2008 Company of the Year: Life Technologies

As a regular feature of our annual forecast issue, IBO selects a firm from our industry as “company of the year.” In designating the company of the year, IBO recognizes an analytical or life science instrument maker that has accomplished technical, operational and financial achievements. Such achievements are a function of strong financial performance, market leadership, innovative product introductions and key strategic investments.

IBO’s 2008 company of the year is Life Technologies, a name that does not instantly resonate, but one that is likely to dominate the industry this year, and for many years to come. Life Technologies is a new entity formed officially on November 21, 2008, as the result of the merger between Applied Biosystems and Invitrogen (see IBO 11/30/08), creating, in its words, a global leader in biotechnology reagents and systems. With combined annual revenues of about $3.5 billion, 9,500 employees, a presence in more than 100 countries, and an unmatched portfolio of patents and exclusive licenses, the company’s boast looks all too real.

Although Life Technologies has yet to report fourth-quarter financial results, both Applied Biosystems and Invitrogen have been among the leaders in profit growth for the first three quarters of 2008, with concomitant solid revenue growth. Despite the moderating market growth expected for the coming year or two years, Life Technologies looks to be well positioned to weather the storm as well as any major supplier.

Invitrogen is consumables oriented with minimal hardware or system offerings. However as the result of the addition of the portfolio of products and services from Applied Biosystems, the mix now includes instrumentation. Yet the combined company still has 75% of its revenues in consumables, a profitable and stable business in good times and not-so-good times.

Life Technologies has over 50% of its business in government and academia, which tend to be somewhat recession insensitive. All of this, of course, was not accidental, as the two companies saw the potential of the combined businesses and the synergies that existed. Likewise, the integration of the two businesses has proceeded in a genuine cooperative manner, benefiting from their combined capabilities while maintaining separate marketing identities.

Through a steady flow of innovative new products and initiatives, Life Technologies has staked out dominant positions in genomics, proteomics and cell analysis, the three fundamental areas in life science research. The company is also involved in molecular diagnostics, which offers even greater growth potential.

Over 50,000 of Life Technologies’ products, mostly reagents and kits, can be found in research facilities in different industries, especially biotech and pharmaceutical labs, in addition to life science labs in government and academia. While size may not be all it is cracked up to be, the global reach of the company and its breadth of products focused on growth segments makes it a formidable competitor with the potential to add even more capabilities in the years to come.

Chart: Life Technologies Est. Share of Rev.

Molecular Biology Systems 40%

Genetic Systems 25%

Cell Systems 20%

MS Systems 15%

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