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Day One at JP Morgan: Beckman Coulter; Agilent; Waters

SAN FRANCISCO (GenomeWeb News) – The first day of the JP Morgan Healthcare Conference, held here this week, featured presentations by several firms in the research tools and molecular diagnostics space.

First up was Beckman Coulter, which in October reported third-quarter revenue growth of 8 percent, driven by strong recurring revenues from supplies, service, and lease payments.

Yesterday, Paul Glyer, Beckman's SVP of corporate strategy and business development, reiterated the company's goal of long-term recurring revenue growth of 7 percent to 9 percent. However, he said that the firm anticipates recurring revenue growth of between 6 percent and 8 percent this year, due to the economic climate.

Glyer said that there are four key drivers for Beckman Coulter in meeting its revenue goals: growth in China; new launches in its cellular analysis business between 2009 and 2011; its recent acquisition of Olympus Diagnostics' assets; and molecular diagnostics.

Beckman Coulter had initially planned to launch its DxN molecular diagnostics system in 2010, but last year the firm pushed that timeline out to 2011. On Monday, Glyer said that the system would launch in 2012, with "meaningful revenues" expected from the system in 2013. He didn't say why the launch date was extended to 2012.

The DxN is a fully automated sample-to-result molecular diagnostics system. At last year's JP Morgan Healthcare Conference, Beckman Chairman, President, and CEO Scott Garrett said that a prototype of the system had been completed and the firm would continue developing it before a commercial launch. At the time, Garrett said that although it is important to get to the market quickly with the system, it is more important that Beckman "establish a state-of-the-art system for hospitals."

Glyer said today that though less than 20 percent of hospital labs are currently performing molecular diagnostics, the firm expects that in 10 years more than 40 percent will be running such tests.

Agilent and Waters

Agilent Technologies executives gave a sweeping view of the firm's operations, which includes many fields beyond life sciences research. Nick Roelofs, president of Agilent's Life Sciences Group, focused on the firm's efforts in the life sciences, as well as food testing and chemical analysis.

He noted that the firm introduced several products in 2009 intended to keep pushing Agilent's focus more toward its life sciences business. He cited the launch of its 1290 Infinity UHPLC System, a variety of new mass spectrometers, the SureSelect Target Enrichment application for next-generation sequencing experiments, and its SurePrint G3 CGH and CNV microarrays as key products for the firm.

Though Agilent is known primarily as an instrumentation company, CFO Adrian Dillon pointed to the firm's growing efforts in selling consumables, which provide steady streams of income and drive profit margins up.

A major question hanging over Agilent is its pending acquisition of Varian, which would greatly expand its presence in complementary life science markets. The company is currently engaged in negotiations with the US Federal Trade Commission and European Union regulatory authorities regarding competition concerns. According to Dillon, EU authorities are "testing some proposed solutions," and Agilent expects hear from them about those potential solutions by Jan. 20.

Finally, Dillon also noted that Agilent has restored employees' full salaries following last year's across-the-board, 10 percent cut in wages.

While Agilent officials touted their UHPLC System, the firm's chief competitor in that market, Waters, created the ultra-high-performance liquid chromatography market years ago with its Acquity. Executives of that firm said that they have yet to see any lost orders to Agilent's new entry, but they noted it's early in the sales cycle. Doug Berthiaume, Waters' chairman, president, and CEO, said that the company plans enhancements for the Acquity this year, but he did not provide details.

He predicted 2010 organic revenue growth in the mid-single digits, and cited the challenging biotech market. Berthiaume said that he expects the biotech market to be marginally better than last year.

The firm believes its new Synapt G2 System will help drive those revenues. Berthiaume noted that sales of the Synapt G2, which was introduced at ASMS earlier in 2009 and launched in the fourth quarter of 2009, have ramped up faster than any other mass spec product in the history of the firm. He said that right now Waters can't keep up with the demand for the systems, but it hopes to manufacture at demand in the second quarter of this year.