This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
SAN FRANCISCO — The mass spectrometry and liquid chromatography markets took center stage in the presentations by executives of Agilent, Waters, and Thermo Fisher Scientific last week at the 25th annual JP Morgan Healthcare Conference.
While Waters’ business is built almost entirely upon serving these two markets, Agilent and Thermo, despite their broad life sciences portfolios, also chose to focus a good portion of their talks on their growing businesses in these areas. The competition between the three in the MS and LC spaces has intensified over the past couple of years as they’ve each introduced new products, and it could get even hotter if Thermo continues to pursue acquisitions to bolster its LC play.
Waters Chairman, President, and CEO Doug Berthiaume told investors that the firm had seen a “dramatic improvement” in second-half 2006 sales of its mass spec products, which he said was driven by new product introductions. He said that among those introductions, the Synapt High Definition Mass Spectrometry instrument was the most important because it offered the market a new ion separation ability.
Waters introduced the Synapt at the American Society for Mass Spectrometry meeting in late May (see BioCommerce Week 6/7/2006). The instrument includes the company's Triwave technology, which features an ion trap; ion mobility-based separation within an electric field that separates ions based on their shape and size; and mass quadrupole time-of-flight mass spectrometry that performs traditional mass and charge analysis.
The firm is targeting the structural biology market with the instrument, which sells for around $650,000.
Berthiaume said during Waters’ breakout session that the firm intends to develop and launch several new mass spec instruments in the next three years, and one of these instruments would be a lower-end, benchtop Synapt. He also said the firm is increasing its investment in software R&D.
Berthiaume noted that clinical testing, and in particular neonatal testing, has become a fast-growing part of Waters’ mass spec business. The firm already has an alliance with PerkinElmer in the neonatal diagnostics field, and Berthiaume believes its mass spec technology could be applied to other diagnostic efforts.
He also noted that the firm has ongoing efforts to get customers to switch from its Alliance HPLC system to its Acquity UPLC instrument, which had a nearly two-year jump start on competing instruments from Agilent and Thermo.
Agilent has been pushing deeper into the mass spec market following a five-year, $1.4-billion makeover that transformed the firm into a pure-play measurement company from one mostly known for its semiconductor business. Foremost in its growth strategy for its life sciences business is a greater emphasis on its multi-sector liquid chromatography/mass spectrometry instruments.
The company is now embarking on a four-point growth initiative that includes greater focus on its microarray business, its diagnostics platforms, and its informatics technology. But, most of all, Agilent will be moving to capture greater market share of instruments used for proteomics research, according to Nick Roelofs, Agilent’s general manager of life sciences, who made the firm’s pitch to investors along with Agilent CFO Adrian Dillon.
According to Roelofs, the LC/MS market is worth around $1.4 billion with an annual growth rate of 7 percent to 9 percent. Agilent currently has an 8 percent share of that market, he said.
Most of Agilent’s business so far has been in single-sector instrumentation. “But our big growth going forward will be from multi-sector instruments,” said Roelofs. “So we’re now preparing to play in a much deeper element of the proteomic and metabolomic market with the ability to analyze proteins, do differential expression, and go far beyond the [identification of proteins],” he said.
In 2006, Agilent launched the triple-quadrupole LC/MS and the 6510 quadrupole time-of-flight LC/MS, both of which are expected to help the company fulfill those goals.
“Our big growth going forward will be from multi-sector instruments.”
Agilent’s strides in the mass spec market have not gone unnoticed by the competition. Marijn Dekkers, CEO of Thermo Fisher, said that the most significant change in the mass spec competitive landscape was that “Agilent has become more aggressive.” He said that although Agilent’s products are not revolutionary, and are of the me-too variety, the firm’s market reach and customer relationships have “changed the competitive dynamic.”
Dillon noted during the firm’s breakout session that the company’s microarray and mass spec businesses are now profitable, making good on a promise to investors.
In addition, he noted that all businesses within Agilent must provide a 20 percent return on invested capital over a cycle, though he did not specify how long that cycle lasts. Dillon also said that this is also a key consideration when evaluating potential acquisition candidates.
Despite Agilent’s efforts in the mass spec field, Dekkers said he believes Thermo Fisher continues to take market share from competitors, including Waters, Applied Biosystems/MDS, and Bruker Biosciences. He said the firm’s Orbitrap instrument, in particular, has performed well in the high end of the mass spec market.
Dekkers also said that the combined operations of Thermo and Fisher provide the broadest offering on the market for conducting biomarker research. He said that, unlike some of the firm’s competitors, Thermo Fisher’s academic customer base has remained strong because the NIH has continued to fund biomarker research programs.
Meanwhile, plans for expanding in the liquid chromatography market are definitely on Thermo’s mind. Dekkers hopes that Thermo’s Accela HPLC platform, which was introduced in 2006, will help the firm gain some market share, though he acknowledged that Waters and Agilent are the clear-cut leaders in this market.
“I would like to be stronger in chromatography,” he said at the conference. “We’re not a market leader, and that’s not easily solved.”
The firm acquired LC sample-prep company Cohesive Technologies last month (see BioCommerce Week 12/20/2006), and this week announced that it had acquired SwissAnalytic Group, a Basel-based firm that operates two companies offering mass spec and liquid chromatography products (see briefs).
Dekkers said that the company’s priority for use of cash is still acquisitions, which could mean Thermo Fisher will make a bigger splash in the LC market this year through a purchase rather than through internal development efforts.