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Thermo Electron, Invitrogen, Millipore, and Agilent Update Investors at UBS Life Sciences Conference

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At the UBS Global Life Sciences investors conference this week in New York, a Thermo Electron official updated investors on the company’s impending acquisition of Fisher Biosciences; Invitrogen’s CEO talked about the firm’s emerging instrument offerings; Millipore’s chief discussed the pending acquisition of Serologicals; while a senior Agilent official said that cellular analysis was not on the company’s radar screen.
 
Thermo Fisher
 
Mark Casper, senior vice president of Thermo Electron, provided investors with an update of Thermo’s pending merger with Fisher Biosciences during a breakout session at the conference.
 
According to Casper, the company must still fulfill two tasks before it can close the deal, expected to happen in the fourth quarter: Divest a business unit to fulfill its requirements with the US Federal Trade Commission and obtain feedback from European Union trade regulators.
 
Casper said that Thermo completed the appropriate paperwork with the FTC but didn’t expect the agency to issue the company a second request, which will require Thermo to divest a $17-million overlapping business unit, yet to be named.
 
Regarding Thermo’s filings with the EU, Casper said that regulators in Europe are expected to provide feedback on Oct. 24.
 
In response to an analyst’s question about the level of interaction between the companies so far, Casper said that it has been “substantial,” with 60 separate teams jointly working on various aspects of the merger.
 
Another conference attendee inquired about the possibility of layoffs. According to Casper, the new senior management structure has been defined for a while, and top managers have been informed of their roles.
 
Casper also said that the rest of the companies’ employees have yet to be informed of any overlapping businesses that might result in layoffs.
 
Invitrogen
 
Despite Invitrogen’s announcement this week that it had launched the first two products in a planned series of low-cost, benchtop instruments, the company will likely not foray into the capital equipment market, chairman and CEO Greg Lucier told investors at a UBS breakout session.
 
“We told investors a year ago that we would be developing an engineering team to produce benchtop instruments to consume some of the reagents that we sell,” Lucier said.
 
The launch, therefore, of the iBlot Dry Blotting system and iPrep purification instrument “are the first of several of these instruments,” Lucier added. “We don’t want to get into these very expensive instrumentation platforms – just benchtop instruments that will complement our reagent portfolio.”
 
The iBlot dry blotting system transfers proteins from polyacrylamide gels to nitrocellulose membranes in preparation for downstream analysis; the iPrep purification instrument automates nucleic acid purification using the company’s ChargeSwitch technology.
 
In Invitrogen’s general presentation, Lucier painted a rosy picture for the continued expansion of the life sciences research tools market, especially among private shops, despite the slowdown in pharma spending.
 
In particular, he cited a recent Weisel Partners report stating that biotech venture capital funding was currently at an all-time high. Lucier also said that despite National Institutes of Health funding being “flat” recently, Invitrogen expected its portion of that funding to increase significantly by 2008.
 
Millipore/Serologicals
 
Martin Madaus, chairman, president, and CEO of Millipore, told investors that the company’s pending acquisition of Serologicals will double the value of Millipore by 2009, with biosciences and bioprocess remaining the two top areas of growth for the company.
 
He added that the Serologicals acquisition now allows Millipore to offer more “turn-key” assay or workflow kits as opposed to selling homebrew components as it has more often done in the past.
 
Madaus said that in 2005 Millipore generated approximately 7 percent of its revenues from drug discovery products; 7 percent from research reagents; 11 percent from cell culture; 13 percent from sample preparation tools; and 29 percent from its legacy chromatography and filtration businesses.
 
“Chromatography and filtration remain our biggest business,” Madaus said. “However, we are not just a filtration company anymore.”
 
Madaus reiterated that the acquisition is expected to close in Q2 of 2007, and that the company has already cleared the major stumbling blocks in the pending integration — namely, “competitive pressures in the drug-discovery market.” He did not elaborate.
 
Madaus added that in the near term Millipore is focused on creating value from the Serologicals acquisition, and that it is “accelerating the operational consolidation” of the two companies. The company’s near-term R&D priorities are in the area of drug discovery, multiplexing, and antibodies.
 
Agilent
 
Fran DiNuzzo, senior director of business development for Agilent’s Life Sciences and Chemical Analysis business, told investors that cellular analysis was not on the company’s radar screen.
 
Industry insiders had been speculating for some time that Agilent’s strengths in instrumentation, optics, and software would make it a natural fit in the high-content cellular imaging or cellular analysis market.
 
DiNuzzo said that although Agilent is keeping an eye on the cell-analysis market, which has become a hot area for tool vendors, he does not think the firm will jump into the market anytime soon. “We’ll get into something when we know we can be number one or two in a market,” he said.