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Following FDA Registration of Facility, Agilent Stays Mum on Dx Plans

This article has been corrected to remove a reference to Affymetrix's CytoScan HD product, which was incorrectly identified as Agilent's product.

By Tony Fong

NEW YORK (GenomeWeb News) – Will Agilent Technologies become the next big player in the diagnostics space?

Probably not, according to one Wall Street analyst.

Late last month, the company registered its 80,000-square-foot Cedar Creek, Texas facility with the US Food and Drug Administration as a medical device establishment — a move that enables it to manufacture diagnostic products.

The company has been largely mum about its plans in the diagnostics space, and a company official this week shed little light on its goals going forward. But one analyst said that although Agilent, which is still in the midst of expanding its life science business, may be ramping up its diagnostics business, it will more likely remain a peripheral player in the space, rather than become a major presence.

In an interview with GWDN this week Agilent VP of Genomics Robert Schueren declined to provide details about the company's diagnostics plans, any R&D efforts underway, or opportunities it hopes to leverage. In general, he said, the company registered its Cedar Creek facility with FDA "because we think a lot of the technologies that we have lend themselves very well to diagnostic platforms."

Those technologies include its microarrays, oligo library synthesis, enzymes, and mass spectrometers.

"It just seemed to be a good way to … further open up opportunities for our existing technologies," Schueren said. "They have served the life science community very well and have done very nicely in that market, but we also wanted to have the opportunity to explore taking those technologies and potentially other ones into the clinical world."

According to Ross Muken, an analyst at investment firm Deutsche Bank Securities, Agilent's interest in the diagnostics space dates back a number of years, at least to the hiring of Nick Roelofs in 2006. Now president of the Life Sciences Group, he came from Bio-Rad, and before that had been COO of Stratagene, which Agilent acquired in 2007. That deal provided Agilent with a portfolio of PCR- and molecular diagnostics-related reagents and technologies.

But at this point, Muken said, Agilent doesn't appear to have a set plan for growing out a diagnostic business organically. The company probably will not go into the direct testing market, he added, and if it did, it would need to partner with another firm, or acquire one, with expertise in that area.

"It's very hard to build those types of strategy organically," he said.

Schueren would not comment specifically about Agilent's M&A strategy in relation to its diagnostics business. However, he said that "[t]he good news is that by having a facility that's registered, it opens up any possibility."

Acquiring such expertise may be out of the question for Agilent, though, Muken said. Diagnostic shops carry a heavy price, and Agilent has historically been price-sensitive on its purchases.

"I would say that it's not highly likely for them to look to any sizeable acquisition as a means to get competency in this space," Muken said.

He also expressed skepticism that Agilent would be looking to develop its own diagnostic platforms and cited the company's sale of Hycor last year. Agilent acquired the company, which specializes in allergy, autoimmune, and urinalysis diagnostics, as part of the Stratagene deal.

"I would say that it's highly unlikely that they're going to try to build a platform business," Muken said. More probable is that Agilent's diagnostics focus will be on developing reagents, consumables, and workflow solutions.