Bringing the company closer
to its goal of building a “screening and diagnostics capability in maternal health,” PerkinElmer announced last week that it had acquired NTD Laboratories and J.N. Macri Technologies for around $56.65 million.
The acquisitions add to PerkinElmer’s broad portfolio of maternal, pre- and neonatal, and genetic screening technologies, and the NTD acquisition in particular marks the firm’s entry into the lab testing arena. PerkinElmer officials, however, stressed that they have no plans to expand further into lab testing and view the acquisition as a “supplemental capability.”
PerkinElmer last week also reported that its revenue rose 2.5 percent for the second quarter, while its profits fell due primarily to a tax benefit in the comparable quarter a year ago.
J.N. Macri Technologies holds global patents related to free beta Human Chorionic Gonadotropin, a peptide hormone produced in the early stage of pregnancy that is “widely recognized as a critical biomarker for first-trimester prenatal risk assessment,” according to a PerkinElmer statement.
NTD Laboratories, on the other hand, developed UltraScreen, a screening test that when used with ultrasound and maternal demographic data provides clinicians with a patient-specific risk probability for fetal abnormalities. The reference lab brought in revenue of $15 million for its fiscal year ended June 30.
“The principal benefit of us being in the lab test business is that it’s an additional outlet for us to bring new tests to market, and it’s an additional distribution channel in areas where we don’t think the market is being well served,” said Greg Summe, chairman and CEO of PerkinElmer, during a conference call. “But it’s not a shift to sort of being a full line into the testing business, it’s more of a supporting or supplemental capability to our maternal health and natal health screening business.”
With the acquisitions, PerkinElmer can develop further screening and diagnostics capabilities in maternal health, expanding its franchise of related pre- and neonatal and genetic screening technologies. The acquisitions build on its recent licensing of global rights to the ADAM12 biochemical marker for fetal chromosomal abnormalities and PP13, a prospective biomarker for identifying patients at risk for pre-eclampsia in the first trimester.
Deals Inked in China and Texas
PerkinElmer also said last week that it will help expand neonatal screening in China. Under the terms of the five-year agreement, PerkinElmer will donate VICTOR multilabel plate readers for genetic testing, and the Ministry of Health of the People's Republic of China will purchase the assay kits that will be used on the system.
“The principal benefit of us being in the lab test business is that it’s an additional outlet for us to bring new tests to market, and it’s an additional distribution channel in areas where we don’t think the market is being well served.”
The screening program will target seven of China's least economically developed provinces, including Hubei, Heilongjiang, Liaoning, Guangxi, Shanxi, Qinghai, and Guizhou.
This is the second neonatal screening program for PerkinElmer in China. In 1996 PerkinElmer donated five neonatal screening systems and ran a neonatal educational program in the country.
In addition to screening, the enhanced program will provide health education to physicians and lab staff at local screening centers.
The firm said separately that it will supply the Texas Department of State Health Services Laboratory with tandem mass spectrometry systems, reagent kits, and software to enhance the state’s newborn screening program.
The firm has similar agreements with the states of Alabama, California, Florida, Kentucky, Louisiana, Missouri, Pennsylvania, and South Carolina.
Q2 Revenue Rises Slightly
PerkinElmer also announced last week that its second-quarter revenue rose 2.5 percent to $377 million from $368 million in the comparable quarter last year.
Revenue from the Life and Analytical Sciences segment increased 3 percent to $278.5 million from $270.8 million year over year. The genetic screening and service businesses contributed to the increase, the company said in a statement.
Revenue for its Optoelectronics segment remained essentially flat, at $98.5 million compared to $97 million from the same period last year.
The firm’s R&D costs increased 13 percent to $25 million from $22 million in the comparable quarter a year ago.
PerkinElmer also reported that its net income fell 15.2 percent to $24.5 million, or $.19 per share, for the second quarter from $28.9 million, or $.22 per share, in the comparable quarter last year. The quarter included intangibles amortization of $7.8 million and stock option expense of $2.1 million. The second quarter of 2005 included a tax benefit of $16.3 million.
The firm predicted third quarter earnings per share of between $.22 and $.24, and full-year 2006 EPS of between $.95 and $1.00.
“We don’t see a significant change in the momentum in the marketplace,” said Summe during the conference call. “The pharmaceutical companies have been relatively stable in their spending. The biotechnology companies have been growing faster, and … the funding market for the academic side has been relatively flat,” he said.
Rob Friel, president of the Life and Analytical Sciences business, added, “We’re not expecting an increase in spending [by pharmaceutical companies] in the back half” of the year.
He said that the firm expects higher growth from new products slated for launch later in the year. “We expect those products to hit in some of the faster growth areas within biopharma,” said Friel. “We don’t expect the spending to be up significantly, but we do believe there are specific areas within either pharmaceuticals or biotech where they are spending more, and that’s really where we’re targeting our new products now.”
PerkinElmer finished the second quarter with $324 million in cash and cash equivalents.