Third quarter 2007 IBO Life Science Index sales gained 12.4% to $2,098 million, compared to 8.5% in the same period last year. While favorable currency transactions contributed to overall Index growth, organic revenues sustained significant increases. Operating profit for the Index jumped 29.7% to $311 million and operating margin gained 200 basis points to 14.8% of sales. Life Science Index sales were led by strong demand for consumables and research services to the pharmaceutical and biotechnology markets, which boosted Sequenom’s revenues over 50%. Caliper Life Sciences also reported robust service revenue growth, but via acquisition. Biotage AB, the only company to report negative growth, had strong diagnostic revenues, but was adversely affected by the devaluation of the US dollar and increased competition. Of the 14 Index companies, Genetix and Tecan are the only two companies for which third quarter estimates have been used.

Becton Dickinson and Company’s BD Biosciences unit reported a 14.0% increase, or 11.3% currency-neutral increase, in fiscal fourth quarter sales to $284.9 million to make up 17.3% of total company sales. Immunocytometry Systems revenue grew 19.1%, Discovery Labware sales improved 7.7% and Pharmingen sales gained 6.3% to account for 59%, 26% and 15% of division sales, respectively. Favorable currency transactions contributed 3.1%, 2.1% and 2.5% to segment revenues, respectively. Organic revenue growth benefited from strong sales of research instruments, flow cytometry reagents and bioprocessing products across the company’s two major geographical markets. BD Biosciences’ US sales gained 13.6% to account for 44% of segment sales, while International sales grew 14.2% to represent 56% of segment sales.

Full-year revenues for BD Biosciences grew 12.8%, or 10.1% on a currency-neutral basis, to $1,033.9 million to account for 16.3% of total company sales. Immunocytometry Systems revenue jumped 17.0%, Discovery Labware sales climbed 8.5% and Pharmingen sales improved 6.3% to account for 57%, 27% and 16% of division sales, respectively. On a currency-neutral basis, segment revenues grew 13.8%, 6.6% and 4.1%, respectively. Organic revenue growth mirrored fourth quarter product sales, driven by strong demand for research analyzers and clinical reagents. BD Biosciences’ US sales grew 9.5%, while International sales improved 15.5% to make up 43% and 57% of segment sales, respectively. Adjusted operating income jumped 19.8% to $265.8 million due to a product mix of higher margin items. For fiscal 2008, BD Biosciences’ revenues are expected to increase 8%–9%.

Third quarter sales for Biotage AB fell 16.4% to SEK 111.9 million ($16.6 million = SEK 6.74= $1) from SEK 133.9 million ($18.5 million = SEK 7.24 = $1) (see page 12). At constant exchange rates, third quarter sales declined 12%, excluding the discontinued Chemical Division products. Operating profit dropped 18.4% to SEK 9.3 million ($1.4 million) from SEK 11.4 million ($1.6 million) in the prior year, yet gross margins edged 40 basis points higher to 63.9% of sales due to product mix changes. Discovery Chemistry sales declined 20.1%, or 14% at constant exchange rates, to SEK 89.1 million ($13.2 million). Sales were negatively impacted by weak demand for purification products by major pharmaceutical companies as well as by increased competition. Sales to the US improved 100 basis points to account for 42% of Discovery revenues, while European sales declined 200 basis points to make up 41%. Sales to all other countries grew 100 basis points to account for 17% of revenues. Operating profits for the segment fell 26.8% to SEK 9.3 million ($1.4 million) from SEK 12.7 million ($1.8 million), while gross margins improved 90 basis points to 62.4%. Biosystems sales grew 2.0%, or 4.0% at constant exchange rates, to SEK 22.8 million ($3.4 million), led by strong demand for diagnostic testing. Nineteen systems were sold during the quarter. European sales jumped 15 percentage points to account for 50% of segment sales, while sales to the US declined 15 percentage points to make up 47% of sales. Sales to all other countries traded flat to represent 3% of sales. Operating profit grew 10.7% to SEK 6.2 million ($0.9 million), but gross margins slipped 350 basis points to 69.9% of segment sales on account of the weakening US dollar. Following several quarters of declining revenues, the company’s Board of directors have agreed to evaluate strategic alternatives, including acquisitions, reorganization of ownership, and the sale of portions of the company or of the entire company.

Caliper Life Sciences’ third quarter sales grew 38.4% to $36.7 million, led by strong service and license revenue growth following the acquisition of Xenogen (see IBO 2/15/06). Product revenues were flat, but still accounted for 50% of total revenues. Sales of microfluidic instruments and consumables grew 49%. Molecular imaging revenue fell 26% due to lower sales to academic markets, while liquid handling and automation instrument sales declined 4%. Service revenue jumped 71.4% to account for 28% of total sales, benefiting primarily from demand for drug discovery and IVIS imaging system services. License fees and contract revenues improved 3.8% to make up 22% of revenues due to increased payments from molecular diagnostic and microfluidic license agreements. Adjusted operating income lost $0.1 million compared to a loss of $11.7 million last year, primarily due to increased service and license revenues. Gross margins on product revenue improved 8.4 percentage points to 39.1% as a result of lower manufacturing costs, while gross margins for service revenue increased 16 percentage points due to higher profits for screening-related contracts. For the fourth quarter, the company anticipates double-digit combined product and service revenue growth and total revenue growth of 7%–15% to $30–$35 million.

In the third quarter, Sequenom’s revenues grew 51.2% to $9.8 million, including consumable and other product–related revenue growth of 27.0% and 66.6% to account for 41% and 50% of total revenues, respectively. Sales of MassARRAY systems were stronger than anticipated with 14 new placements, bringing the total units sold to 40 for the first nine months of the year. MassARRAY consumables accounted for 41% of quarterly sales, which was a decline as a percentage of total revenues due to the adoption of the iPLEX assay. Revenues for contract research services jumped 152.9% to represent 9% to total sales, led by demand from the clinical analysis and academic research markets. Adjusted operating loss widened by 21.7% to $5.8 million primarily due to higher SG&A costs as a percentage of total sales. Gross margins slipped 40 basis points to 54.6% of sales due to lower margins on system hardware sales.