One of the reasons was that 2005 sales were going up against strong revenue numbers from 2003 and 2004.
A Freedonia industry report released last year shows that the demand for IVD products will continue to increase for the next four years, with a 6% or higher rise in demand expected annually. The market is expected to hit $18 billion by 2009, behind clinical chemistry reagents and instruments leading the IVD group. In our first look at the IVD industry, Medical Product Outsourcing presented the top 10 IVD revenue-producing companies; last year we extended the list to the top 15 companies, and this year we continue our showcase.
These top 15 companies continue to dominate the ever-growing IVD field and should maintain that monarch for the rest of the first decade of the 21st century. There is a good chance that the current top 15 companies will remain in this upper echelon until 2009. The current IVD market has the top seven companies producing 60% of the product demand.
Roche Diagnostics continues to be the top producer and has been in all four of our surveys. There is only one new company in our survey, Gen-Probe of San Diego, CA, which replaces private company Instrumentation Laboratory.
Just as in the past, we welcome feedback on the report and look forward to reporting the top IVD companies in 2006.
The MPO Staff
TOP IN-VITRO DIAGNOSTICS MANUFACTURERS
1. Roche Diagnostics $6.3 billion
2. Abbott Laboratories $3.8 billion
3. Bayer Diagnostics $2.5 billion
3. Becton, Dickinson and Co. $2.5 billion
5. Beckman Coulter $1.9 billion
6. Dade Behring $1.7 billion
7. Ortho-Clinical Diagnostics $1.4 billion
8. bioMérieux $1.2 billion
9. Sysmex $716 million
10. Bio-Rad $618 million
11. Arkray $470 million
12. Diagnostic Products $399 million
13. Olympus America $384 million
14. Cytyc $362 million
15. Gen-Probe $306 million
1. Roche Diagnostics
$6.3 Billion ($27B Total)
Franz Humer, CEO
Severin Schwan, CEO Roche Diagnostics
Erich Hunziker, CFO
Heiner Dreismann, head of business area, Roche Molecular Diagnostics
Burkhard Piper, head of business area, Roche Diabetes
Volker Pfahlert, head of business area, Roche Applied Science
NO. OF EMPLOYEES: 68,218
WORLD HEADQUARTERS: Basel, Switzerland
While Roche makes headlines with its pharmaceutical end (eg, Tamiflu), the diagnostic side continues to show steady numbers despite being hurt by a strong dollar.
The Indianapolis, IN-based division of the Basel, Switzerland-headquartered corporation took a hit by the strong dollar in 2005 as sales dropped 10%. In Swiss Francs, Roche Diagnostics realized a 5% rise in record sales.
Despite the currency problems, the company was—for the third consecutive year—Medical Product Outsourcing’s top revenue-producing IVD company globally.
With a weaker dollar and more robust revenue, the first quarter 2006 numbers were flat at $1.6 billion, while it increased 8% in Swiss Francs. The first part of 2006 was spurred by a double-digit rise in immunochemistry portfolio sales, along with new releases from Roche’s Accu-Chek line, sepsis test launches as well as its automated blood screening system cleared for marketing in Europe.
At the beginning of fiscal 2006, the company’s diagnostic division was going through a transition in the executive branch as Severin Schwan was promoted to CEO—replacing Heino von Prondzynski, who retired effective January 1. Schwan was formerly regional head of Asia-Pacific of Roche Diagnostics before heading the diagnostic division.
In 2005, the company launched more than 20 new products, many of which replaced older offerings in the division’s diabetes portfolio, while also expanding into new segments such as DNA sequencing.
While the dollars sales decrease, operating profits also dropped as the company was hurt by heavy price pressures in the market, start-up costs for new manufacturing facilities and new products and higher depreciation charges.
Roche Diagnostics encompasses five segments: Diabetes Care, Molecular Diagnostics, Centralized Diagnostics, Near Patient Testing and Applied Sciences. Both Diabetes Care and Centralized Diagnostics account for 70% of the revenues for the division, with both coming in with 35% each.
In the second half of 2005, the company added to its popular Accu-Chek product line with the Accu-Chek Compact Plus, a glucose monitoring system; Accu-Chek Aviva, the replacement for the Accu-Chek Advantage monitor; Accu-Chek Spirit, a menu-drive insulin pump; and the Accu-Chek Pocket Compass 3.0, software for mobile diabetes self-management.
