With a new sales and marketing initiative and expansions beyond its core North American market, Eksigent’s top executive sees black in the company’s future.
Two weeks ago, the Dublin, Calif.-based liquid chromatography company announced it has hired Oslo, Norway-based Houm to distribute Eksigent’s NanoLC HPLC product line in that country. The alliance is the most recent in a string of similar deals Eksigent has forged in recent months in Asia, Europe, and Australia.
Eksigent has been a quiet presence in the liquid chromatography market, overshadowed by industry leaders Waters and Agilent Technologies as well as mid-sized LC firms such as Dionex.
But in the year since David Weber took over as the company’s president and CEO, Eksigent has aggressively moved to expand its geographic market and to build its customer base.
Since its founding in May 2000, Eksigent has never seen a profit. But in an interview with ProteoMonitor last week, Weber said that the company may emerge from the red within a year.
“We have a firm financial plan in place that will take us to profitability toward the end of this year or beginning of next year,” Weber said. “The main focus of that is growing the top line.”
The man focus of that line is the company’s NanoLC product line for high-resolution peptide separation. According to Weber, the brunt of Eksigent’s research and development efforts are directed at further improving that technology. Weber also hinted that the company may be looking at mergers and acquisitions to expand its portfolio and business.
Leading the way in the company’s long march toward profitability are its efforts to grow its overseas business. Before Weber’s arrival, Eksigent had focused primarily on building up its North American operations.
“They were a young company … and in terms of proteomics, North America is the leading market in terms of technology, in terms of the presence of opinion leaders,” Weber said of the company’s early focus. “And in that light, [creating a North American base] was the priority the company had chosen, probably rightly so.”
Since the start of 2007, though, the company has been on a tear forging partnerships around the world to build up an international user base. In addition to the Houm partnership, Eksigent has inked distribution and service deals for its NanoLC product line in South Korea, Australia, New Zealand, Sweden, Denmark, the Benelux region, and France.
By the end of the summer, Weber said, the company may be ready to announce distribution deals in China, India, and Japan.
Looking beyond its North American home base, however, is just one component of a new business strategy emphasizing the commercialization of Eksigent’s products. Like many start-ups, Eksigent spent its formative years paying more attention to developing its technology than on ways of profiting from it. But by the time Weber replaced Jeff Jensen as its top executive in April 2006, the company’s board had decided the time had come to ramp up the business side of its operations, Weber said.
Prior to joining Eksigent, Weber was vice president of global marketing and business development at Stratagene. He had also been President of the Americas at Amersham Biosciences. It was that sales and marketing experience that the board wanted.
“I think there came a point when Jeff and the board realized that they wanted to bring someone in, perhaps with a bit more commercial experience, sales, and marketing and commercial experience, in this particular industry,” Weber said.
In the past year, Weber said, Eksigent has doubled the size of its sales team, though he declined to elaborate. The company also created a new position, vice president of sales and service, to oversee its global sales and customer support, and grow Eksigent’s international distribution network. In September the firm named to that post Terry Salyer, formerly with Molecular Devices.
Last summer, the company also created the position of vice president of business development for medical devices, but has since eliminated the post. Meanwhile, Kevin Sayer, a consultant with extensive experience in the medical device industry, joined Eksigent’s board in February to help explore ways to grow that part of the company’s business.
The company’s core business continues to orbit its proteomics and protein-analysis technologies. And as the major mass spec vendors continue to report healthy sales growth, Weber sees that as good news for Eksigent.
Among the major vendors that disclosed their mass-spec sales during the most recent round of quarterly earnings results, Applied Biosystems reported a 12-percent increase, and Waters said LC-MS sales climbed 9 percent. Agilent did not disclose mass-spec sales but said demand for the instruments remains high. Meantime, Thermo Fisher Scientific said there was “strong demand” for its instruments.
“So to me that says there are tremendous opportunities,” Weber said. “Not all mass spec goes to proteomics, of course, but I think a considerable amount does, so I still see there are opportunities in proteomics.”
“Once you’re profitable, there are many more options open to you.”
Other companies see similar growth potential in the LC sector. Both Agilent and Thermo Fisher have said they would like to expand their LC operations [See PM 03/08/07 and 01/11/07], while Waters continues to hawk its Acquity UPLC as a next-generation technology that will eventually replace HPLCs as the instrument of choice in the research community [See PM 03/22/07].
In January 2006, Eksigent entered into an original equipment manufacturer agreement with ABI/MDS Sciex (now called MDS Analytical Technologies) to sell HPLCs based on Eksigent’s Microfluidic Flow Control technology. The instruments are sold under the Tempo name.
Weber said that while Eksigent has informal relationships with a number of mass spec vendors, “I don’t see us at this point entering into anything additional on a formal basis.”
However, with the major LC players signaling growth ambitions in that space, Eksigent could find itself drawing interest from larger firms looking to bulk up their portfolios. Eksigent has not been named as a takeover target by anyone — and has said it’s not interested in being acquired — but Agilent, Thermo Fisher, and Waters have said they are on the lookout for small to mid-sized acquisitions in 2007.
Eksigent, a small firm with complementary technologies and relatively low risks, fits the profile of the sort of firm that would appeal to them.
According to Peter McDonald, an analyst at American Technology Research, Eksigent is slowly gaining recognition in the LC space and could hold particular interest for larger companies looking for firms with specialized knowledge in proteomics technologies.
“It would fit well into a lot of these bigger players, any of the bigger instrument companies have been looking for these types of bolt-on acquisitions,” McDonald said. “They’ll have a base of technologies, and then they’ll want to add new tools to the tool box.”
Weber said, though, that for the moment, “Being acquired is not in our immediate plans. Our immediate plans are to drive this company to profitability.
“Once you’re profitable, there are many more options open to you,” he said.
On the other hand, he did not rule out the possibility that Eksigent may acquire another company. Especially in the LC consumables market, he said that the company is working on adding to its portfolio by bringing in players from the outside.
“What I’m trying to say is we’re not spending a lot of time and energy developing our own consumable line,” Weber said. “But there are products that other people carry, perhaps related to proteomics, among other areas, that may fit nicely with us, who might be looking for expansion of their own channels to market that we could perhaps bring into our own line.”