Second-quarter 2011 IBO Life Science Index sales grew 8.6%, 5.6% excluding currency, to $3,191.57 million. Operating profit improved 9.8% to $703.35 million, but operating margin declined 200 basis points to 20.8% of sales.

Fiscal third-quarter revenue for Becton Dickinson BD Biosciences division improved 9.3%, 4.3% excluding currency, to $337.9 million to make up 17% of company sales. Organic sales were primarily driven by strong demand for Cell Analysis (CA) instruments and reagents in Asia, Latin America and emerging territories. However, sales were negatively impacted by lower US consumables sales and delayed government research funding for high-end analyzer systems in Western Europe within the Discovery Labware (DL) unit. Sales were also offset by 3% due to stimulus spending in the US and Japan in 2010. CA revenue climbed 10.7%, 5.6% on a currency-neutral basis, to $255.0 million. CA sales to the US expanded 5.7% to represent 35% of segment sales, and International revenue improved 13.6%, or 5.5% at constant currency. DL revenue increased 5.3%, 0.6% on a currency-neutral basis, to $82.9 million. DL sales to the US declined 7.6% to make up 44% of segment revenue, while International sales advanced 18.5%, 8.9% on a currency-neutral basis. Overall, US sales rose 1.4% to account for 37% of segment revenue, and International sales grew 14.6%, 6.2% on a currency-neutral basis, to make up 63%. Adjusted operating income grew 3.3% to $89.9 million. The company lowered its full-year BD Biosciences sales forecast by 100 basis points to 3.5%. Excluding stimulus funding from a year ago, sales are projected to grow 6.5%.

Biotage’s second-quarter revenues contracted 4.7%, 3% organically, to SEK 98.6 million ($15.8 million = SEK 6.26 = $1) (see page 12). Acquisitions contributed 11% to revenue growth, but currency reduced sales by 13%. US and European sales declined due to lower industrial and academic spending to account for 38% and 33% of sales, respectively. Sales to Japan and Rest of the World sustained good growth to represent 16% and 13% of sales, respectively. Operating profit slumped 77.0% to SEK 1.8 million ($0.3 million) primarily due to higher operating expenses as a result of acquisitions. Gross margin was flat at 58.7% of sales as favorable product mix offset currency effects.

Based on continuing operations, Caliper Life Sciences’ first-quarter sales jumped 36.7%, 23% organically, to $35.8 million. Acquisitions and currency added 10% and 4% to revenue growth, respectively. Imaging revenue grew 22.8% to make up 47% of sales, driven by strong demand for the acquired CRi tissue-imaging products. Despite a 16% increase in system shipments, in vivo imaging revenues were only marginally higher, as several academic customers were hindered by funding delays. Research revenue rose 51.8% to make up 48% of sales due to strong sales of microfluidic and automation instruments for next-generation sequencing, genomics and biotherapeutics applications. LabChip and Automation product lines grew 50.9% and 53.1% to account for 29% and 19% of company sales, respectively. LabChip sales also benefited from an expanded OEM business with Agilent Technologies, as well as from increased partnership and licensing agreements. Caliper’s Discovery Alliances and Services (CDAS) sales soared 81.5% to make up 5% of sales due to services rendered for the EPA ToxCost contract. Overall, revenues to the Americas and the Rest of the World made up 55% and 45% of sales, respectively. Adjusted operating profit jumped to $0.8 million from just above breakeven. Adjusted gross profit margin improved 123 basis points to 52.5% of sales. The company increased its 2011 revenue forecast by 5% to $146–$152 million for growth of 22%–27%, or 11%–15% organically. The forecast includes average revenue growth of 8% for the Imaging business, 28% for Microfluidics and 10% for Automation, and a decline of 2% for CDAS. Third-quarter sales are expected to grow an average of 16% to $33–$36 million, including contributions of 8% and 2% from acquisitions and currency, respectively.

