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PerkinElmer Says Q4 Revs Rise 20 Percent, Sees Pharma Using More of Its CBA Service

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PerkinElmer this week reported that fourth-quarter revenues rose 20 percent, fueled by strong growth in its Life and Analytical Sciences segments. The company also said profits for the period climbed 26 percent.
 
President and newly-elected CEO Robert Friel said the company is “seeing more growth on the reagent side than the instrument side,” and as a result will “continue to drive new products particularly into the reagent area … particularly into our cell-based assays and GPCR screening.”
 
Friel also said that PE has noticed increased interest in its cell-based assay-development services as “a number of large pharmas are talking about outsourcing all or part of [their assay development needs].”
 
The firm generated revenues of $511.5 million in the quarter ended Dec. 30, 2007, compared with revenue of $427 million in the fourth quarter a year ago. Sales for its Life and Analytical Sciences segment rose 19 percent to $382.1 million from $320.6 million year over year.
 
“We saw strong growth in our reagent product lines driven by strong acceptance of our new product introductions in the GPCR, kinase, and biomarker drug target classes with both biochemical and cell-based assays,” CFO Jeff Capello said during a conference call following the release of the firm’s financial results.
 
Drug-discovery sales, which represented 23 percent of LAS revenue in the period, increased in the double digits compared to the same period in 2006, said Capello. He went on to say that new product introductions to PE’s reagent businesses drove “very strong” improvements in year-over-year revenue growth compared to Q4 of 2006.
 
PerkinElmer's fourth-quarter net income rose to $52.6 million, or $.44 per share, from $41.7 million, or $.34 per share, in the 2006 fourth quarter.
 

“We saw strong growth in our reagent product lines driven by strong acceptance of our new product introductions in the GPCR, kinase, and biomarker drug target classes with both biochemical and cell-based assays.”

R&D costs edged up 6.3 percent to $28.8 million from $27.1 million year over year, and SG&A costs rose 27.3 percent to $126.9 million from $99.7 million in last year's Q4.
 
However, Friel cautioned that the pharmaceutical market in 2008 will continue to be challenging. “In drug discovery, we believe the market will continue to be challenging this year with large pharma again being under more cost pressures than the biotech firms or the academic labs,” he said.
 
“Despite this, there will be several areas of growth for us due to investments we have made previously in new products and acquisitions” including cell-based assays, assay development services, custom synthesis of radiolabeled compounds, and cell imaging for high-content screening, Friel said.
 
The reagent marketplace is experiencing a shift from more general-purpose reagents to specific-purpose reagents, said Greg Summe, PE’s chairman and CEO. He went on to say that, “What [PE has] been trying to do over the last year is focus more of [its] R&D on those reagents coupled with the acquisition [PE] made of Euroscreen and the collaboration with Axxam on Photina (see CBA News, 5/25/07).
 
For full-year 2007, PerkinElmer said revenue swelled 20 percent to $1.79 billion from $1.55 billion in 2006. Net income for the year increased 10 percent to $131.7 million, or $1.09 per share, from $119.6 million, or $.95 per share, in 2006.
 
PerkinElmer expects fiscal 2008 revenue and EPS growth to be in the low double digits to mid-teens.
 
The firm finished 2007 with $203.3 million in cash and cash equivalents.

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