Micromass has begun shipping reengineered Q-TOF mass spectrometers equipped with electrospray ionization sources, following its decision in late March to suspend delivery of its top-of-the-line Ultima series of Q-TOFs, the company said last week. While the resumption of shipments affects only the Q-TOF API electrospray instruments — not the Q-TOF Global and Q-TOF MALDI mass spectrometers — it beats Micromass’ original prediction of when it could resume shipping by more than a month.
Micromass’ Q-TOF travails stem from a jury’s decision in late March in the Federal District Court of Wilmington, Del., that held Micromass guilty of infringing on a patent co-owned by Applied Biosystems and MDS Sciex. The patent covered front-end ion tunnel technology used in Micromass’ high-end Q-TOF and triple quadrupole mass spectrometers. Although the judge in the case won’t issue his final rulings on the case until May, Waters, Micromass’ parent company, decided to withdraw its Q-TOF Ultima and Quattro Ultima series of spectrometers to avoid the appearance of “willful infringement,” the company said in March.
The resumption of shipments means customers who ordered Q-TOF API spectrometers will get them sooner than expected, but it won’t significantly dampen the negative impact on Waters’ balance sheet, company executives said in a conference call. In addition, researchers looking to purchase Q-TOF Global and Q-TOF MALDI instruments will still have to wait until at least June before Micromass begins shipping the modified instruments.
For the first quarter of 2002, Waters revenues were down slightly compared to the same quarter a year ago, and earnings per diluted common share dropped to 26 cents, from 28 cents for the first quarter of 2001. Waters attributed the decrease to currency effects, lost sales due to withdrawn Q-TOFs and triple quads, a provision of $2.8 million to cover patent litigation costs, and to a slight slowdown in big pharma spending on mass spectrometry.
Waters CEO Douglas Berthiaume said the decrease in revenue from big pharma, compared to previous quarters, was due primarily to customers delaying the launch of their large capital procurement programs, rather than a general indication of weak spending on the part of big pharma. The weaker spending primarily affected several million worth of “big ticket” mass spectrometry purchases, Berthiaume said, calling the drop in pharma spending “concerning.” Berthiaume added that he expected that trend to reverse, “but it’s hard to predict the timing.”
When asked whether customers who had initially expressed interest in purchasing the Q-TOF Ultima instruments had turned to competitor’s mass spectrometers, Berthiaume said he had no indication yet that customers had dropped their orders. “As far as we know, no one has placed competitive orders, but I would not be surprised if a few [did],” he said. “We haven’t seen that yet.”
— JSM