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Life Tech's CE Research Business Picked Up in Q3; Company to Share Single-Molecule Results Next Year

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Life Technologies officials said this week that the company plans to show data from its single-molecule sequencing R&D effort sometime next year, and that it continues to see opportunities for short-read sequencing technologies for the next three to five years.

During the third quarter, the company saw a somewhat unexpected single-digit increase in its capillary electrophoresis business for research — still the largest part of its overall sequencing business — as its CE business in applied markets grew in the double digits and as it continued to "gain traction" in second-gen sequencing with its SOLiD system.

The company is also keeping an eye out for future sequencing technologies beyond its single-molecule sequencing program, according to Life Tech Chairman and CEO Greg Lucier.

"We are going to be, over the course of time, the sequencing company, and we will have a range of technologies to offer to customers, and we are very serious about that commitment," Lucier vowed during a call with investors and analysts to discuss the company's earnings for the three-month period ended Sept. 30.

Overall, Life Tech booked $800.1 million in revenues during the third quarter. Non-GAAP revenues totaled $805 million, a 3-percent increase over last year's receipts during the same period, when Invitrogen and Applied Biosystems were separate companies.

Life Tech's Genetic Systems division, its second-largest division, which includes its CE business for research and applied markets, as well as its SOLiD business, generated $216 million in revenues during the quarter, an increase of 5 percent over the year-ago period. Organic growth in this segment, which excludes currency effects and the divestiture of the company's LIMS business during the quarter, was 7 percent year over year.

The CE business for research, which the firm previously said accounts for approximately 50 percent of the division's revenues, grew "in the low single digits," according to Life Tech CFO David Hoffmeister, driven by instrument sales in the Asia-Pacific region, as well as by licensing revenue.

"We have certainly been surprised a little bit by how strong CE has remained in some of the research segments," said Life Tech President and COO Mark Stevenson.

The applied markets business for CE, which includes reagent kits and consumables, grew "in the double digits," Hoffmeister reported, mentioning specifically a deal to equip Japan's police force with 3130xl CE sequencers. "This is an example of how this gold standard in sequencing continues to have viable markets and growth opportunities today, even though it's a technology that's been around for a while," he said.

The company also last week introduced the 3500 Genetic Analyzer, a low-to-medium-throughput CE instrument (see In Sequence 5/26/2009), which "will also begin to give us a strength in the CE market," according to Stevenson, and is expected to be used in hospitals and diagnostic labs. However, the "medium-term trend" continues to be next-generation sequencing replacing CE for research applications, he said.

According to Hoffmeister, Life Tech continued to "gain traction in next-generation sequencing as we improve the usability of the SOLiD platform," adding that "continuous improvement in the technology, along with investments in our service, sales, and marketing are paying off." He did not provide further details on revenues from SOLiD.

Last week, the company launched SOLiD 3 Plus, a software update for its SOLiD platform that increases the system's throughput, decreases the run time, lowers the cost of sequencing, and facilitates the data analysis (see other article in this issue).

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Stevenson said that the update has enabled at least one unnamed SOLiD customer, who he said presented results at the American Society for Human Genetics meeting last week, to generate 50 gigabases of data in a single run.

In addition to increasing throughput and improving software, the company is "making good progress" in automating the front-end sample prep for SOLiD, he said, and plans to launch that automation solution "during the early part of next year."

According to Stevenson, there will be "continuing opportunity for the short-read systems, such as our SOLiD system," for the next three to five years, owing to their high throughput.

Lucier mentioned later in the call that the company has "a very exciting, clear roadmap for SOLiD over the next couple of years" that will include higher throughput and accuracy, as well as "more usability with automation."

Single-Molecule and 'Beyond'

Company officials also commented on Life Tech's other R&D efforts in sequencing. According to Lucier, the firm plans to increase its headcount for sequencing R&D next year for "a number of different platforms — not just SOLiD, but technologies beyond that in single-molecule sequencing."

The company's ongoing program in single-molecule sequencing "is progressing well," Stevenson said, "and we believe we will be introducing a competitive platform in the coming market here."

The new platform, he said, is expected to produce "long-run reads with high accuracy," and Life Tech, which is currently developing a single-molecule sequencing chemistry, plans to "start demonstrating and showing some of that data during next year, 2010."

But although Life Tech believes its single-molecule sequencing technology will be "a game changer," according to Lucier, he said the company is already looking ahead to what's next in sequencing.

"We have a fairly large team, probably the biggest in the world, out scouring the generation of technology beyond that," Lucier said. "And we are working on intellectual property, we are working on licensing, we are working on collaborations with a generation of technology that even exceeds single molecule." He did not elaborate on the nature of that technology.

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