Agilent and Amersham Biosciences, as well as Affymetrix, are the Big A’s of microarrays.
That said, both Agilent and Amersham admit they follow a good distance behind Affy in terms of microarray market share. Last week, at the UBS Warburg Global Life Sciences conference in New York City, both companies spoke of the growing microarray market and how they will take their respective share of it. Each company had one hour to make a detailed presentation of its strategy, taking a half hour of podium time in an open setting, followed by another half hour of questions and answers with analysts and the media.
Agilent Takes Aim
For Agilent, there was an elephant in the drawing room — unseen and almost unmentioned — when Taia Ergueta, senior director of business development for the company’s life sciences and chemical analysis division, spoke during her initial presentation.
She went almost the entire session without mentioning Affymetrix. But, no doubt, Affymetrix was the target of Agilent’s market ambitions.
“Our revenues are larger than the other companies that are covered closely in this space,” said Ergueta. Affymetrix is followed by 13 brokerage houses.
“In the life sciences, first-mover advantage will fail against a competitor who does a better job of integrating into a solution that does a better job for customers,” said Ergueta, flashing slides of a side-by-side comparison of Agilent’s ink-jet technology for creating microarrays versus photolithography (Affymetrix’s innovation in microarray manufacturing).
To no one’s surprise, but clearly not conforming to any standard of objectivity, Agilent’s technology prevailed on Ergueta’s PowerPoints. So did its marketing strategy.
“We anticipate that this will be a big business for us,” said Ergueta.
The company is growing its microarray business at a rate of 70 to 125 percent a year, with an installed base of 100, and expects its share of revenues to be “significantly bigger” than $50 million in five years, she said.
The company anticipates that it will be able to grab this bigger slice of the microarray pie as the market’s tastes evolve. “At first, researchers didn’t know what they wanted and catalogues appealed to them,” said Ergueta. “Now, they are more sophisticated and want custom arrays.”
To elbow aside Affymetrix from its entrenched position in genomics labs, Agilent is taking a component strategy, “an open platform that can be put in piece by piece,” Ergueta said, and surrounding it with service. “We put more effort into the productization and integration of a solution.”
Agilent produces the scanners that Affymetrix sells in its GeneChip-brand system, creating a type of arm’s length relationship between the two firms. Affymetrix services its rival’s equipment and promises to continue servicing it but indicated that it might, at some point, offer a trade-out option for the labs that are using Agilent scanners. The current agreement for scanner sales expires in February 2003.
Agilent, meantime, is pushing its new scanner, one that Ergueta said is twice as fast as the old one, without offering any comparative benchmarks.
Looking forward, Agilent is creating a product that will allow gene expression experiments without PCR amplification, she said. Still in research and development, the tool will be designed to allow direct labeling of samples, according to the company.
Amersham Preps Sales Team for CodeLink Arrays
Amersham, meanwhile, told the pinstripes that its recent $20 million acquisition of Motorola’s CodeLink array business was a valuable addition to its portfolio.
“We don’t expect to become the market leader, but we expect to capture significant market share,” said Giles Kirk, group finance director of Amersham, in his presentation.
“It’s a tightly-woven area and Affymetrix, the market leader, has a strong hand in intellectual property,” he said.
But for Amersham, Kirk said, “The important investment is in the ongoing people.”
The company has headquartered CodeLink in Tempe, Ariz., and retained 80 of more than 200 employees. Motorola did not include its Illinois facility in the sale and opted to shut down the factory in Northbrook.
With the CodeLink purchase, Kirk said Amersham bought “a high-quality research and development business and an opportunistic way to get into the prearrayed slide business.”
The company is in the process of introducing CodeLink into its sales network with the goal of capturing 10 percent of the gene chip market that Kirk said measures $200 million and is growing at a rate of 20 percent a year. He said his estimates were shaded to the conservative side — compared to others who measure the market for microarrays at $500 million.
Amersham lists CodeLink as well as its Scierra laboratory workflow software, and its microchannel chip platform as products “in development.”
The company plans to add the CodeLink array to the scanners and spotters that it already sells under the umbrella of its Discovery Systems group, which earns 75 percent of its revenues from reagents and consumables, selling heavily into the academic market.
To break even on its purchase of CodeLink, the company will have to make $20 million a year, Kirk said.
The competition begins with gene-expression analysis, Kirk said.