Skip to main content
Premium Trial:

Request an Annual Quote

Promising Profitability, Guava Plans to Expand Products, Reach, Clinical Deals

Premium
Guava Technologies is for the first time on the cusp of profitability, expects an approximately 50-percent spike in revenues this year, and hopes to maintain year-over-year revenue growth of approximately 45 percent, the company’s CEO said during an investor conference held in New York this week.
 
In addition, Guava, which sells benchtop microfluidics-based cellular analysis platforms, plans to rapidly expand its product lines and sales reach into the basic cellular analysis research market, which it estimates to be $1 billion. It will also continue to pursue clinical applications, such as HIV patient monitoring, primarily through partnerships and outlicensing deals.
 
Speaking at Piper Jaffray’s annual healthcare conference this week, Guava President and CEO Lawrence Bruder said the company is “just at the point of attaining profitability,” and will generate more than $20 million in revenues this year – a 50-percent improvement over 2005 receipts.
 
Guava has enjoyed accelerated revenue growth since the beginning of 2005, when it logged a 30-percent increase in sales over the previous year.
 
This growth, mostly derived from the basic research market, seems to validate a strategy the firm launched a year and a half ago to focus on the basic cellular-analysis research market and downplay its diagnostics efforts.
 
Bruder said that about 80 percent of Guava’s sales this year were driven by new products, which included the EasyCyte Plus and the EasyCyte Mini systems, both of which improved upon prior instruments through additional laser lines, which enable greater multiplexing. These instruments joined the company’s original PCA and PCA-96 tools for single-sample and 96-well analysis, respectively.
 
Guava believes it has carved out a niche for its products in pharma, biotech, and academia on the shoulders of the well-established traditional flow cytometry industry by offering a product that bridges the gap between dedicated, easy-to-use flow systems marketed by Beckman Coulter and Partec, and high-end systems sold by Becton Dickinson, Beckman, and Dako.
 
“If you take a look at our typical customers, we are selling either to people that are making their first investment into a cytometry system, and … are typically using a microscope; or to customers that are utilizing flow cytometry systems, but don’t have access to their own system,” Bruder said. “They have to carry their cells down the hall or to another building.”
 
Bruder said this translates into a market-expansion opportunity. According to Bruder, flow cytometry-based research is a $500 million to $1 billion market that is growing around eight percent a year.
 
“We believe that our market at this point is to sell to those people that do not have access to their own individual cytometer, and we believe that’s somewhere in the neighborhood of 15,000 or 20,000 different labs,” Bruder said.
 
He added that Guava estimates that each of these core labs supports five to eight users, and that this represents an opportunity for Guava in the range of $1 billion for instruments alone. Guava also has a growing reagents portfolio which, along with related services, may add about $75 million to $100 million in annual recurring revenue to the mix.
 
To this point, Guava estimates that it has penetrated “only to about five percent” of its potential, he added.
 
Bruder said several key accounts helped drive the relatively rapid uptake of its systems, including more than 30 units placed at Merck, more than 20 at the National Institutes of Health, Pfizer, and Amgen; and more than 10 at GlaxoSmithKline and Bristol-Myers Squibb.
 
Furthermore, the company last year reached out further to the academic research market by introducing the EasyCyte Mini, which “was designed for the academic account – $50,000 puts people into a cellular analysis system,” Bruder said. “The first system we placed at Carnegie Mellon and the second was at the University of North Dakota. That’s the kind of expansion and market opportunity we’re really looking for.”
 
Clinically Speaking
 
Guava’s positive sales figures seem to support the company’s shift in strategy in 2005 toward the basic research market and away from clinical applications.
 
However, the company hasn’t completely abandoned clinical applications. Earlier this year, Guava received 510(k) clearance from the US Food and Drug Administration to sell its EZCD4 cellular analysis system in the US for identifying and quantifying CD4+ lymphocytes in whole blood to monitor HIV-positive patients.
 

“We believe that our market at this point is to sell to those people that do not have access to their own individual cytometer, and we believe that’s somewhere in the neighborhood of 15,000 or 20,000 different labs.”

At the time, Lalit Dhir, the company’s vice president of corporate development and strategic marketing, told CBA News that although Guava made a decision to focus mostly on research applications, it would likely continue to pursue partnerships and licensing deals with other companies for clinical applications of the product.
 
This week, Bruder echoed some of those comments. First, the company is nearing ISO certification for the EZCD4 system and plans to roll the instrument out in Europe in 2007, he said. Currently, EZCD4 is sold mostly in Africa and India.
 
In addition, the company sees several future areas of growth on the clinical side.
 
“There has always been a need for cell-analysis systems in the clinical area, especially in areas like oncology; leukemia and lymphoma; women’s health, like human papillomavirus and PAP; infectious diseases such as HIV; and in blood banking and looking at stem cells,” Bruder said. “The technology really does provide the ability to simplify cell analysis, and that’s the kind of analysis that takes place in a clinical environment.”
 
Apparently, Guava still has no plans to go this route alone. In fact, Guava is “just about ready to close a clinical outlicensing deal” with a company researching HPV, Bruder said.
 
Looking forward, Guava expects to grow revenue 45 percent in 2007 and beyond through partnerships in the clinical and research markets, geographical expansion into Europe, and by introducing new products, especially on the reagent side.
 
“The technology really does allow us to expand to different areas,” Bruder said. “There is a recurring revenue piece with regards to reagents; and we’ll also add to this by partnering, which will start to guarantee revenues for us in years going forward.
 

“This company right now is really in a position to continue to grow strongly,” he added. “We have what we consider to be a validated, very robust technology. It’s been around for a while and we’ve pointed it in the right direction – it’s focused. And finally, as we move into 2007, we can talk about profitability, which is really a great milestone.”

The Scan

Dropped Charges

The US Justice Department has dropped visa fraud charges against five Chinese researchers, according to the Wall Street Journal.

More Kids

The Associated Press says Moderna is expanding its SARS-CoV-2 vaccine study to included additional children and may include even younger children.

PNAS Papers on Rat Clues to Human Migration, Thyroid Cancer, PolyG-DS

In PNAS this week: ancient rat genome analysis gives hints to human migrations, WDR77 gene mutations in thyroid cancer, and more.

Purnell Choppin Dies

Purnell Choppin, a virologist who led the Howard Hughes Medical Institute, has died at 91, according to the Washington Post.