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Agilent, Thermo to Grow Proteomics Play, as Bio-Rad Eyes Big Buy, ABI Touts Biomarkers

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This article has been updated from a previous version to correct the spelling of Nick Roelofs's name.
 
Agilent Technologies will renew its focus on instruments with proteomic applications and Thermo Fisher Scientific might make acquisitions in the liquid chromatography market, company officials told investors at the JP Morgan Healthcare Conference, held this week in San Francisco.
 
Meantime, a Bio-Rad official said the company will be looking to make a sizeable acquisition in 2007 after a tepid M&A performance last year, and Applied Biosystems said that proteomic biomarkers will be a key revenue driver for the next three years.
 
Agilent’s A-List
 
Agilent’s deeper push into proteomics follows a five-year, $1.4-billion makeover that transformed it into a pure-play measurement company from a company mostly known for its semiconductor business. Foremost in its growth strategy is greater emphasis on its multi-sector liquid chromatography/mass spectrometry instruments.
 
The company is now embarking on a four-point growth initiative that includes greater focus on its microarray business, its diagnostics platforms, and its informatics technology. But, most of all, Agilent will be moving to capture greater market share of instruments used for proteomics research, according to Nick Roelofs, Agilent’s general manager of life sciences.
 
In November, Agilent had hinted at its proteomics ambitions when officials gushed about its proteomics tools sales, in particular its newest mass spectrometry system. But Mark FitzGerald, an analyst at Bank of America Securities, wrote in a research note then that for Agilent to truly impress investors, the division housing its proteomics tool business, the Bio-Analytical division, “needs to increase as a percent of the [sales] mix.” [See PM 11/16/06]
 
According to Roelofs, the LC/MS market is worth around $1.4 billion with an annual growth rate of 7 to 9 percent. Agilent has an 8-percent share of that market, he said this week at the JP Morgan meeting.
 
Most of Agilent’s business so far has been in single-sector instrumentation. “But our big growth going forward will be from multi-sector instruments,” a new space for Agilent, Roelofs said. “So we’re now preparing to play in a much deeper element of the proteomic and metabolomic market with the ability to analyze proteins, do differential expression, and go far beyond the [identification of proteins],” he said.
 
In 2006, Agilent launched the triple-quadrupole LC/MS and the 6510 quadrupole time-of-flight LC/MS [See PM 03/16/06], both of which are expected to help the company fulfill those goals.
 
Thermo Heating Up
 
Meantime, Thermo Fisher CEO Marijn Dekkers told analysts at the conference that the company is still on the lookout for acquisitions, in particular in the LC market. “I would like to be stronger in chromatography,” said CEO Marijn Dekkers. “We’re not a market leader, and that’s not easily solved.”
 
Despite Thermo Fisher’s acquisition last month of LC sample-prep company Cohesive Technologies, Dekkers said the firm has yet to develop a customer base in the market. Dekkers hopes that Thermo’s Accela HPLC platform, introduced in 2006, will help the firm gain some market share, though he acknowledged that Waters and Agilent are the leaders in this market.
 
Even though Thermo Fisher is in the midst of integrating operations from the $10.6 billion merger between Thermo Electron and Fisher Scientific – and both Thermo and Fisher made several acquisitions in the year leading up to their combination — Dekkers said the firm is not backing off the M&A market. “All of the people who were running these businesses before are still running them,” so there has been little disruption, he said.
 

“So we’re now preparing to play in a much deeper element of the proteomic and metabolomic market with the ability to analyze proteins, do differential expression, and go far beyond the [identification of proteins].”

Dekkers reiterated that the life sciences and industrial tools industries remain very fragmented. “There are a lot of companies out there who want to be acquired,” he said.
 
Bio-Rad Thinks Big
 
Another firm with M&A ambitions is Bio-Rad, which may be looking to gobble up big fish in 2007. “We were lucky to make a few [buys] on the smaller side in ’06,” said Norman Schwartz, Bio-Rad president and CEO. He said the firm is evaluating some potentially larger deals, eyeing candidates in the range of $200 million in annual sales in both the life sciences research and diagnostics fields. But he cautioned that “there are very few large ones out there.”
 
Last year, the firm made two acquisitions aimed at expanding its proteomics portfolio. In March, Bio-Rad acquired ProteOptics, an Israel-based firm that developed an instrument for studying protein-protein interactions [See PM 03/02/06]. Bio-Rad followed that in August with the roughly $20 million acquisition of Ciphergen’s proteomics instrument business [See PM 08/17/06].
 
ABI’s Biomarker Focus
 
Finally, at ABI, interim CEO Tony White told investors at the conference that the company will focus on discovering, validating, and commercializing proteomic biomarkers, which he said will be a key revenue driver for ABI for the next three years.
 
 — Ed Winnick in San Francisco contributed to this article.

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