Skip to main content
Premium Trial:

Request an Annual Quote

Life Tech's Molecular Biology Systems Division Reports Drop in Q1 Organic Revenues


Life Technologies this week reported a 3 percent decrease in organic revenue for its Molecular Biology Systems division in the first quarter of 2011 amid flat overall organic revenue growth for the company.

Life Tech said that the slowdown in Molecular Biology Systems receipts was due primarily to "difficult" year-over year comparisons for its PCR and molecular biology reagents businesses, although this was partially offset by "strong demand" for the company's TaqMan assay products.

In a conference call discussing Life Tech's Q1 results, CFO David Hoffmeister noted that both PCR and molecular biology reagents "were negatively impacted by reduced consumables demand in Japan, as the majority of customer labs were shut down for a time in the last few weeks of the quarter."

Life Tech also reported a year-over-year decrease in royalties, a large portion of which are derived from the company's qPCR business. The company also informed investors that it expected a company-wide decline in gross margin in the second quarter of 2011 due in part to lower royalties.

In a Q&A session following Life Tech's Q1 conference call, when asked to quantify the qPCR royalty decline in Q1, Hoffmeister said that the company hasn't broken this out by quarter.

Hoffmeister also reiterated that Life Tech expected its qPCR royalty decline in 2011 to total about $20 million, information first disclosed in the company's full-year 2010 financial conference call (PCR Insider, 2/10/11).

"As we've also said, we've got a group that last year was able to more than offset the $15 million decline that we had last year," Hoffmeister said this week. "And so they're basically working away to try and offset it at this point."

In Q1 2011, Life Tech's Molecular Biology Systems division reported non-GAAP revenue of $426 million, a decrease of 1 percent over the same period last year. Excluding impact from currency and acquisitions, this translated to a 3 percent decline in organic revenue growth.

Overall, the company reported revenues of $895.9 million in Q1 2011, a 1 percent increase from $884.9 million in the same quarter last year. Meantime, Q1 organic revenue growth was flat year over year due to a "difficult comparison" to Q1 2010 — which benefitted from H1N1 influenza-related product sales and a large purchase order — and "the extraordinary events that occurred in Japan," Life Tech said.

Excluding the effects of Japanese events and the difficult year-over-year comparisons, the company reported organic growth of 5 percent.

In other divisions, Genetic Systems reported an 8 percent decline in organic revenues; and Cell Systems reported an 11 percent increase in organic revenues in Q1.

For the quarter, Life Tech recorded a profit of $93.6 million, or $.50 per share, a 4 percent improvement from $91.5 million, or $.48 per share, a year ago. In addition, the company increased R&D spending by 1 percent in the quarter to $92.8 million from $91.5 million.

In the Q&A session following Life Tech's Q1 conference call, an investor asked for more clarity on the company's R&D spending patterns.

President and COO Mark Stevenson said that about a third of the company's R&D investment is in sequencing, with another third "across the … microbiology franchise, particularly as we refreshed the qPCR franchise" and in the company's efforts in areas such as digital PCR.

"And then the third area … we broadly describe as some of the benchtop devices, and we have a series of those launches planned," Stevenson said, without elaborating.

The Scan

Drug Response Variants May Be Distinct in Somatic, Germline Samples

Based on variants from across 21 drug response genes, researchers in The Pharmacogenomics Journal suspect that tumor-only DNA sequences may miss drug response clues found in the germline.

Breast Cancer Risk Gene Candidates Found by Multi-Ancestry Low-Frequency Variant Analysis

Researchers narrowed in on new and known risk gene candidates with variant profiles for almost 83,500 individuals with breast cancer and 59,199 unaffected controls in Genome Medicine.

Health-Related Quality of Life Gets Boost After Microbiome-Based Treatment for Recurrent C. Diff

A secondary analysis of Phase 3 clinical trial data in JAMA Network Open suggests an investigational oral microbiome-based drug may lead to enhanced quality of life measures.

Study Follows Consequences of Early Confirmatory Trials for Accelerated Approval Indications

Time to traditional approval or withdrawal was shorter when confirmatory trials started prior to accelerated approval, though overall regulatory outcomes remained similar, a JAMA study finds.