Life Technologies had the "strongest quarter ever" for its Ion Torrent franchise in the fourth quarter of 2012, driven by both "continued strong demand" for the PGM and a "substantial sequential increase" for the Ion Proton, according to a company official.
Some of the Q4 revenue growth for Ion Torrent was offset by an "expected" decline in SOLiD instrument sales, the company said.
During a conference call this week to discuss the firm's fourth-quarter and year-end earnings, chairman and CEO Greg Lucier said that revenue for Ion Torrent more than doubled, for the second consecutive year, in 2012.
While the "fast-growing" desktop sequencer sector is "highly competitive," he estimated that Life Tech now claims 60 percent of that market.
Illumina, for its part, said last week that its MiSeq has more than 50 percent of the market share for desktop sequencers (IS 1/29/2013).
Lucier said the company sees desktop sequencing as "the largest growth segment in the clinical research area of molecular diagnostics" and looks for the Proton "to grow that market share even further now."
During the fourth quarter, Life Tech launched 400-base pair reads for the PGM, which Lucier said help generate more complete bacterial de novo genome assemblies with longer contigs.
The company also launched additional AmpliSeq panels for targeted sequencing, which he said offer "the highest multiplexing," with 3,000 targets per reaction, and require "much less" DNA than offerings by competitors. This feature is "critical in research, especially related to cancer," he said
During the first nine months of selling custom AmpliSeq panels, customers ordered "thousands" of designs, he said, and Life Tech is "rapidly growing" fixed-content panels in the areas of cancer and inherited diseases.
Lucier said that Life Tech has been "extremely pleased" with the high level of customer interest in the Ion Proton, which the company launched in September.
According to Mark Stevenson, Life Tech's president and chief operating officer, the PII chip, which will increase the output of the Proton to enable whole-genome sequencing, will be launched "during the middle of this year." The current PI chip allows for exome and transcriptome sequencing.
He said the company has now "caught up" with the installation of most Protons that were shipped to customers at the end of the third quarter. It also shipped "a large number" of units at the end of the fourth quarter is and is "still working through some of those installations and training."
Q4, Full-Year Results
Life Tech recorded $999 million in total revenue for the fourth quarter, an increase of 4.5 percent over the same period last year, excluding currency effects, that was "driven principally" by the firm's Ion Torrent business as well as its Research Consumables and Bioproduction business.
Of total revenues, $401 million came from the Genetic Analysis business, a 4 percent increase excluding currency; $409 million came from Research Consumables, a 2 percent increase; and $190 million were contributed by Applied Sciences, a 10 percent spike.
SG&A expenses for the quarter increased by 6 percent, to $264 million, and R&D costs decreased by about 7 percent, to $84 million.
Life Tech posted a net income of $110 million for the quarter, an 18 percent increase over the prior year's quarter.
For all of 2012, revenues increased 2.2 percent, to $3.8 billion. Of that, $1.5 billion derived from Genetic Analysis, a 1 percent bump excluding currency; $1.6 billion from Research Consumables, a 2 percent increase; and $719 million from Applied Sciences, an 8 percent boost.
SG&A expenses for the year increased to $1.05 billion, a 5 percent increase, and R&D expenses declined by 9 percent, to $342 million.
Net income for the year was $430 million, a 14 percent increase over 2011.
Life Tech ended the year with $276 million in cash and short-term investments.
For 2013, Life Tech expects revenues to grow between 3 percent and 5 percent over 2012, "driven by another significant increase in our Ion Torrent franchise sales for the third consecutive year," Lucier said, as well as by growth in applied and emerging markets.
He said the capillary electrophoresis business will likely continue to be flat in 2013, "but on a fairly large franchise, we think that's pretty good, given that more and more customers in the diagnostics side see that as the gold standard for confirming next-generation results."
Lucier said the company will continue to invest in markets where it sees growth opportunities, citing next-generation sequencing and molecular diagnostics as examples.
Life Tech's board of directors is still completing an annual strategic review, which it started last summer. As part of that effort, it is "reviewing opportunities to create value for our shareholders," Lucier said, noting that "all ideas are on the table."