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The GT Interview Bio-Rad Relishes Its Feel-Good Factor,50 Years On

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By Adrienne J. Burke

With the kind of attention Bio-Rad has been getting lately — its founder named entrepreneur of the year in Silicon Valley, and a listing among Business Week’s 100 “Hot Growth Companies” — you’d never guess that it’s been around for 50 years. Established in 1952 by David Schwartz with his biochemist wife Alice Schwartz in a Richmond, Calif., airplane hangar, Bio-Rad is now a billion-dollar manufacturer and supplier of life science instruments, consumables, diagnostic kits, and educational materials with 30 offices, 4,700 employees, and a name that is ubiquitous in biotech laboratories worldwide.

When Schwartz handed the reigns over to son Norman last December, management of Bio-Rad’s life sciences division was assumed by Brad Crutchfield, vice president, who started working for the company straight out of college 18 years ago.

Crutchfield explains the company’s low profile and recent glory this way: “Most of our focus for the last 50 years has been on our customers. We’ve been a public company since [about] 1968, but financial analysts never really figured out how to deal with Bio-Rad because we’re half diagnostic and half life science.”

But Crutchfield says the profile was raised in 1999 when Bio-Rad acquired Pasteur Sanofi Diagnostics. “We don’t dilute our equity, so to finance this we had to open up and go out and tell our story. Along the way people started to get interested in a company that had been around for a long time with a relatively solid track record of growth. By the time you hit the end of 2001, consistency, a long-term record of growth, and stability really were terms that started to resonate.”

Attention from Wall Street was ratcheted up another notch when, Crutchfield says, “for the first time in our history we got involved in a market that people were very specifically interested in.” In late 2001, demand for Bio-Rad’s BSE diagnostic kit took off when mad cow disease surfaced in Germany. “We went from a plan to have 200,000 tests in the year to try to get 2 million tests in customers’ hands and get two or three hundred laboratories up and running in a couple of months,” Crutchfield says. “We actually executed on this opportunity and that’s the story I’m proud of.”

Genome Technology met with Crutchfield in July on Bio-Rad’s sprawling Hercules, Calif., campus, where a new manufacturing and R&D facility is being constructed and other offices are under renovation, to talk about Bio-Rad’s next trick and the direction he’ll take the life sciences half of the company.

 

Genome Technology: What’s new at Bio-Rad?

Crutchfield: We just signed a relationship with Caliper to take this microfluidics platform, which really hasn’t realized its full potential, [to market]. It’s one of our core competencies — taking a technology that has a lot of potential and bringing it to the masses. Commercialize it in a way that a lot of researchers can use, bring it in at price points, a level of simplicity that brings a lot of value and not something that only a select few can afford.

We’ve been working with Caliper for almost five years on this. Because of the relationship with Agilent we weren’t really permitted to do anything, but now that that’s changed we feel that there’s an opportunity to bring it into a format where just about everybody could use it to speed up and add value to what most people need to do in the laboratory and that is to evaluate a sample to determine complexity: Do I have three proteins in there or do I have two? Did my experiment work or did it fail? The simple kinds of things like that, those are the things that really speed things up.

 

When do you foresee having a product from that collaboration, and where will it fit in to your business?

Next year. The businesses will probably evolve a little bit but it will fit into our protein separations team.

 

Which are the most promising new technologies you’re working on?

A company the size of Bio-Rad approaching a half-billion dollars in the life science group looks at advancement on multiple levels. One is just existing product lines — we have the obligation to ourselves, to our customers, to continue to push the existing product lines we have and upgrade those looking for advantages that we can bring. Real-time amplification is an important business there for us.

[Another promising technology] is certainly the strategy to integrate microarrays into practical applications.

Also, protein separation — it’s very complex, it’s a big business for us, there’s lot of little tools that fit in there, but every one of those things are absolutely centered around making the lives of our customers easier. Making things work faster, getting data that’s cleaner, and that varies all the way from protein standards that are recombinant to genetically engineered protein standards. That way we can absolutely know and guarantee that every time they use a protein standard from Bio-Rad it’s clean, crisp bands that are exactly the same every time.

[Also] WorkBase is our bioinformatics model that makes this proteomics experiment that much easier for our customers to do by standardizing the whole process and allowing them, much like [with] a LIMS, to keep track of all the data generated through the multiple steps of a proteomics experiment.

 

What’s your most high-growth business?

This area of protein function excites me. It’s kind of like you’re getting to the end of the story here. It’s like we’re getting to the back of the book and we’re going to find out who did it. Not to belittle the tremendous achievement of sequencing genomes, but when all is said and done the real benefit is going to be when we understand how the whole story plays out. And it’s going to come down to understanding how these proteins interact and how phosphorylation and glycosylation and these other things play out because that’s really the currency of action in the cell.

 

How did Bio-Rad continue to grow significantly while so many others in the industry were having cutbacks and layoffs?

We are certainly growing and we’re building. It’s been an interesting time for us. To some degree I would explain it this way: a defocused product portfolio helps a little bit. It’s good and bad. There’s a balance for us. We haven’t relied that specifically on a single product line. We have a balanced portfolio between consumable and reagents and instrumentation.

The other thing that’s helped us over the years is we try to take a measured response to our opportunities in the market so we don’t get to a position where we have to do layoffs.

When you’re a family company … layoffs are something that’s a personal thing and we just don’t like to do that. Our goal is not to be in a position where we’re adding too many people or throwing too much money at R&D. We have a customer base that we feel responsible for. We don’t want to be in a position where we’re here one day and not the next.

Some other family companies try to play down the family aspect of their businesses. What about Bio-Rad?

Dave has been in this business for 50 years. His wife, as he always says, is the brains of the operation; she’s on the board of directors. She was the original scientist of the company. You can’t really run from the family nature of it. We have the advantage that the equity is maintained within the family, so there’s really no way anybody can buy Bio-Rad. We’re immune to that kind of thing. But we still have an obligation to our shareholders. There’s still very much a culture in Bio-Rad to financial goals and targets and budgets.

The one thing that’s different from other family companies is that Norman and his father are not [overbearing] leaders. They don’t micromanage people. Bio-Rad is a company about individuals. If you look at other companies that have been primarily family companies there’s usually a strong figure that’s run it. That’s not how we operate.

Bio Ed is a good example of how Bio-Rad operates. There are a million high school students who have learned biotechnology with a Bio-Rad kit. It’s less than a $10 million business, but a lot of our researchers love to work with it, to go out in the community and help train teachers.

We think it’s a great opportunity to ultimately train consumers, potentially train future customers, future employees. It’s just a fascinating program to watch these kids go through these experiments. There’s a real feel-good factor there.

 

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