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After Slow Start, Market Starting to Warm to Acquity UPLC, Waters Says

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Waters believes the market for liquid chromatographers, long dominated by HPLCs, is slowly warming to its Acquity UPLC, company officials said at an investor conference this week.
 
Since the Acquity was launched in 2004, Waters has been hawking it as a technological breakthrough in separations science. But last month, Waters CFO John Ornell acknowledged that compared to the HPLC market, which has about 200,000 systems installed industry-wide, the customer base for Acquity systems has around 2,000 installed systems [See PM 02/08/07].
 
This week, however, Ornell said that the landscape is slowly changing and HPLC loyalists are beginning to switch to the Acquity platform.
 
“We think we’re just beginning to see the impact of that product and it will be over the course of several years that that product will continue to permeate the market,” Ornell said at the Lehman Brothers 10th Annual Global Healthcare Conference in Miami.
 
During the company’s fourth-quarter earnings release, Waters said that sales of its entire portfolio of LC instruments rose 12 percent but did not break out its UPLC figures [See PM 01/25/07].       
 
According to Gene Cassis, vice president of investor relations and worldwide development at Waters, the HPLC marketed can be separated into one half that deals with applications that are regulated, such as pharmaceutical QA/QC, and another half that is more research oriented, such as drug discovery and development.
 
The latter is where Acquity has seen the greatest penetration rate, Cassis told the audience in Miami.
 
The Acquity “has taken a significant part of that HPLC business in the discovery area,” he said. “Where we [have] yet to see penetration in the UPLC in a significant manner is in regulated testing where you have laboratories that have [been running] for a number of years, and they typically replace aged instruments with instruments that may be updated but essentially are similar technologies.
 
“We’re [not] yet to a point where we’ve seen that jump of UPLC technology from research applications to regulated applications. We’re confident that it will come because those research applications that are using HPLC, when they finally result in product, we believe the technology will move with it,” Cassis said.
 
And when it does, Waters officials added, growth will be seen on the consumables side as well, because “we have a much higher captive rate with the consumable columns than we do with the traditional HPLC,” Ornell said. “As the base of instrumentation gets larger and larger, there’s the opportunity to grow chemistry sales even faster.”
 
Mass Spec Renaissance
 
Waters also continued to talk about its reemergence in the mass spectrometry space after being forced to purge its portfolio several years ago following a series of patent disputes with Applied Biosystems and MDS Sciex that left Waters’ mass spec business in disarray.
 
“[Mass spec] for us has been a bit of a dilemma,” Ornell said. “It’s really only been I’ll say the second half of last year that we were able to get a full new product offering up and down the portfolio.”
 
He added that mass spec sales grew in the double digits during the fourth quarter of 2006, and the company expects the same growth rate for 2007.
 
In 2006, Waters introduced a new single-quadrupole and a new triple-quadrupole instrument designed specifically to be linked to the Acquity UPLC. And it launched the Synapt HDMS that features technology allowing for the differentiation of ions based on size and shape as well as mass.
 
“All three of these instruments enter 2007 giving us a pretty interesting set of capabilities that we haven’t seen in our product offering in some time,” Ornell said. 
 
Other companies in the proteomics space also presented at the conference though not much mention was made of that part of their businesses. Those that did talk about their proteomics operations said the following:
 

“Where we [have] yet to see penetration in the UPLC in a significant manner is in regulated testing where you have laboratories that have [been running] for a number of years, and they typically replace aged instruments with instruments that may be updated but essentially are similar technologies.”

Bruker BioSciences
 
Bruker BioSciences CFO William Knight spotlighted applications for MALDI technology as an emerging area, particularly as a tool allowing clinicians to analyze what is happening in a disease state on a molecular level as well as cellular level.
 
But, he said, whether it will ever take off as a clinical diagnostic tool is up to government regulators. “This is a great potential down the road if there ever is FDA approval for it,” Knight said.
 
During his presentation, he said Bruker Daltonics is the top player in the MALDI-TOF mass spec market and shares the number one spot in the ion trap arena, though he did not say with whom. Bruker is a new player in the electrospray MS field, he said, and sees “market share opportunities for us.”
 
While Bruker Daltonics has focused primarily on the proteomics space, “We are getting into other segments of healthcare with molecular imaging and microbiology,” he said.
 
Thermo Fisher Scientific
 
Thermo Fisher Scientific CEOMarijn Dekkers said that as a result of the merger between Thermo Electron and Fisher Scientific, the new company now has greater sample-preparation capability that, coupled with Thermo’s instrument expertise, has allowed it to offer workflow solutions to customers.
 
“This infusion of bio-reagents and laboratory consumables capability has enabled us to take sample preparations to yet another level, and our customers are very excited about us pulling together the reagents and the instrumentation capabilities now in one workflow,” Dekkers said.
 
“We don’t just focus on any workflow,” he added. “We’re focusing on the ones that are new, [such as] biomarkers, proteomics … where customers want to get new information about cell biology and an integrated cell structure but find it hard to put all the separate pieces together in an optimized way.”

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