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Does New President, COO at Guava Signify Move Away from Dx and Back to Discovery Tools?


Guava Technologies last week announced that its board of directors has elected Lawrence Bruder, the company's former vice president of corporate development and worldwide marketing, as its new president and chief operating officer.

The move comes almost six months after three-year president and CEO Rajen Dalal left Guava Technologies, due to what he said were divergent views on the company's business strategy (see CBA News, 2/8/2005).

Specifically, Dalal and company executives disagreed as to whether Guava should pursue near-term life science applications such as assay development, basic research, and bioproduction for its flagship technology, the PCA benchtop cellular analysis system, or whether it should step into the ring with flow giants Becton Dickinson and Beckman Coulter to pursue longer-term, but potentially more lucrative markets such as T-cell enumeration for diagnosing and monitoring HIV patients.

"They've lost their edge. They had a unique selling position for a long time, and sold a lot of instruments, but now DakoCytomation, Beckman Coulter, and BD all have similar benchtop instruments to address this market."

It is unclear whether Bruder's appointment indicates a move in one direction or another for Guava — repeated calls to the company were not returned in time for this publication — but his background may provide a clue. Guava named Bruder vice president of corporate development and worldwide marketing earlier this year. He joined Guava from Applied Biosystems, where he served as vice president of ABI's functional proteomics division.

Prior to this, he was employed by Becton Dickinson's biosciences unit, where he held positions that included general manager of the immunocytometry systems division, general manager of the industrial microbiology business, and vice president of marketing for the immunocytometry systems division, Guava said. He has also held marketing, sales, and product management positions with microscopy and imaging firms Leica and Olympus.

John Walker, who has served as Guava's interim CEO since Dalal's departure, remains in that position and as chairman of the board for the time being. It is unclear whether Guava is still seeking to permanently fill the CEO position, or will retain Walker.

Walker suggested last week in a statement that Bruder's 20-plus years in life sciences would mesh well with Guava as it "seeks to expand our efforts in serving the needs of the life science community," though it was unclear whether Walker was referring to research tools, diagnostics, or both.

According to one former Guava sales and marketing employee intimately familiar with the PCA product line, but who wished to remain anonymous due to his recent appointment with another biotech firm, Guava may not have completely jettisoned the idea of diagnostics, but "they've certainly deprioritized it." Guava's board would likely have wanted to fill the position with someone more in tune with their strategy, and "it seems from [Bruder's] pedigree and track record that he's a life science kind of guy," the source said.

Dalal left Guava in early February, and at that time he told CBA News that his vision was to expand Guava's presence in the diagnostics market — an area where it had seen early and modest success with the introduction of its EasyCD4 benchtop cellular analysis system for monitoring HIV-positive patients in third-world countries (see CBA News, 5/11/2004).

Dalal also said at the time that much of the rest of the company's desire was to focus on nearer-term markets in life science research and early drug discovery. Even though the privately held firm claimed that it had enjoyed five-fold revenue growth over the prior three years to $10 million, and garnered clients at the top 20 pharma companies, the top 10 biotechs, and the National Institutes of Health, Dalal said that he saw a slowdown in spending in the life science research marketplace.

Dalal may have been onto something, as even BD, BC, and other multi-platform life science tools companies have recently attested. However, there have been recent signs that the market is again picking up steam and, according to some industry insiders, Guava had yet to exhaust all its options.

According to a second former Guava employee, who also wished to remain anonymous due to his recent appointment at a biotech company, "the beauty of the Guava platform is its ease of use, its simplicity, and its small volumes, and that is very applicable, as everyone has always said, to bioproduction, to pilot-scale development, assay development, and basic cell biology outside of flow cytometry labs.

"That is the core of the business," the second ex-employee added. "If you go and fight toe-to-toe with the likes of BD, and other flow companies for the research business — the true multi-color research business — [Guava] will lose."

In fact, he said, Guava's founder directed the company to bioproduction as a starting point, and approximately 30 percent of Guava's early sales were in this area.

The first ex-employee agreed, suggesting that Guava might be better off even further narrowing its focus on bioproduction and downplaying the other life-science research applications.

"My opinion is that the life science marketplace is the correct area for this product, including monitoring of bioproduction," he said. "I really think that is their sweet spot, and they really don't focus on it. Bioproduction is huge. They have an ability to add a lot to that space, they had an early focus there, and they kind of lost it when they went in the direction of the microplate screening."

Fractured company?

Bruder, along with Walker, are now charged with righting a ship that may have gone astray due to its former captain's possibly over-optimistic vision of tackling diagnostics.

According to the second former employee, Dalal may have been the sole voice, or at least one of a very few, who wanted to steer Guava toward the diagnostic marketplace.

"If you actually did the timeline when people left, they started leaving before [Dalal] left," he said. "So it makes sense that people might have left because they didn't agree with him.

"It comes down to over-stretching the organization," he added, referring to Guava's foray into third-world countries with its diagnostic platform. "If you're looking at third-world markets, you're looking at support, infrastructure, and distribution agreements. Now, if you do that with a company that hasn't got a large commercial organization anymore, how do you do it?"

The first ex-employee painted an even more discordant picture, telling CBA News that the company was "completely fractured, in their thinking and everything."

He said that "the reality was that they tried to do both [diagnostics and life-science research tools], and it ended up pulling R&D, and the whole company, in two directions, so everything got done at about 60 percent, instead of doing one thing to 100 percent."

As a result, he added, Guava may have lost its edge in certain markets in which it had near-term revenue potential.

"If you actually did the timeline when people left, they started leaving before [Dalal] left. So it makes sense that people might have left because they didn't agree with [him]."

"I think that they should focus on one market or the other, and I think that the life science market is an easier space for them to win in," he said. "I also think they've lost their edge. They had a unique selling position for a long time, and sold a lot of instruments, but now DakoCytomation, Beckman Coulter, and BD all have similar benchtop instruments to address this market.

"They certainly lost their single-player status, and now they have heavy competition for the same marketplace," he added. "I also think their instrumentation has slipped, and that the other products offer better instrumentation specs. So not only are they not the only player, they are also not at the top of the heap."

The second ex-employee said that he thought the Guava instrument still has the potential to be a money-maker, but the company "stretched itself too thin" trying to chase after "too many markets, too soon," as is the case for many small companies in this market.

"I see the [instruments] in the market, and I talk to users, and I know senior people in pharma companies that are using the instruments and just love them," he said. "And they still value the potential power of the system, which is ease of use and flexibility."

But, in order to re-establish any meaningful pursuit of the life sciences market, he said, Guava first has to re-build its commercial team, much of which departed earlier this year around the time of the internal rift that developed.

"If you look at the number of people that have left, I wouldn't say that the company has been decimated, but there has definitely been a departure, and that level of departure means that they have to hire people in the commercial organization," he added. "As far as I know, they haven't hired people, but they've been losing staff. Many of the sales people have left, and there is a weakness there now. If they're going to compete effectively, they need to strengthen. They need a team."

— Ben Butkus ([email protected])

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