Another Rough Year

Last year was a challenging year for analytical instrument makers in many respects. Slower industrial markets and the US government sequestration, which curtailed demand from government and academic markets, resulted in modest sales growth for many companies. Chinese sales growth slowed overall and, although Europe stabilized, sales growth was uneven. Some companies weathered the difficulties by curtailing costs, launching new products, growing business in new markets and expanding geographically. Nonetheless, companies such as FOSS (see IBO 2/15/13), Illumina (see IBO 10/31/13), Luminex (see IBO 8/15/13) and Roche (see IBO 10/31/13) adjusted to the changing market conditions by divesting product lines. Affymetrix (see IBO 1/15/13) and Roche (see IBO 4/30/13, IBO 10/31/13) were among the companies announcing reorganizations. Layoffs were initiated by Accelrys (see IBO 7/31/13), Harvard Bioscience (see IBO 12/15/13), Luminex (see IBO 8/15/13) and Sequenom (see IBO 9/30/13). Bruker (see IBO 11/30/13), Luminex (see IBO 9/15/13) and Tecan (see IBO 12/15/31) were among the companies lowering sales growth guidance for fiscal 2013. Cost savings programs were announced by Bruker (see IBO 11/30/13), PerkinElmer (see IBO 8/31/13) and Thermo Fisher Scientific (see IBO 11/30/13).

The Sequencing Boom

The next generation sequencing market maintained its robust growth in 2013, adding to the fortunes of Illumina and Life Technologies as well as fueling sales of associated consumables, sample preparation and informatics products. Although Roche will close its 454 Life Sciences sequencer business (see IBO 10/31/13), it announced plans to partner with Pacific Biosciences for clinical applications (see IBO 9/30/13). Clinical applications were also a focus for Illumina and Life, as their systems gained FDA approval (see IBO 4/15/13), and the companies expanded their diagnostics businesses. Funding poured into clinical sequencing informatics start-ups, while QIAGEN solidified its presence in sequencing informatics with two acquisitions (see IBO 4/30/13, 10/31/13). In addition, improvements in sample preparation benefitted laboratory automation and consumables providers.

Sequestration Blues

Although old news by now, as the fiscal 2015 US federal budget will not experience automatic cuts (see IBO 12/15/13), the lead-up to sequestration and the budget reductions (see IBO 3/15/13, 4/15/13, 11/15/13) were clearly felt by instrument companies in 2013. The impact was varied, but budget uncertainty at government labs and government-funded academic labs remained a challenge for many companies in 2013. Among the larger companies reporting that sequestration lowered sales growth were Agilent Technologies (see IBO 8/13/13), Illumina (see IBO 5/31/13) and PerkinElmer (see IBO 5/31/13).

Life Science Firms Raise Funds

Fundraising by developers of genomic technologies and other life science systems and consumables flourished this year, as did the IPO market. Nanostring Technologies (see IBO 6/30/13) and Cellular Dynamics (see IBO 7/31/13) each completed successful IPOs. Private companies, especially those involved in sequencing technologies, including RainDance Technologies (see IBO 7/31/13) and Oxford Nanopore Technologies (see IBO 12/15/13), also raised multimillions.