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Life Science Mass Spec Space Shows Strong Growth, High Activity in Q2

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NEW YORK (GenomeWeb) – Life sciences mass spec turned in a strong second quarter, even as the larger fortunes of individual vendors varied.

The quarter was also an active one for the space, with notable regulatory clearances and a number of new product launches at the American Society for Mass Spectrometry annual conference in June.

At Bruker, which this week posted flat Q2 results and lowered its revenue growth guidance to between 1 percent and 2 percent from a previous guidance of 3 percent to 4 percent, life sciences mass spec was a relative bright spot for the company, growing at low single digits in the quarter according to Bruker President and CEO Frank Laukien.

The company's MALDI Biotyper platform generated double-digit revenue growth in the quarter. The platform also received regulatory approval from both the Chinese FDA and the Brazilian government, Laukien noted on a conference call following release of the company's Q2 results, adding that Bruker "saw immediate order growth towards the end of the second quarter in China."

Waters, meanwhile, posted a 7 percent rise in Q2 revenues, driven significantly by "strong shipment volume to pharmaceutical end markets," said company Chairman, President, and CEO Douglas Berthiaume. The company's high-end UPLC-MS business – which includes much of the instrumentation used in life sciences research like proteomics – was up double digits in the US, he added.

Danaher's AB Sciex division likewise showed solid performance, growing at a high single-digit rate in the quarter.

Thermo Fisher Scientific didn't break out Q2 results for its mass spec business, but CFO Pete Wilver said on that company's earnings call that life sciences mass spec showed "very strong growth" in the quarter.

AB Sciex, Thermo Fisher, and Waters noted strong growth in the US academic and applied markets, a shift from the first quarter in which several vendors noted difficulties due to spending delays at US academic, government, and pharma customers. Waters' Berthiaume noted that the company anticipates growth in government-funded instrument sales in the second half of 2014 in the US.

Waters Vice President and CFO Gene Cassis noted that the company was beginning to see, in particular, an uptick in US academic demand for its high-end Synapt and QTOF instruments.

The company is also seeing "very strong interest out of academic medical centers for very large programs that anticipate investments in mass spectrometry," Berthiaume said.

China continued to be a challenge for most vendors. However, some noted that while revenue growth had been slow in the quarter, Chinese bookings had increased, offering optimism for better growth in the second half of the year.

"China bookings performance in the quarter was much stronger than revenue and was up in the high teens," Thermo Fisher's Wilver said, noting that as a result the company was "confident that revenue growth in China will be much stronger in the second half, resulting in high single-digit growth for the full-year."

Waters saw its China revenues decline by double digits in the quarter. However, Berthiaume said, "during the closing weeks of the quarter we began to see improving governmental orders, and by the close of the quarter we finished with a moderate increase in orders and a nice sequential pick-up in orders in comparison to the first quarter results."

The vendors also cited a number of new mass spec releases as future growth drivers. Instruments launched at ASMS in June include AB Sciex's TripleTOF 6600, Waters' Xevo G2-XS, Bruker's impact II QTOF, Agilent's 6495 triple quadrupole, and Thermo Fisher Scientific's Q Exactive HF.

The space has seen several launches in the weeks following the close of Q2, as well. Last week at the American Association for Clinical Chemistry annual meeting in Chicago AB Sciex and Thermo Fisher Scientific released new US Food and Drug Administration-listed Class I instruments, with AB Sciex announcing the impending launch of its 4500MD Triple Quad and 4500MD QTRAP mass spec systems and Thermo Fisher announcing a clinical LC-MS system consisting of its Prelude MD HPLC, Endura MD triple quadrupole, and ClinQuan MD software.

On Thermo Fisher's earnings call, Casper also noted the July release of the company's new Vanquish UHPLC system, with which the company is targeting the high-end research market.

"It's going after a large market where we have a presence, but we're not the industry leader, and we're targeted at gaining some market share there," he said. The instrument aims to compete with high-end LC systems like Agilent's 1200 Infinity series and Waters' Acquity line.

Waters and Danaher also announced on their calls recent acquisitions that could impact portions of the life sciences mass spec space – the microbial identification area, in particular.

Waters announced its $23 million acquisition of MediMass' rapid evaporative ionization mass spectrometry (REIMS) technology, which the company plans to explore as a potential approach for mass spec-based clinical microbiology after having failed roughly a decade ago to popularize MALDI MS-based microbial identification.

And Danaher announced its acquisition of Siemens' clinical microbiology division, which gives it assets that could prove useful were it to decide in the future to pursue mass spec-based microbiology within its AB Sciex business.

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