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Bio-Rad Q3 Revenues Buoyed by Life Science Sales as QuantaLife Integration Continues

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Bio-Rad said this week that its third-quarter revenues rose just over 1 percent year-over-year excluding currency effects, buoyed by strong growth in its Life Science segment, which houses the company's PCR, electrophoresis, and sample prep technologies, among others.

In addition, in a conference call discussing the company's Q3 earnings, company officials responded to analysts' questions about Bio-Rad's recent acquisition of digital PCR startup QuantaLife, but provided few new details as it works to integrate QuantaLife's operations into its own.

"We're just in the process of rolling this product out in the US and a sort of greater release at the end of this year for the rest of the world," Brad Crutchfield, vice president and group manager for life sciences, said during the call.

"Right now we're just trying to make that assessment, so I really can't give you anything specific," Crutchfield added. "Needless to say, we're working really hard to maximize this technology."

Later in the call, President and CEO Norman Schwartz estimated that the digital PCR market in which QuantaLife plays is "potentially a several hundred million dollar market."

According to a report on the nucleic acid amplification industry published earlier this month by life science market research firm Percepta Associates, the 2011 estimated global market size for digital PCR is $1.6 million, and the 2012 projected global market size is $1.8 million, both by far the smallest of several nucleic acid amplification market segments.

However, the report also noted that despite the fact that Life Technologies is currently the digital PCR market leader, 22 percent of survey respondents said that they have switched digital PCR suppliers in the last six months, the largest of all market segments; while approximately 67 percent said that their digital PCR usage levels would increase over the next year.

QuantaLife was not identified as a significant digital PCR market player in the report, although the company launched its first product, the Droplet Digital system, late last year, while other suppliers identified in the report have had products on the market for a longer period of time.

From a financial standpoint, the QuantaLife acquisition will in the near term be an "operating drag" on Bio-Rad through the rest of this year, vice president and CFO Christine Tsingos said during the call.

"Certainly in our expectation for the full year we've included the impact of QuantaLife … [and] once we layer on top amortization of intangibles, it will be a bigger negative impact," Tsingos added. "But we are only just now starting the valuation, and when we get to our next earnings call, we'll have a greater detailed understanding of what that impact will be."

Bio-Rad announced it was acquiring QuantaLife earlier this month for $162 million (PCR Insider, 10/6/11).

For the quarter ended Sept. 30, Bio-Rad reported revenues of $516.5 million including currency effects, up 9.5 percent compared to $471.5 million in the same quarter last year; but said that revenues increased 1.1 percent on a currency-neutral basis.

Bio-Rad's net income inched up 2 percent to $45.9 million from $44.8 million in the third quarter of 2010.

Receipts for the company's Life Science segment totaled $171.5 million, up 11.9 percent compared to Q3 2010; or 5.1 percent on a currency-neutral basis. These results reflected strength in the segment's electrophoresis, imaging, and nucleic acid amplification product lines; several new product launches; and assays for the Bio-Plex suspension array system.

Meanwhile, Bio-Rad's Clinical Diagnostics segment recorded net sales of $341.3 million in Q3, up 8.4 percent from the prior year including currency effects, but down 0.9 percent on a currency-neutral basis.

Bio-Rad ended the quarter with $671 million in cash and cash equivalents and $239.2 million in short-term investments.

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