NEW YORK, Dec. 9 (GenomeWeb News) - Invitrogen executives today predicted double-digit growth in revenues and profits for the 2004 fiscal year, accompanied by an increase in R&D spending, and a continuation of the company's aggressive acquisition strategy.
At its annual guidance conference, held at New York's W Hotel, CEO Gregory Lucier outlined Invitrogen's outlook for becoming the "premier biotechnology company in tools and technology" - a plan that comprises revitalizing the organic growth of the company's current product line, enhancing the effectiveness of its sales process, improving its operational efficiency, and pursuing new acquisitions in high-growth technology areas.
Invitrogen has become "adept at integrating acquisitions" over the last year, Lucier said, and the company views acquisitions as "an important part of its strategy for 2004." Lucier declined to provide details on the company's acquisition pipeline, but noted that Invitrogen sees the most growth potential in areas downstream of genomics, which currently comprises around one-third of its total business, but is "flat" in terms of growth. New technology areas of interest include functional genomics, proteomics, cell biology, assay development, and drug development, he said.
The company has over $1 billion cash on hand for acquisitions and other investments, Lucier noted.
In addition, Invitrogen's current business segments - Molecular Biology and Cell Culture - have been renamed Biodiscovery and Bioproduction, respectively, to reflect a more "expansive view" of the drug discovery and development pipeline, Lucier said. In line with this more holistic approach to life science research, Invitrogen is currently retraining its sales staff towards "solution selling" rather than one-off product sales, he said, with the goal of increasing the average purchase order from $400 to $5,000 by offering bundled, "product systems" for targeted research areas.
The net effect of the anticipated sales boost is a projected revenue increase of 16 percent year-over-year, to $890 million in 2004. Net income is projected to be $749 million for 2004 - a 26 percent increase over 2003.
The Biodiscovery segment is projected to bring in revenues of $580 million for 2004, a 6 percent increase over 2003; while the revenue forecast for Bioproduction is $310 million for 2004, an 11 percent increase over 2003.
Invitrogen plans to ramp up R&D over the course of 2004, with R&D spending expected to increase to $77 million, or 10 percent of sales, compared to $54 million, or 7 percent of sales in 2003.
The company also plans to reopen its Frederick, Md., R&D facility, which it closed following the acquisition of Life Technologies in 2000.