A majority of large publicly held instrument and lab product companies maintained positive growth momentum in the first quarter due to sustained demand from biopharmaceutical markets, as well as strong life science and applied spending in China. Favorable pricing along with reduced currency headwinds further contributed to growth.

As a result, combined calendar year first quarter sales for the 18 companies or business units in the Life Science and Analytical Instrument Indexes (LSA Index) (see page 9) grew 5.2% excluding acquisitions, or 6.8% organically. This represents the fastest first quarter organic growth for the combined businesses since 2010. However, growth benefited from extra selling days and timing of revenues for a number of companies. In addition, industrial markets remained challenged, while academic and government sales were mostly muted. Quarterly estimates were calculated for Tecan and Oxford Instruments, whose results were not yet announced before this issue’s publication. Further financial reviews of the companies can be found on pages 9–11 and in the May 15 issue of IBO.

Biopharmaceutical demand, which expanded in the 10% range for the LSA Index, continued to drive growth for instrument and lab product businesses in the first quarter. Agilent Technologies, Merck KGaA Life Science (Merck LS), Thermo Fisher Scientific and VWR each recorded biopharmaceutical sales growth at or above double digits. Agilent recorded the strongest growth for this market as sales climbed 14%, led by new products and technology upgrades. Demand was broad based across pharmaceutical customers, including equally strong interest for QA/QC and R&D applications.

Thermo Scientific’s biopharmaceutical sales climbed roughly 13%, with particular strength within the bioprocess, bioproduction and biopharma services businesses. However, growth also benefited from extra selling days. Waters maintained healthy demand from specialty pharma, CROs and generics customers as pharmaceutical sales grew 9%, including double-digit growth in the US and Asia. In addition, Bio-Techne’s Biotechnology segment recorded roughly 10% sales growth from biopharmaceutical markets, led by US growth in the mid-teens.

Applied markets were mostly healthy, especially for food and environmental products, which grew roughly in the mid- to high single digit range for the LSA Index. Driven by demand in China, food, and environmental and forensics sales for Agilent grew 25% and 6%, respectively. PerkinElmer also experienced strength in China, primarily for food, air and water testing products, for which combined sales advanced in the upper single digits. Thermo Scientific recorded low single-digit sales growth from applied customers. Bruker continued to benefit from increased demand for NMR food screening applications. In addition, clinical markets contributed to growth for Bruker BioSpin, Illumina and PerkinElmer.

Academic and government markets mirrored results experienced in the previous quarter, as overall demand for the LSA Index grew in the low single digits. Lower government spending in Japan as well as mixed results in Europe hampered growth in the first quarter. Academic and government sales declined 1% for Waters, were flat for PerkinElmer and grew a modest 1% for VWR. Furthermore, academic sales declined for Bruker Nano Group and were flat for Bio-Techne’s Biotechnology segment.

In contrast, Agilent reported 7% academic and government sales growth, led by strength in its genomics business in the US and China. Thermo Scientific sales for this market advanced 3% on a normalized basis and was one of the early beneficiaries of increased NIH funding in the US.

Industrial markets continued to dampen organic top line growth, as Bruker Nano Group, PerkinElmer and Thermo Analytical Technologies all reported weakness. Agilent experienced a worse-than-expected impact from the refining sector, which led to a 3% decline in chemical and energy sales. Conversely, industrial sales for VWR improved roughly 5%.

China was a hotspot for a number of companies, as LSA Index sales grew in the double digits. Agilent, Merck LS, PerkinElmer, Thermo Scientific and Waters each reported double-digit growth in China. India was similarly strong for most firms. Bruker and Illumina also reported strength in China. US and European sales were mostly positive; however, Bruker and Illumina recorded lower spending in Europe. Japanese sales remained weak for most companies, with the exception of Waters for which sales grew 8% due to strong biopharmaceutical demand. In addition, Thermo Scientific and PerkinElmer detailed weakness in Russia and Brazil, while Merck LS reported lower demand in Singapore.

Life Science Index Sales

First quarter IBO Life Science Index sales advanced 7.2% excluding acquisitions, 8.8% organically, to $3,332 million. Growth was driven by biopharmaceutical demand, including strong bioproduction sales for Thermo Scientific LSS and Merck LS. NGS sales were also healthy but slowed for Illumina due to a strong comparison. Adjusted operating margin for Index companies declined 80 basis points to 23.9% due to increased investments by Illumina and Fluidigm.

Analytical Instrument Index Sales

First quarter sales for the IBO Analytical Instrument Index grew 3.3% excluding acquisitions, 5.0% organically, to $3,705 million. Biopharmaceutical markets as well as higher sales for food and environmental applications boosted Index growth. By product, sales of LC and LC/MS maintained strength due to technology upgrades and new products. Adjusted operating margin for the Index expanded 60 basis points to 17.7%, driven by restructuring activity and cost control measures.