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Life Technologies Posts 7 Percent Q4 Revenue Growth

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Life Technologies reported after the close of the market Thursday that its fourth-quarter revenues rose 7 percent year over year with double-digit sales increases for its Genetic Systems and Cell Systems divisions.

The Carlsbad, Calif.-based firm brought in total revenues, on a non-GAAP basis, of $933.6 million for the three-month period ended Dec. 31, compared to $874.1 million for the fourth quarter of 2009. Excluding currency impact and acquisitions and divestitures, the firm's sales were up 5 percent.

Life Tech inched past analysts' consensus estimate of revenues of $929.4 million for the quarter.

The firm's Genetic Systems division, which includes its sequencing products, reported sales growth of 11 percent to $246 million. Life Tech said its next-generation sequencing and forensics products delivered double-digit growth, while its capillary electrophoresis sequencing business returned growth in the mid single digits. It also noted that excluding the impact of a Japanese Police order in the prior year, organic growth was 16 percent for the quarter and 13 percent for full-year 2010.

Its Molecular Biology Systems division reported 2 percent revenue growth to $445 million — however, on an organic basis, sales for the division were down 1 percent, due to a weaker H1N1 flu testing season this year. Excluding H1N1-related revenue, organic growth was around 4 percent for the quarter.

The Cell Systems division had Q4 revenues of $238 million, up 11 percent year over year. The firm noted that it had double-digit growth in its bioproduction and Dynal beads business.

On a geographic basis, organic sales for the Americas increased 7 percent, sales for Europe rose 3 percent, and Asia-Pacific sales climbed 12 percent. Sales in Japan declined 4 percent.

Life Tech's net income for the quarter, also on a non-GAAP basis, was $172.3 million, or $.90 per share, besting analysts' EPS expectations of $.87. Its Q4 2009 net income was $149.6 million, or $.80 per share.

The firm's R&D spending for the quarter was $98.6 million, up around 8 percent from $91.4 million, while SG&A spending was up 3 percent at $258.8 million from $250.8 million for Q4 2009.

For full-year 2010, Life Tech's revenues increased 9 percent to $3.59 billion from $3.3 billion, matching Wall Street estimates.

Sales for the Genetic Systems division increased 11 percent to $946 million, while sales for the Molecular Biology Systems division rose 6 percent to $1.7 billion, and sales for the Cell Systems division jumped 13 percent to $904 million.

During a conference call, Life Technologies Chairman and CEO Greg Lucier noted that the firm's instrument business, which comprises around 20 percent of Life Tech's revenues, grew more than 8 percent in 2010, driven by the ViiA 7 PCR instrument, the 3500 CE sequencer, and SOLiD sequencers. Its consumables sales grew 7 percent in 2010.

CFO David Hoffmeister said that SOLiD instruments and consumables sales grew 50 percent for 2010. He said sales of the Ion Torrent Personal Genome Machine are "off to a good start, and we anticipate that Ion Torrent-related revenue will be a significant contributor to growth in the second half of 2011."

Life Tech acquired Ion Torrent in the second half of 2010 in a deal initially valued at $375 million but could rise to $725 million if certain technical and time-based milestones are met through 2012.

On a geographic basis, organic sales for full-year 2010 in the Americas increased 7 percent, while Europe increased 4 percent, Asia-Pacific sales jumped 15 percent, and Japan sales increased 4 percent.

Life Tech's full-year 2010 net income was $676.7 million, or $3.55 per share, up from $551.1 million, or $3.04 per share, for 2009. It beat analysts' estimate of $3.50 per share for 2010.

The firm's R&D spending for the year was $363.3 million versus $333.9 million for 2009, and its SG&A spending increased to $1 billion from $977.6 million.

Life Tech finished the year with $854.8 million in cash and short-term investments.

For 2011, the firm expects organic revenues to increase in the mid-single digits with approximately $3.80 to $3.95 of non-GAAP earnings per share. It added that currency translation is expected to have no impact on revenue growth rates in 2011, but a $.13 negative impact on earnings per share.

"We have presumed a fairly stable funding environment," Lucier said during the call. "We continue to see good strength in the biotech/pharma sector across the world. We think academic funding will be basically flat-ish versus last year, and we're not counting on any improvement in the NIH in our forecast. We see continued robust demand in the Asia-Pacific region, and Latin America, and the Middle East."

In early Friday trade on the Nasdaq, shares of Life Tech dropped 5 percent to $52.19.

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