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Microarrays Still Glimmering for Agilent; Group Still Hiring, May Dodge Heft of Layoffs

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While Agilent Technologies announced a first-quarter loss of $370 million and job cuts for 4,000 employees last week due to a severe market downturn for its telecommunication and semiconductor products, the Palo Alto, Calif., company’s microarray business offered some glimmer of hope for the high-tech firm.

Agilent’s life sciences and chemical analysis group (LSCA) which manages the company’s two-year-old ink-jet based glass microarrays, reagents and instrumentation business, reported flat revenues year-over-year with an operating profit of $34 million.

Christina Maehr, an Agilent spokesperson, said that while layoffs have not been implemented yet, LSCA’s profitability means the unit may not be hit hard by pink slips.

“Agilent treats each division as an independent unit: If you are profitable and growing, we would suspect most of the cuts will come in some other area, such as telecoms or semiconductors,” Maehr told BioArray News.

The company currently has at least two microarray job openings posted on the Monster.com job board — one for a scientist who would work with microarray probe design, production and use, and the other for an applications scientist to market new hybridization technologies and novel applications for DNA microarrays.

The LSCA division reported revenues of $276 million, flat compared to a year ago and down 7 percent from the previous quarter. The group had an operating profit of $34 million, which was flat compared to the year-ago quarter and down $9 million compared to the previous quarter, despite a $22 million decline in revenues over the previous quarter.

“We have had three quarters of 7 percent consecutive growth and one that is flat,” said Maehr. She said the revenues reflected a two-week shutdown for the holidays and did not reflect orders that were entered through new communications technology being introduced to streamline corporate recordkeeping, manufacturing, and processing.

The company said the intended layoffs will be made in an effort to reach break-even by its fourth quarter, based on costs of $1.45 billion.

60-Mer Oligos Lead Sales

While the company doesn’t release specific revenue figures for its microarray product line, Maehr said the products are selling.

“We think we are gaining some market share,” she said. Based on Agilent’s assumption that market giant Affymetrix, with reported revenues of $70 million for its fourth quarter of 2002, has 30 percent of the overall market for microarrays and other technology, Agilent estimates its share at 15 percent of the market — and growing.

The big seller, Maehr said, has been the company’s 60-mer oligo arrays, which were introduced on the last day of FY 2002. “All of our customers bought some of the new oligos,” Maehr said. “They are flying off the shelves.”

Overall, sales of microarrays grew 30 percent over the quarter, and were up 70 percent over the last year’s first quarter, she said. The company had strong sales in Asia, selling primarily to government and academics, Maehr said.

The company plans to release new microarray products this year that will address new organisms and introduce products targeting the agriculture-biotechnology sector, Maehr said.

— MOK

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