Abcam Gains on Asia Expansion

Fiscal 2015 sales for Abcam ending June 30 grew 12.6%, 14.2% excluding currency, to £144.0 million ($225.1 million = £0.64 = $1). Product revenue climbed 16.6% to account for 94% of sales. This growth was driven by new products, direct sales initiatives, geographic expansion in China and the acquisition of Firefly BioWorks (see IBO 1/31/15). Sales of RabMAb primary antibodies expanded 24.2%.

Non–primary antibody product sales grew 28.2% excluding currency, led by demand for kits and assays, which jumped 33.0%. Currency-neutral sales in China and the Rest of Asia Pacific soared 75.7% and 19.8%, respectively. Sales in EMEA (Europe, the Middle East and Africa), the Americas and Japan grew 13.8%, 11.7% and 10.4% excluding currency, respectively. Adjusted operating income rose 5.6% to £49.2 million ($76.9 million).

Sample Prep Demand Leads Biotage Growth

Second quarter sales for Biotage climbed 23.0% to SEK 148.1 million ($17.6 million = SEK 8.42 = $1). Excluding currency, organic sales advanced 4%, led by demand for sample preparation products, especially for therapeutics and clinical testing. Demand for the Extrahera system continued to be sturdy as a result of a promotional program. Increased sales to the petrochemical markets also contributed to organic growth. Purification sales were partially hindered by lower demand for peptide synthesis products. Overall, demand from contract manufacturers was strong, while distribution sales were lower than expected due to weakness in APAC and EMEA.

Instrument and aftermarket sales accounted for 45% and 55% of revenues, respectively. Demand in China continued to be strong, and sales in Europe and Japan expanded following a challenging first quarter. Conversely, organic sales in the Americas declined. Gross profit margin soared 250 basis points to 57.0% primarily due to currency but also improved manufacturing efficiencies. Adjusted operating profit jumped 84.0% to SEK 19.8 million ($2.4 million) because of currency and restricted spending.

Recovered Academic Markets Lift Bio-Techne Growth

For the fiscal fourth quarter, revenue for Bio-Techne’s Biotechnology segment rose 8.6%, 7% organically, to $83.3 million. Acquisitions added 7% to segment growth, while currency reduced sales by 5%. Organic growth reached its highest levels in several years, as sales of antibodies, which were positive for the first time in nearly two years, grew in the mid-single digits. Sales of protein and assay products each grew in the mid-single digits organically.

Segment sales in North America expanded in the high single digits organically, including roughly 10% sales growth from biopharmaceutical customers. In addition, sales from academic and government markets in North America, which declined over the past several years, grew in the mid-single digits due to the distribution partnership with Fisher Scientific (see IBO 2/28/14). European sales grew in the mid-single digits organically with most countries recording positive organic growth, while German sales declined in the low single digits. Sales in China climbed 35% organically. Japan remained soft, while sales to the rest of the Pacific Rim region grew roughly 10% organically. Biotechnology adjusted operating profit declined 2.0% to $43.7 million due to currency and product mix following acquisitions. Fiscal 2015 Biotechnology sales grew 8.4%, 3% organically, to $325.9 million, and adjusted operating profit improved 1.8% to $171.1 million.

Fiscal fourth quarter revenue for Bio-Techne Protein Platforms amounted to $17.2 million. Operating profits were at breakeven. On a pro forma basis, including ProteinSimple and CyVek in both the 2015 and 2014 quarters, segment organic sales declined 2% due to a strong comparison and disruptions from the integration of CyVek. The firm shipped a record number of Simple Western systems.

For the fiscal year, segment sales were $66.2 million and operating profit was $4.5 million. Pro forma sales advanced 22% organically and are projected to see similar growth for 2016 and beyond. Bio-Techne set a future revenue growth target range of 8%–12%, or mid-single digit growth organically.

