In a conference call announcing the results of its first quarter as a fully merged company, Bruker Biosciences reported tough times in x-ray crystallography amid booming mass spec sales.
“Q3 was quite a challenge on the X-ray side,” Bruker’s senior vice president, Martin Haase, said during the call. While revenue for Bruker Daltonics increased 22 percent in the third quarter to $36.4 million from $29.7 million in 2002, revenue for AXS stayed flat at $26.8 million, compared with $26.9 million in the year-ago period. X-ray system sales, which represented 69 percent of AXS’ revenue in the first nine months of 2003, were to blame, according to Haase. “We have seen earlier this year — and affecting revenues — a softness in the biolog- ical crystallography market. The funding was weaker, but … we see an upswing toward the end of the year already,” he said. Mass spec sales from Bruker Daltonics, on the other hand, grew 30 percent and now represent 39 percent of Biosciences’ total sales. The company said it saw particular strength in life sciences mass spec sales, especially of MALDI TOF/TOF, ion trap, and hybrid Q-q-FTMS systems.
Haase said he anticipated momentum in X-ray systems with applications to life sciences to pick up in the US and Asia, but not in Europe, and noted that AXS is “looking to launch new products, and develop strategic collaborations to fuel our top line growth.” He pointed to the recently released X-ray source products with applications to structural proteomics — such as the Micro Star source — as well as AXS’ collaboration with Discovery Partners (see PM 8-1-03) as areas of growth potential.
Bruker AXS stands to gain from its incorporation into Biosciences, now that CEO Frank Laukien said it has “begun joint marketing and cross- selling of life science mass specs and X-ray products.” Bruker told investors at the UBS Global Life Sciences conference in September that it would combine products from Daltonics and AXS into an inte-grated package, with the AXS business as the “structural proteomics” arm of a complete proteomics tools system (See PM 9-26-03).
Whether a ride on Daltonics’ coattails will help the AXS arm remains to be seen. Despite Bruker’s claimed position as one of the two “dominant companies” on the x-ray crystallography market — the Japanese company Rigaku being the other — investors on the call expressed skepticism about the viability of X-ray crystallography as a structural proteomics mainstay. Haase, however, was adamant that the technology was key and was here to stay. “X-ray crystallography is and in the future will be essential to doing 3D structure determination. We see a trend toward more automated crystal structure determination,” he told the investors. Haase pointed toward the creation in April of the Canadian-UK Structural Genomics Consortium (see PM 4-14-03) as evidence that both the funds and the interest are there. “We saw $80 to $100 million in funding for structural proteomics initiatives [in Canada and the UK] which will continue to go into US proteomics as well,” Haase said. “The same is true for Japan — which historically was driven by NMR technology. There are indications that X-ray crystallography will become a more prominent part of structural proteomics in Japan as well.”
Bruker Biosciences reported revenues of $63 million for the third quarter ending Sept. 30, up over the $57 million reported for the year-ago quarter. The results reflected a charge of $6.4 million for the July 1 merger of Bruker Daltonics and Bruker AXS, and results from prior periods were merged into historical combined reports of the two companies. The company had a third-quarter net loss of $14.7 million, compared to a net income of $1.2 million for the year-ago quarter. Bruker reported R&D costs of $9.6 million for the quarter, compared to $7.7 million for the same quarter last year.
The company reported cash, cash equivalents, and short-term investments of $78 million for the quarter, as compared to $100 million for the year-ago period.
— KAM