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Bio-Rad Q3 Revenues Increase 15 Percent; Firm Acquires dPCR Maker Dropworks

NEW YORK – Bio-Rad Laboratories said after the close of the market Thursday that its third quarter revenues increased 15 percent year over year. The firm also announced that after the close of the quarter it acquired digital PCR maker Dropworks for $125 million in cash.

For the three months ended Sept. 30, Bio-Rad reported revenues of $747.0 million compared to $647.3 million a year ago. On a currency-neutral basis, quarterly revenues increased about 14 percent.

Life Science segment revenues increased 15 percent to $373.5 million in the third quarter, driven primarily by sales of Droplet Digital PCR products, process media products, and back royalties from a legal settlement.

On a call with investors, Bio-Rad CFO Ilan Daskal said that the firm's COVID-19-related sales were about $57 million in the quarter. Excluding COVID-related sales, Bio-Rad's core qPCR business also experienced growth driven by "strong uptake" of its newer generation CFX Opus platform, Daskal said.

In addition, "We have seen strong growth in the biopharma market for our Droplet Digital PCR platform," he said, adding, "We also continue to see steady adoption of ddPCR in wastewater solutions, supported by government funding towards public health labs."

Daskal announced that Bio-Rad recently acquired digital PCR instrument maker Dropworks, a startup that Bio-Rad sued in 2020 for intellectual property infringement.

"Dropworks is developing a droplet-based digital PCR system that could provide a more cost-effective solution to streamline the digital PCR workflow for life science research and diagnostic applications," Daskal said. "We see Dropworks as accelerating Bio-Rad's entry into the lower-end segment of the digital PCR business and allowing for expansion in the $2.5 billion to $3 billion qPCR segment, thereby significantly increasing the opportunity for our ddPCR platforms," he also said.

Clinical Diagnostics segment revenues increased 16 percent to $372.2 million year over year primarily due to increased demand for all product lines across all regions which the firm attributed to higher utilization of lab operations as businesses recover from the COVID-19 pandemic.

During the quarter, demand continued for products associated with COVID-19 testing and research, though at a more moderate level, Bio-Rad CEO Norman Schwartz said in a statement.

Also on the call, Andrew Last, Bio-Rad's chief operating officer, commented that supply chain constraints have persisted, "in particular for supply and costs of plastic raw materials, electronic components, and higher logistics costs." To date, Bio-Rad has been able to balance supply and demand through careful management, Last said, but he noted that the firm sees these supply constraint trends "continuing through year-end and into 2022 and thus increasing the challenge of adequately meeting customer demand."

Net income in Q3 was $3.93 billion, or $129.96 per share, compared to a net income of $1.31 billion, or $43.64 per share, a year ago. Net income for the third quarters of 2021 and 2020 were impacted by the recognition of changes in the fair market value of equity securities primarily related to Bio-Rad's holdings in Sartorius.

On an adjusted basis, net income in Q3 was $3.71 per share.

Bio-Rad's Q3 R&D spending rose 8 percent to $64.5 million from $59.5 million a year ago, while its SG&A expenses rose 9 percent to $216.5 million from $198.2 million.

Bio-Rad exited the quarter with $859.9 million in cash and cash equivalents and $482.8 million in short-term investments.

Bio-Rad raised its annual guidance from prior expectations of 10 to 10.5 percent growth. It now anticipates full-year currency-neutral revenue growth of between 12 and 13 percent.

In Friday morning trading on the Nasdaq shares of Bio-Rad were up less than 1 percent to $791.94.

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