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JPM Conference Sheds Little Light on What Proteomics Vendors Have in Store for 2008

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At the JP Morgan Healthcare Conference held in San Francisco this week, the leading proteomic tool vendors were largely mum about their plans for the proteomics space, a departure from last year’s event, at which some companies made bold declarations about expanding their proteomics business by capturing greater market share or buying smaller shops [See PM 01/11/07].
 
Following is a brief synopsis of presentations that were webcast by some of the proteomic companies that presented at the meeting.
 
Agilent: Proteomics Growing Life Sciences
 
Agilent’s Bio-analytical measurement business had a banner year in fiscal 2007, which ended Oct. 31, as revenues grew 20 percent to just over $2 billion. And in the life sciences division — which houses the company’s proteomics business — revenues grew 24 percent to $835 million.
 
For fiscal 2008, life sciences is expected to grow 16 to 18 percent, said Nick Roelofs, vice president and general manager for life science solutions. Driving that growth will be the various “omics” applications, including proteomics, a space the company has aggressively pursued the past two years.
 
At last year’s JPMorgan Healthcare Conference, the company highlighted its goal to capture a greater share of instruments used in proteomics as part of its growth strategy. This week, while Agilent was more muted about how instruments fit into the company’s future, Roelofs made it clear that it has high hopes for its platforms, especially for its high-end mass spectrometers, a space the company entered two years ago [See PM 11/08/07].
 
“We have a strong push in high-end mass [spectrometry] … saw tremendous results in ’07, and expect to continue to see tremendous results in the high-end mass [spectrometry market],” Roelofs told attendees during his presentation.
 
The company also sees biologics as a substantial growth area, and will be pushing the instruments into that area of research, he said.
 
The company has been heavily leveraged in pharmaceutical and biotech business, but in 2008, it will continue its push into the academic markets. In September, during a meeting with analysts, Roelofs described the company’s plans to upgrade its stature in the academic/government sector [See PM 09/20/07]. This week, he reinforced Agilent’s commitment to that sector.
 
“Last year we told you that that was a huge opportunity, a place [where] we were unde-leveraged, and we are making real progress in that opportunity,” Roelofs said. “So our pharma business continues to be strong, [there’s] real growth there, but we’re focusing on accelerating our penetration into the academic sector.”
 
Waters: Synapt-ic Flashes and Proteomics Acquity
 
The future of Waters’ proteomics business is now largely built on its Acquity UPLC and Synapt mass spectrometer, and this week CEO Douglas Berthiaume reiterated that the company continues to see strong adoption of the platforms, as well as continuing improvement in its pharmaceutical business.
 
Waters introduced the Acquity nearly three years ago, and while the instrument lags the overall HPLC market — nearly a year ago a company official said Acquity installations is about 1 percent of the total HPLC installation base — the company has maintained that uptake of the system remains robust [See PM 03/01/07].
 
This week, Berthiaume told conference attendees that the Acquity represents the “most significant piece” of the company’s instrument portfolio “that has sustained our long-term growth rates.” The company has advanced the platform by improving the separation chemistry in the column.
 
“So Acquity has been very important to our performance. Again we continue to see very substantially higher growth rates in Acquity in the current time frame,” he said. “We’ve seen no significant diminishment in the uptake rate of our Acquity.”
 

“We haven’t been tempted by any life-changing acquisitions, and it’s not likely that we would be sorely tempted.”

On the mass spec front, the company has also moved ahead with several new instrument launches during the past two years, highlighted by the launch of Synapt in 2006. The instrument, Berthiaume said, has done “extraordinarily well and we have very high hopes for it to continue to lead the way in this … defining area of high performance mass spectrometry.”
 
Through the first nine months of 2007, revenues rose 16 percent year over year to more than $1 billion. In addition to the performance of its instruments, Berthiaume attributed the improvement to further expansion in Asia, particularly India, China, and Korea, and strong sales in the US.
 
The latter, he said, was the result of an improving global pharmaceutical environment. While Waters has not been the lone beneficiary of an improving pharma picture [See PM 08/09/07], the company also worked to expand its reach in North America by developing new accounts, particularly in the US, Berthiaume said.
 
On mergers and acquisitions, Waters has taken a conservative approach with four acquisitions made during the past two years, including the purchase of Calorimetry Sciences in August. The company will continue its current strategy, Berthiaume said.
 
“We haven’t been tempted by any life-changing acquisitions, and it’s not likely that we would be sorely tempted,” he said.
 
Invitrogen: Snaring Sales on the Web
 
After rebounding from a difficult 2006, Invitrogen will look to further build out its Web presence and continue to focus its business around reagents, according to CEO Greg Lucier.
 
2007 represented a turnaround year for Invitrogen after posting a $191 million loss the year before. Much of the past year was spent integrating prior acquisitions, installing a new enterprise resource-planning system, and implementing new management and benefits and commissions structures.
 
According to Lucier, the company will be launching a new website in late February and spend the rest of the year improving its website to increase traffic. The number of visits to its site has increased to 9.2 million in 2007 from 3.5 million in 2004. Currently about 56 percent of Invitrogen’s North American business is done online, up from 34 percent in 2003.
 
“And we think there’s really a great opportunity for the rest of the world to bring that up to the North American standard,” Lucier said.
 
The focus of Invitrogen has always been around reagents and that will not change, Lucier said, because that is the highest margin segment. In 2006, the company launched 1,400 new products and last year had 1,350 new product introductions. Going ahead, Lucier said, that figure will decrease.
 
“But each introduction is going to be much bigger in revenue potential, and that’s really what we’re trying to do with the business,” he said.
 
Applied Biosystems: Split from Applera Imminent?
 
Mark Stevenson, the newly appointed president of Applied Biosystems, had little to say about the company’s plan in proteomics except to say it expects to continue moving into that area, particularly in the area of protein biomarkers.
 
Concerning parent company Applera’s exploration of possibly splitting ABI and Celera into two firms with independent stocks, Stevenson reiterated that that plan is the one preferred by Applera’s board though no decision had been yet made.
 
If Applera is to split the two companies, an announcement could come by as early as the end of the current quarter with the completion of the split done by June 30, the end of its fiscal 2008, Stevenson said.
 
During the summer, Applera hired Morgan Stanley to explore alternatives to its current tracking stock structure [See PM 08/09/07].

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