Fourth-quarter 2008 IBO Life Science Index sales rose 1.7% to $2,416 million, while operating profits improved 1.3% to $435 million, and operating margins declined 10 basis points to 18.0% of revenues. For the year, Life Science Index sales grew 9.2% to $9,422 million. Operating profit climbed 15.6% to $1,556 million, and operating margins improved 90 basis points to 16.5% of sales.

Fiscal first-quarter revenue for Becton Dickinson’s BD Biosciences unit grew 10.5% to $302.5 million to make up 17.5% of company sales. Currency transactions contributed 1% to revenue growth, while organic growth benefited from strong sales of the FACS Aria II cell sorter. Cell Analysis and Discovery Labware sales rose 14.9% and 1.8% to make up 68% and 32% of Biosciences’ revenues, respectively. Within Labware, demand for fluid handling and ADME/Tox products increased. US sales gained 10.4% to account for 37.6% of segment sales, while international sales improved 10.6% to represent 62.4%. Operating income grew 26.7% to $99.7 million. The company expects fiscal 2009 revenue to grow 6%–7%, including a 2%–3% decline from currency transactions.

Fourth-quarter pro-forma sales for Biotage AB climbed 6.5% to SEK 143.2 million ($18.4 million = SEK 7.80 = $1) from SEK 134.5 million ($21.0 million = SEK 6.42 = $1) (see page 12). Sales declined 7% at constant exchange rates and 12% in reported US dollars. On October 2, the company divested its Biosystems business to QIAGEN (see IBO 10/15/08), but continues to distribute these products. Operating profit grew 24.8% to SEK 19.1 million ($2.4 million), while gross margins fell nearly 15 percentage points to 44.8% of sales. Discovery Chemistry sales improved 1.5%, 8% on a currency-neutral basis, to SEK 109.0 ($14.0 million), led by demand for sample preparation and evaporation products. Consumables and SNAP products also contributed to revenue growth. Segment operating profit jumped 86.3% to SEK 13.6 million ($1.7 million). Gross margins were unchanged at 57.4% of sales. Europe and the US accounted for 45% and 38% of sales, reflecting an increase of 4% and decrease of 4%, respectively, while Rest of the World sales were unchanged.

Sales for the Biosystems segment, which was listed as discontinued operations, increased 26.1% to SEK 34.2 million ($4.4 million). Operating income fell 31.2% to SEK 5.5 million ($0.7 million) due to lower gross margins of 4.8% from distribution proceeds. The US accounted for 47% of sales. The percentage of sales to Europe declined 500 basis points to make up 45% of sales, while the percentage of sales to Rest of the World improved 500 basis points to 8%.

Pro-forma year-end Biotage AB sales improved 0.3% to SEK 497.8 million ($75.5 million = SEK 6.59= $1) from SEK 496.4 million ($73.4 million = SEK 6.76= $1), or an increase of 1% on a currency-neutral basis. Total operating profit rose 16.6% to SEK 50.0 million ($7.6 million), while gross margins declined 535 basis points to 56.2% of sales. Discovery Chemistry sales fell 3.1%, 11% on a currency-neutral basis, to SEK 385.3 ($58.5 million), while operating profit climbed 46.1% to SEK 24.4 million ($3.7 million). For the year, Biosystems revenue improved 13.9% to SEK 112.5 million ($17.1 million), while operating profit declined 2.3% to SEK 25.6 million ($3.9 million).

Caliper Life Sciences’ fourth-quarter revenues declined 8.8%, 2% organically, to $36.7 million (see page 12), primarily due to the effects of divestitures and nonrecurring license revenues. The company sold its Pharmaceutical Development and Quality and AutoTrace product lines on November 10 (see IBO 10/31/08 and page 8). Currency translation and divestiture lowered sales by 2.4% and 4.4%, respectively. Adjusted operating income narrowed to a loss of $1.5 million from a loss of $3.1 million a year ago. On a pro-forma basis, Caliper’s fourth-quarter revenues fell 4.3% to $34.6 million. Sales for Imaging, Research, and Caliper Discovery Alliances and Services (CDAS) fell 5.0%, 2.4% and 7.7% to represent 45%, 42% and 13% of pro-forma sales, respectively. Within Research, microfluidic revenue grew 15%, but was offset by lower automation sales. Imaging products were negatively impacted by budget constraints.

Full-year reported revenues declined 4.7% to $134.1 million, including an 8.0% shortfall from nonrecurring microfluidics license revenues. Adjusted operating loss was relatively unchanged at $13.7 million. Full-year pro-forma revenues, excluding the discontinued product lines and the imaging licensing revenue, grew 6.7% to $122.8 million, including 1% growth due to currency. Research and Imaging revenues climbed 6.0% and 14.1% to represent 47% and 37% of pro-forma sales, respectively, while CDAS revenue fell 5.6% to make up 16%. The company improved its cash position and available credit line, which totaled $35 million, compared to $15 million at the end of the third quarter. First-quarter revenues are expected to be flat at $25–$28 million for 3% organic growth. Full-year revenues are anticipated to grow 2%–5% to $122.8 million for 4%–7% growth organically. Organic revenues for the Research, Imaging and CDAS business units are forecasted to grow 4%, 10% and 4%, respectively.

Genetix’s year-end sales grew 14.5% to £26.2 million ($47.6 million = £0.55 = $1) from £22.9 million ($45.8 million = £0.50 = $1) (see page 12), including 3% growth from currency. Instrument and consumables sales rose 14% and 17% to account for 73% and 27% of revenues, respectively. Sales of clinical instruments and cell biology products rose 21% and 19% to £8.7 million ($15.8 million) and £7.7 million ($14.0 million), respectively, while sales of genomics-based instruments were flat at £3.6 million ($6.5 million). Recurring revenues improved 12% to £6.2 million ($11.3 million). Sales to the US, Europe (including the UK) and Rest of the World rose 12%, 18% and 12% to account for 47%, 40% and 13% of sales, respectively. Adjusted operating profit climbed 19.8% to £3.6 million ($6.6 million), and gross margins improved 200 basis points to 62.2% of sales.

For the year, Tecan’s revenues declined 4.4% to CHF 396.0 million ($366.7 million = CHF 1.08 = $1) from CHF 414.4 million ($345.3 million = CHF 1.20 = $1) (see page 12). In local currency, sales grew 1.0%. Adjusted operating profit slipped 0.4% to CHF 60.1 million ($55.6 million), while operating profit margin climbed 60 basis points to 15.2% of sales. Liquid Handling & Robotics revenue improved 1.1%, 7.0% in local currency, to 67.1% of sales, led by OEM, consumables and service revenues. Components & Detection revenue fell 12.0%, 6.1% on currency-neutral basis, to 25.4% of sales. Sample Management sales fell 20.2%, 18.8% in local currency, to 7.5% of sales. Sales to Europe, North America and Asia declined 0.7%, 5.2% and 16.8% to represent 47.4%, 37.1% and 11.8% of total sales, respectively. Sales to Other areas rose 4.5% to 3.7% of sales.

Graph: Quarterly Sales Performance January 2005–December 2008

Q1 Q2 Q3 Q4

2005 1730 1798 1721 1953

2006 1837 1875 1873 2120

2007 2018 2124 2106 2376

2008 2228 2442 2335 2416

Graph: Quarterly Operating Profit Margins January 2005–December 2008

Q1 Q2 Q3 Q4

2005 14.8% 14.6% 14.3% 17.2%

2006 14.5% 13.5% 12.8% 16.2%

2007 14.9% 14.2% 14.9% 18.1%

2008 16.2% 15.6% 16.3% 18.0%