By Julia Karow
This story was originally published Feb. 8.
A "record number" of Ion Torrent PGM shipments, along with "solid performance" of consumables products, led to 4 percent revenue growth in the fourth quarter for Life Technologies, the company said last week.
In 2011, the first full year after the launch of the PGM in late 2010, the company shipped more than 700 of the instruments, according to CEO and chairman Greg Lucier, who spoke during a conference call to discuss the firm's earnings. He did not say how many PGMs the company sold during the fourth quarter but noted that there was "substantial" sequential growth over the third quarter.
Growth of Ion Torrent sales, however, was "partially offset" by reduced sales of SOLiD products, according to CFO David Hoffmeister.
At the end of 2011, PGM customers spent the equivalent of $50,000 per year on consumables, a number that Life Tech hopes to increase to $60,000 this year, and eventually to $80,000, its original projection for the platform's annualized consumables pull-through.
Life Tech expects the PGM, which it said is especially suited for sequencing gene panels and small genomes, "to drive growth in 2012 and beyond" and believes that it will "open up vast new horizons in terms of clinical medicine," according to Lucier.
"We will partner and we will out-license that technology to partners that can really make the most of it" in the clinic, he said. "We did that strategy with great success with qPCR in the research realm, and we'll do that strategy with great success in the clinical realm with Ion Torrent." (See related story in Clinical Sequencing News.)
Meanwhile, for the latest SOLiD platform, the 5500, the company expects a $60 million revenue falloff in 2012 as it focuses on its Ion Torrent products, according to Hoffmeister.
Nevertheless, the company still expects to obtain "in the tens of millions" of dollars from SOLiD consumables sales this year, Lucier said. It is also still planning to launch the "Wildfire" upgrade for the 5500 platform, which the firm says will eliminate the emulsion PCR amplification and make that instrument easier to use. "We're very focused on having those customers that own the 5500 get even more productivity," he said.
Lucier reiterated that the company is currently taking orders for the Ion Proton Sequencer, a new benchtop system that promises to sequence a human genome in a day for $1,000 in consumables. Life Tech expects to launch the Ion Proton I chip, which will enable researchers to sequence exomes, in mid-2012, and the Proton II chip, which will allow for complete human genome sequencing, six months later.
Life Tech does not believe that sales of the Ion Proton will have a negative effect on PGM sales. "PGM is for genes and panels and small genomes, Proton is for exomes and genomes," Lucier said.
He added that Life Tech has a program in place that will allow customers who buy a PGM to receive "full credit" for that instrument if they want buy a Proton later on, "so there is no penalty, if you will, of having to make a choice between PGM or Proton," he said.
Life Tech's Genetic Systems division, which includes the Ion Torrent, SOLiD, and capillary electrophoresis platforms, booked $278 million in non-GAAP revenue for the quarter, a 13-percent increase over the year-ago quarter. For the entire year, Genetic Systems revenues grew 8 percent. In addition to increasing Ion Torrent and declining SOLiD sales, there was double-digit growth from forensic products and "low single-digit growth" from the CE business, according to Hoffmeister.
Regarding Life Tech's long-term strategy, Lucier said that the company plans to continue to pursue acquisitions "of various sizes" in order to seize "growth opportunities" in "attractive markets" of the life science and tools industry. He did not say what particular markets Life Tech is currently considering, but said that the company will "take a disciplined approach" in evaluating potential deals.
Life Tech's revenue for the fourth quarter totaled $1.01 billion, up from $932 million during the prior-year period. Net income for the quarter was $127 million, compared to $71 million during the same quarter in 2010.
For all of 2011, Life Tech booked $3.78 billion in revenue, compared to $3.59 billion in 2010. Net income for the year was $412 million, compared to $378 million in 2010.
The company ended the year with $882 million in cash and short-term investments, up from $636 million at the end of the previous quarter.
Starting with the first quarter of this year, Life Tech will report its revenues for three business groups: Research Consumables, Genetic Analysis, and Applied Sciences. These will replace the existing divisions; Molecular Biology, Genetic Systems, and Cell Systems. The new groups "are better matched with how the business has evolved internally" and with the existing markets, Lucier said.
For the first quarter of 2012, Life Tech expects between $915 million and $925 million in revenue. For all of 2012, it anticipates organic revenue to grow between 2 and 4 percent.
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