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Divestitures Still Possibile as Beckman Coulter Wraps Up Restructuring; Sales Force Reorganized

As Beckman Coulter nears the end of its reorganization, begun last summer, the firm is still considering divesting some "minor" product lines or other assets.

"The situation hasn't changed from the original announcement," said Paul Whitlock, a Beckman Coulter spokesperson. "We haven't actually done anything yet, but we continue to investigate those possibilities."

Beckman announced the restructuring, which included a 3-percent reduction in its workforce, last July with an eye on speeding up its revenue growth (see BioCommerce Week 7/28/2005). According to Whitlock, the initial and major part of the restructuring, which also combined the firm's two operating divisions — Clinical Diagnostics and Biomedical Research — into one, is "almost complete."

"It's almost done," he told BioCommerce Week. "There are a few more adjustments to be made in the supply-chain management side, mainly. But from then on, there is no major restructuring — certainly nothing to take a charge against. It's just a matter of continuing to adjust company cost to match market needs."

At the time the restructuring was announced, Beckman President and CEO Scott Garrett said the firm would review "mature product lines, where our choices would most likely be harvest or shut down and possibly divestiture. If there is a valuable cash flow associated with them, a harvest strategy may be appropriate, and if in fact we identify a business that is going to be sustainable but not strategic, we would consider it for divestiture."

"The situation hasn't changed from the original announcement. We haven't actually done anything yet, but we continue to investigate those possibilities."

One business that Beckman shuttered was its 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 (see BioCommerce Week 11/24/2005).

While that part of the business was not considered core to Beckman's growth strategy, the firm is focused on the development of the technologies it obtained through its roughly $140-million acquisition of Agencourt Bioscience last May (see BioCommerce Week 5/5/2005).

The acquisition provided Beckman with Agencourt's Solid Phase Reversible Immobilization (SPRI) technology for isolating and purifying DNA and RNA in its automated sample preparation systems for biomedical research and molecular testing. Agencourt also offers DNA sequencing services using Applied Biosystems' 3700 and 3730xl DNA sequencers. But it also is developing a sequencing-by-synthesis approach to personal genome sequencing based on the polymerase colony, or "polony," amplification technology developed in the lab of George Church at Harvard's Lipper Center for Computational Genetics.

"Both [technologies] form a key part of our strategy going forward," Bruce Wallace, who runs Beckman's nucleic acid testing business, wrote to BioCommerce Week in an e-mail this week. "We will continue to develop the SPRI-based chemistries with differentiated products, specifically products that address the molecular diagnostic testing market. In the case of the genomic services business, we plan to expand both our geographic reach as well as our product offering."

He said the firm has "no specific plans to out-license" either technology.

Sales Force Reorganized, But Not Trimmed

Last July, Garrett said the firm's sales force would focus around geographic areas and major market segments. "The US diagnostics team will be targeting clinical markets in the US," he said. "With its size and complexity it requires its own dedicated management team." The firm's international life sciences team will be responsible for all business outside of the US in the life sciences markets, he added.

The restructuring included a reduction in Beckman's North American sales regions from five zones down to three — west, central, and east. Whitlock said the reason for this was to create a "lighter infrastructure."

In addition, he said each of the three zones is run by a vice president responsible for all sales, not just life science or diagnostics, in that zone. "So, the idea is to make common as much of the behind-the-scenes infrastructure as possible," Whitlock said.

The sales management teams maintain a dedicated focus on diagnostics or research, but they report to a "VP leader based on geography, rather than product group. This helps us move further towards the 'one company' approach that Scott Garrett has talked of, where we can more easily share assets across departmental boundaries," said Whitlock.

"But the other point is down at the customer end. The customer should see no difference," said Whitlock. "We're not making any more changes than we have to in the customer interface," and customers are interacting with the same salespeople as before.

According to Whitlock, the restructuring led to a net reduction in staff of 350. He noted that the number of employees laid off exceeded this number, "but we've been hiring back different people." He said the job cuts did not take place in any one specific area, and said that while there was no reduction in sales staff, "there may have been some reductions in the admin support behind it."

"We've been hiring in just about all areas — in sales, marketing, admin, in research, in supply chain," he said. "They are people with different skill sets than the ones who left the company."

— Edward Winnick ([email protected])

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