieve our goals."
Is There a Future for the Technology?
The original stakeholders of Q3DM are left wondering if there is a future for the automated microscopy platform, which was known as the EIDAQ 100 before Beckman acquired Q3DM. Beckman still "owns certain aspects of the technology and has a sole and exclusive license to the remainder," according to the Beckman spokesperson, but its plans for the technology remain unclear.
"As we implement our reorganization plans, certain projects, functions, facilities, and employees within our company may be affected. These changes were deemed necessary for us to position the company to deliver on our business strategies and achieve our goals."
"It's tremendously disappointing to … the people that were on the team," said the former official. "In certain respects, our software is recognized as market-leading. It's always debatable how valuable instrumentation is, [but] we had, I think, superior instrumentation in many respects.
"But clearly, people responded to our software and our whole plug-in architecture," the former official said. "But the way that Beckman handled this, they basically decided to not be in the business, laid everybody off except one person, who is sort of helping support customers while they clean up the mess, and didn't give [the former Q3DM employees] an opportunity to go out and find another home for it."
Beckman hasn't "really told us what they're going to do," with the technology, the former official said. "They don't own the underlying technology — Q3DM [does], and since it hadn't been completely paid for, I think there is a discussion that I would expect Beckman to have with Q3DM. I don't know if that's been had, or not."
The two former officials interviewed for this article have a stake in the IC 100 technology and remain hopeful that it will be resurrected with another company, they said.
"There is a management team that is interested in taking this forward, and if there are interested parties out in the marketplace that want to inquire, they should do so soon, either with Beckman or the Q3DM folks, because the more time that goes by, the more the team will be dissipated and unable to be reconstituted," one of the former officials said.
"Before we're all off doing our next thing, it would be nice to find out if there are parties out there that think this can be resurrected," he added.