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Millipore Expects to Launch New Workflow Products This Year; Q4 Revs Rise 50 Percent

This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
 
Millipore’s acquisition of Serologicals last year significantly strengthened the company’s Bioscience division and is expected to result in several new products rolling out later this year, said Chairman, President and CEO Martin Madaus last week.
 
Millipore is on track to complete the Serologicals integration by the end of the second quarter and the acquisition has provided the company with an opportunity to create new integrated tools combining instruments and reagents, said Madaus. In addition, the Millipore chief said the firm has made “significant headway” in getting its business back on track following disruptions at a facility last year.
 
Madaus made the comments during a conference call to discuss the firm’s fourth-quarter results and provide guidance for 2007. Millipore reported a 50 percent increase in fourth-quarter revenue and a sharp spike in profits.
 
Millipore acquired Serologicals last year for $1.4 billion in cash in a move expected to greatly expand the offerings of its Bioscience division and help the firm’s Bioprocess division gain a piece of the upstream market (see BioCommerce Week 4/26/2006).
 
The Bioscience division, in particular, gained a broad portfolio of tools for protein and DNA research, analytical sample preparation, and bioassay development, as well as a larger presence in the drug-discovery products and services, antibodies, cell biology reagents, and stem cell research markets.
 
“Our Bioscience division has now better capabilities and product breadth to accelerate growth from historical levels,” said Madaus during the conference call last week. “We really now have two strong legs to stand on, creating a good balance between the more long-term business profile — the Bioprocess division — and the shorter sales and product-development cycles that are more typical for our Bioscience division.”
 
He said that the Serologicals acquisition has presented the company with an opportunity to combine its biotools and research reagents into new products. “We are currently working on new workflow-based solutions that combine products from both Serologicals and Millipore,” said Madaus. “Many of these products will be available in the second half of this year.” He did not provide any further details.
 
Madaus also said during the call that Millipore is “putting the problems in Temecula behind us, and we expect this business to generate higher performance throughout 2007.” He was referring to Millipore’s facility in Temecula, Calif., which experienced problems consolidating some of Serologicals’ operations.
 
Millipore officials revealed during the firm’s third-quarter conference call in November 2006 that these problems had caused “near-term disruptions” in shipping products to customers during the quarter (see BioCommerce Week 11/8/2006). Madaus said at the time that the firm was fixing the problems, which were primarily related to inaccurate product and customer data files that caused delays in releasing products.
 
“There are problems with this consolidation that became only apparent during the summer,” he said during the Q3 call. “As a result, some product development commercial activities in Temecula were adversely affected in Q3. These are problems that can be fixed but are causing near-term disruptions. Improvement initiatives are being implemented right now, and we're already seeing better performance in Q4.”
 
Indeed, Madaus said last week that the firm had made “significant headway at getting this business back on track.” He said that backorders had decreased during the fourth quarter and new product launches more than doubled.
 
In addition, Madaus said that efforts to increase sales for its kinase profiling business were working, and “we’re winning business for our products and services.” Among those efforts was the formation of focused account teams to target customers and “regain momentum.”
 

Millipore is “putting the problems in Temecula behind us, and we expect this business to generate higher performance throughout 2007.”

“We believe the biggest challenges in drug discovery are behind us, and we expect the growth of this business unit to accelerate this year,” said Madaus. “Outside of kinase profiling, we are seeing great success for our multiplex product offerings.”
 
Q4 Revenues Rise 50 Percent
 
Millipore last week said its fourth-quarter revenues increased approximately 50 percent to $383 million from $256 million year over year.
 
Compared with the fourth quarter of 2005, sales in the company’s Bioprocess division were up 42 percent to $224 million, while the Bioscience division gained 61 percent with sales of $158 million.
 
The products Millipore acquired from Serologicals grew 8 percent to $93.4 million in revenue in the quarter, according to Madaus.
 
Millipore said its net income increased to $18.5 million, or $.34 per share, from $1 million, or $.02 per share, in the year-ago period.
 
The firm’s fourth-quarter R&D spending increased to $23.9 million from $17 million year over year.
 
For full-year 2006, Millipore reported revenue of $1.26 billion, a 27 percent increase over revenue of $991 million in 2005. The firm’s 2006 profit rose 21 percent to $97 million, or $1.79 per share, from $80.2 million, or $1.55 per share.
 
Madaus said that excluding Serologicals’ contribution, the firm’s 2006 revenue growth was 11 percent and was within the firm’s guidance of between 10 percent and 12 percent. In just under two quarters of sales since the acquisition, Serologicals has contributed $156 million in revenue to Millipore’s total receipts.
 
Millipore had around $77.5 million in cash and cash equivalents as of Dec. 31, 2006.
 
Company officials said they expect to report 2007 revenue growth of between 22 percent and 24 percent, of which between 8 percent and 10 percent will be organic. They also said earnings per share for fiscal 2007 would be between $3.60 and $3.75.