Skip to main content
Premium Trial:

Request an Annual Quote

Waters Cites Europe, Pharma Slowdown For Q1 3 Percent Organic Revenue Growth

With a revenue increase of 5 percent on sales of $268.3 million for the quarter ending March 31 — boosted 2 percent by currency-exchange benefits — mass spec instrument maker Waters this week confirmed the sales slowdown in Europe it had warned about in early April.

On Tuesday, the company said declining sales in Europe in the quarter were not specific to major accounts or to any single product line but were widespread, Doug Berthiaume, Waters chairman, CEO, and president said, adding that the company expects to finish the year with a "modest amount" of sales growth in Europe.

Additionally, Waters reported a 4 percent decrease on R&D spending of $16.7 million, year over year, as net income increased 14 percent to $46.5 million. The company had cash and cash equivalents of $586 million on hand as of April 2.

Earlier this month, Waters cut its Q1 revenue-growth projections to between 3 percent and 4 percent, from its previous projection of 13-percent year-over-year growth, triggering analyst downgrades, and a slide in shares among all the mass-spec based tools companies tracked in the BioCommerce Week Index. Waters lost some 21 percent in market capitalization, some $1.2 billion, after lowering its projections (see BCW 4/7/2005). Shares in Waters moved up 11 percent for the five-day period ending Tuesday (see BCW Index)

Berthiaume said that if pharma companies did not increase spending on capital equipment, then Waters could expect to finish the year with the same 3-percent rate of revenue growth that it recorded in the first quarter, alleviated only by the possibility of seasonal second-half improvements typically seen in molecular-biology instrument sales.

While the company does not disclose specific revenue numbers for certain product line sales, Berthiaume said that on sales of more than $15 million of its Acquity UPLC separation systems in the period, some 70 percent were bought by pharma.

"There is no question that people at the bench in pharma are crying for new systems and capabilities," Berthiaume said. "They think they are getting held back from getting projects done and they think they are making strong cases for the equipment needed. But the capital requests are dwelling longer in capital committees, or in getting a vice-presidential sign-off. I can't say we haven't seen this before, it is just the strongest change we have seen: We went from a quarter with looser dynamics to a new year where things just seemed to screw down and get tighter as we went along."

"[Pharma] contracts on all fronts, just looking at purchase orders and cutting spending," he said. "We don't think that is a long-term sustainable dynamic," Berthiaume said.

— Mo Krochmal ([email protected])

 

The Scan

Study Tracks Responses in Patients Pursuing Polygenic Risk Score Profiling

Using interviews, researchers in the European Journal of Human Genetics qualitatively assess individuals' motivations for, and experiences with, direct-to-consumer polygenic risk score testing.

EHR Quality Improvement Study Detects Demographic-Related Deficiencies in Cancer Family History Data

In a retrospective analysis in JAMA Network Open, researchers find that sex, ethnicity, language, and other features coincide with the quality of cancer family history information in a patient's record.

Inflammatory Bowel Disease Linked to Gut Microbiome Community Structure Gradient in Meta-Analysis

Bringing together data from prior studies, researchers in Genome Biology track down microbial taxa and a population structure gradient with ties to ulcerative colitis or Crohn's disease.

Ancient Greek Army Ancestry Highlights Mercenary Role in Historical Migrations

By profiling genomic patterns in 5th century samples from in and around Himera, researchers saw diverse ancestry in Greek army representatives in the region, as they report in PNAS.