Sequential Gains for FEI

FEI second quarter sales contracted 5.4% to $224.2 million. Excluding currency headwinds of 5.6% and acquisition growth of 0.4%, organic sales slipped 0.1%. Including currency, FEI sales in Asia-Pacific/Rest of World, US/Canada and Europe fell 2.0%, 5.1% and 10.7% to account for 41%, 34% and 25%, respectively. Bookings improved 1.5% organically to $251.6 million. With significant operations in Europe, favorable currency impacted margins and operating expenses. Gross margin expanded 365 basis points to 50.0%. Adjusted operating profit jumped 38.9% to $45.9 million but also benefited from completed restructuring measures. FEI maintained its full-year 2015 organic revenue growth outlook of 4%–7%. Currency is projected to negatively impact 2015 sales by 5%. Third quarter revenues are expected to fall 1%–6% to $215–$225 million, or between a 1.0% decline to 3.5% growth organically.

Industry revenue declined 5.2% organically to account for 53% of revenues due to weak demand from semiconductor, and oil and gas customers. However, regional sales to semiconductor customers reached their highest levels over the last four years. Bookings for the Industry segment expanded 5.6% organically to $112.7 million. Orders from oil and gas markets, which remain a small portion of Industry orders, drastically improved from the first quarter. Industry gross margin expanded 377 basis points to 54.1%.

Within the Science segment, sales grew 5.7% organically to make up 47% of sales, led by demand for high-resolution systems and increased service revenue. Segment sales were strong in North America but slow in Europe and Asia. Despite an organic decline of 1.7%, Science orders were sharply higher than the first quarter. Bookings, especially from materials science customers in emerging markets and certain European regions, continued to be impacted by competitive pricing due to currency fluctuations as well as macroeconomic uncertainty. Conversely, orders in China and the US expanded. The company also reported record orders from life science customers due to broader adoption of cryo-electron microscopy. As a result, orders for Titan Krios and Talos Arctica systems reached their highest levels, led by demand from structural biology customers in the US, Europe and Japan. Science gross margin jumped 357 basis points to 45.3%.

Fluidigm Reduced Guidance…Again

Fluidigm missed company expectations for the second consecutive quarter (see IBO 9/30/15) due to continued weak sales to production genomics customers and lower sales of single-cell genomics instruments. The company also misguided demand for new products. On the positive side, sales of single-cell biology products grew roughly 20%, led by demand from proteomics markets. Overall, Product revenue grew 3.9%, 10.8% excluding currency, to $28.6 million. This growth was driven by instrument sales, which rose 21.9% excluding currency to account for 61% of revenues. CyTOF sales were strong, but benefited from the new Helios platform and delayed orders in the first quarter. Conversely, placements of Biomark HD and C1 systems declined.

Consumables sales fell 3.2% excluding currency to make up 39% of revenues. In spite of stronger demand for single-cell biology consumables, growth was negatively impacted by slower pull-through orders from production genomics customers. Products sales in the US were flat, while sales in Europe, Japan and Other climbed 19.7%, 161.2% and 107.1%, respectively. However, Asia Pacific sales slumped 39.7% due to a strong comparison and lower core genomics instrument sales. Adjusted Product gross margin fell 650 basis points to 68.8% due to lower production volume, higher instrument manufacturing costs and product mix. License revenue was negligible.

Adjusted operating loss widened 24.1% to $11.6 million due to weaker margins and increased headcount. Despite operational measures to address challenges and bolster production genomics revenue, the company lowered its 2015 revenue outlook from $133–$143 million to $110–$115 million. This represents a reported revenue decline of 3% at the midpoint of the forecast, or growth of roughly 1% excluding currency. Fluidigm expects continued pressure on demand for BioMark and C1, and minimal contributions from new products for the year.

Milestone Payments Augment Pac Bio Sales

Second quarter sales for Pacific Biosciences soared 118.3% to $24.9 million. Growth was driven by Contractual revenue, which grew over sevenfold to $13.6 million, including $10.0 million in milestone payments and $3.6 million of amortized revenue from Roche. Excluding Contractual revenue, sales advanced 16.6% to $11.3 million. Instrument sales declined 8% to make up 49% of Product revenue because of timing of installations. Consumables sales climbed 48% due to higher utilization rates, especially for plant and animal genomics applications, which accounted for roughly half of consumables usage over the past year.

Operating loss narrowed 37.9% to $11.4 million due to the milestone payments. However, operating expenses expanded as the firm’s headcount grew 10% year over year. The company raised its 2015 revenue growth outlook from a minimum of 25% to at least 40% due to timing of additional Roche milestone payments as well as strong Product revenue.