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Life Technologies' Q3 Revenues Rise 8 Percent on Record SOLiD 4 Sales

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Life Technologies reported after the close of the market Tuesday that it posted revenues of $867.1 million for the third quarter, an 8 percent increase over the third quarter of 2009.

On a non-GAAP basis, revenues increased to $868.7 million for the quarter, compared to $805.1 million in Q3 2009. Wall Street analysts had expected revenues of $856.5 million.

Organically, revenues grew 6 percent year-over-year for the three months ended Sept. 30, the company said in a statement. Excluding sales of H1N1 products and a large Japanese forensics order from a year ago, revenues climbed 9 percent.

For the quarter, the Carlsbad, Calif.-based firm posted a profit of $105.5 million, or $0.56 per share, on a GAAP basis. On an adjusted basis, net income for the quarter was $164.9 million, $0.87 per share, beating analysts' consensus estimate of $0.78 per share.

In Q3 2009, Life Tech had net income of $41.1 million, $0.22 per share, on a GAAP basis, or $134.6 million, $0.73 per share on a non-GAAP basis.

The firm's Genetic Systems division recorded non-GAAP revenues of $227 million, a 12 percent increase over year-ago figures, aided by growth in both its capillary electrophoresis business and next-generation sequencing sales.

CE instruments and consumables grew 5 percent for the quarter year over year, driven by single-digit growth in consumables, and "high demand" for the 3500 Dx CE instrument launched last year, David Hoffmeister, Life Tech's CFO, said during a conference call after the earnings release.

The company's next-gen sequencing business grew in the double-digits, he said, driven by "record sales" of the SOLiD 4 system. President and COO Mark Stevenson added during the call that "a lot of that traction" was in cancer applications where the emphasis is on accuracy.

During the summer, Life Tech acquired Ion Torrent, a company which is developing a chip-based sequencing platform in a deal worth up to $725 million. Life Tech CEO Greg Lucier reiterated that the platform called the Personal Genome Machine will be launched during the fourth quarter.

During the call, Lucier said that the instrument has been in the hands of early-access customers "working through the overall workflow and finishing the refinement of that." One of the drawing points of the platform is that it has "lots of multi-generational growth in it … so it'll be launched at a certain throughput and it'll go up over time in basically the same box," he said.

At a recent investor conference, Lucier said the platform has the capability of "democratizing sequencing" by providing access to the technology to markets, which otherwise would be shut out from sequencing. Today, company officials continued to say that the Personal Genome Machine has a broad range of applications, from larger genome centers that may be interested in doing QC work and sequencing smaller genomes, to smaller centers and hospitals. As a result, the company has "quite a broad go-to market approach," Stevenson said.

Moving ahead, the company continues to monitor and evaluate other technologies that may represent potential acquisitions, though Life Tech is comfortable with its portfolio currently, Lucier said.

As it evaluates potential add-ons, the major requirement is fast turnaround time that can shrink the time needed to get a sequence completed from days to hours. The current technology would not allow that to happen, Lucier said, and Ion Torrent "really presented to us the technology that would enable [sequencing] to move into the clinical realm, and that's why we made the acquisition."

Life Tech's Molecular Biology Systems, its largest division by revenue, posted revenues of $415 million on an adjusted basis, a 2 percent increase from a year ago. While genomic assay products saw strong demand, the PCR and Molecular Biology Reagents businesses faced difficult year-ago comparison figures from H1N1 sales, the company said. Excluding H1N1 product sales, organic revenue for the division was 4 percent.

The company continues to see "good growth" in the qPCR market, Stevenson said. The recently launched ViiA7 real-time PCR system refreshed the company's PCR portfolio on the high end, and going forward, "we're reinventing that game in terms of how we think about qPCR both in terms … of getting to higher throughput and also maybe into the world of digital PCR, which we think is going to be really big going forward," he said.

Life Tech's third division, Cell Systems saw revenues spike 15 percent to $221 million on a non-GAAP basis.

Geographically, the Americas saw the biggest revenue jump, 8 percent organically, while Europe crept up 5 percent, and Asia-Pacific climbed 7 percent. Japan slid 1 percent.

During the quarter, Life Tech spent $90.1 million in R&D on a GAAP basis, up from $82.7 million from a year ago. SG&A costs rose to $240.7 million from $240 million last year.

As of Sept. 30, Life Tech had $537 million in cash and short-term investments, including $19 million held as restricted cash.

The firm also raised its EPS guidance range for fiscal-year 2010 to $3.48-$3.52, up from the previous range of $3.35-$3.50.

In early Wednesday trade on the Nasdaq, shares of Life Technologies were up nearly 6 percent at $50.46.

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