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As Agilent Targets Non-profit Space to Grow Life Sciences, Proteomics Tools Remain Key

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As Agilent now turns its focus on the non-profit sector to grow its life science business, its suite of proteomics tools and instruments will continue to play a crucial role, a company executive told analysts last week.
 
At an investor forum to brief Wall Street about Agilent’s plans for its Bio-Analytical measurement division, Nick Roelofs, vice president and general manager of life science solutions for Agilent, said that pharma increasingly is looking at developing biological entities — as opposed to chemical entities — as therapeutics, and relying on the academic and government arenas to push along those biological entities.
 
As Agilent pushes into those arenas to keep its life science operations competitive, its proteomics portfolio will play an important role in an expansion into a sector that represents about half of what the company estimates to be a $14 billion life science market.
 
“The academic/government segment is a huge opportunity for us a priori,” Roelofs told the audience. “We have limited penetration here [and] we’ve got a chance to go after this segment.
 
“We’ve got new technology opportunities, high end mass specs. We’re very focused, therefore, on functional proteomics — this is our mass spec and LC-MS. We’re really on top of that right now, growing wildly,” he said.
 
Earlier this year, the company revved up its push into the proteomics space as a result of its transformation into a pure-play measurement firm from a general technology outfit [See PM 01/1/07], but last week, Roelofs said that Agilent’s interest in the life science market dates back several years during which it “has invested and aspired to be a life science player.”
 
Today, the company has about a 5 percent share of the total life science market, or $700 million. Of that, Roelofs said, the vast majority of Agilent’s life science revenues, $600 million, come from the for-profit sector, primarily pharmaceutical firms and biotechnology companies. By contrast, revenue generated by the company’s non-profit accounts — academics and government customers — is about $100 million.
 
“We have an opportunity with new technologies to penetrate into an area where we are deployed in but not focused on, and into an area where we can establish ourselves in the real life science statement with our technologies while maintaining our statement in pharma,” Roelofs said during the conference.
 
Pharma’s Biological Imperative
 
Agilent’s newfound interest in the non-profit sector is rooted in what it sees as pharma’s ever-growing interest in therapies developed from biological entities. According to Roelofs, five years ago, 13 percent of new drugs in the pipeline were based on biological entities. This year, that figure will double. By 2010 the amount of research and development dollars spent by pharma on new biological entities will exceed R&D spending on new chemical entities, he said.
 
“That tells me that 50 percent of the R&D dollars are going into biological entities in less than a five-year horizon,” Roelofs said. Driving the surge in biological entities is research being conducted by universities and government institutions, he said.
 
“If pharma is going to get the majority of its discoveries and new biological entities out of academic and government institutes over the next five years, because their business models are changing, and if we can successfully enter and penetrate and focus on those academic and government institutes with our technologies and tools and … provide the workflow solutions for these new analyses that will be the future therapeutics and diagnostics, then we can return to our traditional strength in pharma and maintain it,” Roelofs said.
 
Agilent plans to market research workflow technologies to academic and government customers so that when pharma in-licenses biological entities from these researchers, the products are already incorporated into their analytical measurement workflows or can be easily done so, Roelofs said.
 
“We have a broad portfolio for separation and detection technology,” he said. “We [possess] great technical quality and tremendous peripheral vision across the back half of that workflow … and we’re moving to create great technology and peripheral vision across the entire workflow.”
 
Agilent’s Chemical Romance
 
Despite its new focus on the academic sector, Agilent plans to continue growing its pharma business and supply the necessary tools and instruments for developing chemical entity-based therapies, Roelofs said. In particular, the company has ambitious goals for its HPLC chip originally launched in January 2005 [See PM 10/22/04]. Roelofs said the company is “really pushing forward with this chip-LC concept,” and that the product has the potential to “transform [and] restate the steel-tube column market.”
 

“We’ve got new technology opportunities, high end mass specs. We’re very focused, therefore, on functional proteomics — this is our mass spec and LC-MS. We’re really on top of that right now, growing wildly.”

That will have to wait until after the company has worked out all of its applications and figured out the right packing materials. Until then, he acknowledged, the chip’s potential won’t be met.
 
While the chip is gaining traction in the research community, it remains a small part of the company’s business. Roelofs said the company anticipates it will be another five years before it gains traction.
 
“So, it’s not going to be a huge revenue opportunity for a while,” he said.
 
Earlier this year, Roelofs told ProteoMonitorthat Agilent is targeting the LC market as a growth opportunity [See PM 03/08/07]. Last week, he told the audience that the company’s LC instruments have grown at a 12 percent clip this year, while column sales have grown 16 percent.
 
Asked about who the company sees as its biggest competitors, Roelofs said that in proteomics, genomic measurement, and molecule fragmentation and pharma measurement, Agilent considers Applied Biosystems to be its leading rival. Agilent has been working to upgrade its triple-quadrupole and Q-TOF mass specs to increase their mass range, and is starting to eat away at ABI’s market share in the mass spec market, according to Roelofs.
 
Agilent’s lead competitor in pharmaceutical accounts is Waters, he said. In emerging markets such as India, China, and Eastern Europe, “I would not be surprised to say that we are taking some market share there and it could be that their local folks and local sensing mechanisms are picking it up,” Roelofs said.

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