Sequenom’s second-quarter revenues improved 16.8% to $13.3 million, but adjusted operating income widened by 21.8% to $21.0 million (see page 12). Gross profit margin soared nearly seven percentage points to 66.8% of sales due to product mix and the timing of diagnostic revenues. Molecular Diagnostics (MD) revenue jumped 260.6% to account for 12% of sales due to increased testing services for both cystic fibrosis and fetal Rhesus D genotyping. The company launched the RetnaGene AMD test for age-related macular degeneration during the second quarter. MD operating loss widened by 15.7% to $9.9 million as the company expanded its sales and administrative workforce in preparation for the introduction of the Materni T21 test. The noninvasive prenatal test to detect Trisomy 21 is expected to launch by the fourth quarter of 2011 or early in the first quarter of 2012, depending on the publication of a study. Sales for the Genetic Analysis segment grew 7.0% to represent 88% of revenue, led by higher consumables sales. Genetic Analysis operating profit climbed 56.2% to $3.8 million due to higher-margin system sales and increased consumables volume.

Tecan’s half-year sales from continuing operations grew 2.2%, 12.3% in local currency, to CHF 181.9 million ($209.0 = CHF 0.87 = $1). Orders increased 1.3%, 12.0% in local currency, to CHF 196.0 million ($225.3 million), including currency-neutral double-digit order growth for both the Partnering and Life Sciences (LS) businesses. Total operating profit fell 9.8% to CHF 20.8 million ($23.9) due to increased R&D expenses and currency effects. Gross profit was unchanged at 49.9%. European sales grew 11.5% in local currency to account for 51% of sales, including 106.3% growth in Switzerland. Sales to North America and Others grew 8.4% and 0.4% in local currency to make up 37% and 3% of revenues, respectively. Despite strong growth in China, Asian sales declined 6.2% in local currency to represent 9% of revenues as a result of lower Japanese sales. The company raised its full-year currency-neutral sales growth forecast from the mid single-digit range to the high single-digit range.

Revenue for Tecan’s Partnering business grew 1.0%, 5.7% in local currency, to make up 44% of sales. Excluding currency, demand for spare parts was strong, component sales were flat and instrument revenues were slightly lower due to a strong year-over-year comparison. Partnering operating profit rose 0.2% to CHF 23.4 million ($26.9 million). LS revenue grew 3.1%, 18.1% in local currency, to account for 56% of sales. Segment sales benefited from strong demand for liquid-handling products from biopharmaceutical and forensics customers in the US and Europe. Consumables and service revenues grew 13.7% in local currency to make up 32% of sales. Consumables sales alone grew 19.7% in local currency to represent 8% of sales. LS operating income declined 36.7% to CHF 2.4 million ($2.7 million).

 Column Graph: Quarterly Organic Sales Change

 January 2008—June 2011   

 Year     Q1     Q2      Q3     Q4

 2008   6.8%   9.2%    7.1%   2.7%

 2009   3.6%   0.9%    1.9%   5.8%

 2010   9.4%   8.6%    8.8%   6.3%

 2011   5.8%   5.6%

 Column Graph: Quarterly Operating Profit Margins

 January 2008—June 2011

 Year     Q1     Q2     Q3      Q4

 2007  16.1%  15.9%  16.9%   21.4%

 2008  18.2%  18.1%  18.8%   21.1%

 2009  19.1%  20.2%  21.4%   22.9%

 2010  22.1%  22.6%  22.3%   23.0%

 2011  22.1%  21.1%

 Life Science Index, Total              

                                   2008     2009     2010     2011    08/09   09/10   10/11

 Total Annual Revenues ($M)     $11,077  $11,268  $12,191    -----     1.7%    8.2%   -----

 Annual Oper. Profits ($M)       $2,105   $2,321   $2,673    -----    10.2%   15.1%   -----

 Annual Oper. Profits (%)         19.1%    21.0%    22.5%    -----    -----   -----   -----

 2nd Quarter Revenues ($M)       $2,821   $2,713   $2,939   $3,192    -3.8%    8.3%    8.6%

 2nd Quarter Oper. Profits ($M)    $507     $534     $640     $703     5.4%   20.0%    9.8%

 2nd Quarter Oper. Profits (%)    18.1%    20.2%    22.6%    21.1%    -----   -----   -----