Skip to main content
Premium Trial:

Request an Annual Quote

As DNA Sequencing Revenues Plummet, ABI Refreshes its Prism Product Line from 2000

With sales from its DNA sequencing cash cow falling to a three-year low, Applied Biosystems on Tuesday launched a new line of genetic analyzers for low- to medium-throughput labs, refreshing a product line that predated even the company’s name.

The company this week introduced the 3130 series genetic analyzers at the American Society of Human Genetics meeting in Toronto. The new products replace the ABI Prism 3100 and 3100-Avant genetic analyzers, which were originally introduced in April 2000, predating the company’s name change from Perkin-Elmer Corp. in November 2000, and the completion of the first assembly of the human genome on June 26, 2000.

Meantime, the company released financial results from the quarter ending Sept. 30, the first quarter of its fiscal year 2005. ABI reported revenues of $390 million, compared to $382.7 million in revenues for the year-ago quarter. The growth reflected an increase of 2 percent attributable to favorable foreign currency exchange rates.

Revenues from the company’s DNA-sequencing products were $116 million, the lowest revenue performance for at least the last 12 quarters, and down from $124.8 million for the same quarter in 2003.

ABI’s net income was $37 million, compared to $33 million for the prior-year quarter.

The company’s Real-Time PCR/Other Applied Genomics product line contributed $111.8 million - 29 percent of total revenues - up 19 percent over the $94.3 million in revenues for the same quarter in 2003. Mass spectrometry products contributed $89.1 million, or 23 percent of revenues, up 8 percent over $82.4 million for the same quarter in 2003.

ABI issued its first-quarter results as it works through the third stage of an operational review that is targeted for completion at the end of the calendar year (see BioCommerce Week, 9/9/2004). Thus far, the review, which was conducted in conjunction with the Boston-based Bain & Company consultancy, has resulted in a restructuring of the company’s organizational structure, as well as the introduction of lean manufacturing processes and Six Sigma quality initiatives, with the first class of ABI Six Sigma black belts recently graduating.

“Revenue growth and earnings growth have been challenging for the group over the last several years,” said Cathy Burzik, who took over as president of ABI when Mike Hunkapiller, a co-developer of the gene-sequencing technology, unexpectedly resigned in August.

Burzik said the reorganization of ABI to create separate divisions for molecular biology, proteomics and small molecules, applied markets, and services will help the company identify and pursue growth opportunities.

Clearly one of the areas that is growing is mass spectrometry (see chart, below).

Mass spectrometry, which has averaged $90 million in sales for a total of $1.1 billion in revenues over the past 12 quarters, is rising. while DNA sequencing, which has averaged $148 million a quarter and produced some $1.8 billion in total sales over the past 12 quarters, however, is falling.

The trend lines for sales for the two product lines point to an inflection point a year and a half from now where mass spectrometry will overtake DNA sequencing revenues.

Some of the changes the company has undergone are to “enhance opportunities for its mass spectrometry business,” Tony White, the chairman of parent company Applera, told analysts in Tuesday’s conference call.

Last week, ABI completed a transaction with longtime mass spectrometry development partner MDS of Toronto to expand their joint venture. MDS paid ABI $40 million for a 50-percent interest in intellectual property related to current Applied Biosystems MALDI time-of-flight mass spectrometry systems and next-generation products under development, together with a 100-percent interest in certain MALDI-TOF product-related manufacturing and research and development assets. MDS Sciex, a division of MDS, has primary responsibility for research and development and sole responsibility for manufacturing of joint-venture products, while ABI sells and supports them.

Burzik said declining sales in the DNA product line for the quarter were due to a decrease in sales of its high-end 3730xl DNA analyzers. Revenues from the total DNA sequencing product line have dived from $170.4 million for the quarter ending Dec. 31, 2003, after the launch of the 3730 line, to this quarter’s results largely due to delays in government funding in the US, the company has said.

— Mo Krochmal ([email protected])

File Attachments
The Scan

Booster Push

New data shows a decline in SARS-CoV-2 vaccine efficacy over time, which the New York Times says Pfizer is using to argue its case for a booster, even as the lower efficacy remains high.

With Help from Mr. Fluffington, PurrhD

Cats could make good study animals for genetic research, the University of Missouri's Leslie Lyons tells the Atlantic.

Man Charged With Threatening to Harm Fauci, Collins

The Hill reports that Thomas Patrick Connally, Jr., was charged with making threats against federal officials.

Nature Papers Present Approach to Find Natural Products, Method to ID Cancer Driver Mutations, More

In Nature this week: combination of cryogenic electron microscopy with genome mining helps uncover natural products, driver mutations in cancer, and more.