However, the Accu-Chek line was riddled with recalls—four were filed with the FDA between July 2005 and March 2006.
This area continues to grow as automation expands for the many tasks that precede and follow actual testing in the laboratory. The Immunodiagnostics portfolio of products helped spur this segment with the increased placements of its Elecsys and E170 systems and the rising demand for its Elecsys proBNP assay, which was bolstered by more than 200 scientific papers. In addition, the segment was helped by the expansion of the agreement with PVT Probenverteiltechnik that covers pre-analytical automation.
Amid all these positives, the company did have a US recall of its Elecsyx Troponin T in January 2006, after it was found that a false negative result might be reported.
Roche Diagnostics controls 40% of the fastest growing market in in vitro diagnostics. The blood screening and virology areas helped Roche maintain that lead. This segment was given a boost from the opening in July 2005 of what the company calls the world’s largest manufacturing plant for PCR (polymerase chain reaction)-based products in Branchburg, NJ. After the FDA approved the AmpliChip CYP450 Test, a DNA microarray-based test for diagnostic use, three major laboratories in the United States began offering the test in 2005.
For 2006, the unit will be focusing on the EU launch and a regulatory filing in the United States for the automated Cobas s 201 modular blood screening system and the TaqScreen MPX test, which simultaneously detects HIV and hepatitis B and C viruses in donated blood. For the remaining half of 2006, the unit is hoping to restart sales of its insulin pumps in the United States, after the FDA placed an import alert on the product in 2003. The company is currently expecting to hear this year from the FDA about the inspection of the company’s Burgdorf, Switzerland plant, where the pumps are manufactured.
Near Patient Testing
This unit was bolstered by strong growth in the areas of cardiology, coagulation monitoring and blood gas/electrolytes. Coagulation monitoring products had a double-digit rise in sales, especially in the United States. A trial showing positive results from the company’s CoaguCheck S system helped boost results. The system, however, had a recall in November after it was found that breaking the glass ampoule without first taking precautions might result in an injury.
Roche Diagnostics also launched the Cardiac NT-proBNP test and is expected to help fiscal 2006 sales in the cardiology sector. Also, the company’s blood gas and electrolyte analyzers doubled in numbers compared to 2004.
The smallest unit of the five in the Roche Diagnostic system made a push in the fourth quarter of 2005 with its strongest sales after the launch during the year of several new products. The biggest offerings released last year were Genome Sequencer 20 and LightCycler 480. The Genome Sequencer 20 marks Roche’s entry into the sequencing research market and is the first results from an alliance with Branford, CN-based inventor, 454 Life Sciences.
2. Abbott Laboratories
$3.8 Billion ($22.3B Total)
Miles D. White, CEO and Chairman
Richard A. Gonzalez, President and COO, Medical Products Group
Joseph M. Nemmers, Jr., Senior VP, Diagnostics Operations
Edward L. Michael, VP, President, Molecular Diagnostics
Edward J. Fiorentino, Senior VP, Diabetes Care Operations
NO. OF EMPLOYEES: 59,735
WORLD HEADQUARTERS: Abbott Park, IL
Abbott Labs’ diagnostic division has righted its ship so much so that it boasted a 12% increase in revenues in 2005, with both domestic and international sales sporting double-digit jumps.
Helped by the revenue rise, earnings remained as strong as ever with a 32% jump to $495 million for Abbott Diagnostics. It might be tough to top those robust numbers in 2006, as first-quarter revenues were relatively flat at 3% (to $918 million) with most of the increases coming from the domestic side.
In addition, 2005 was the first full year of the diagnostics segment’s reorganization, in which the segment was separated into four separate divisions—immunoassay/hematology, diabetes care, molecular and point of care—to better focus on the commercial and scientific offerings in the industry.
Last year’s figures were bolstered by Abbott Diabetes Care, a manufacturer of glucose monitoring systems, which grew 35% and surpassed a billion dollars in sales, along with the Point of Care segment, a maker of hand-held diagnostic devices, which jumped 25% over 2004.
“Our balanced, broad-based businesses delivered strong results once again in 2005, in line with our expectations," said CEO Miles D. White.
Between 1999 and 2003 the Abbott Park, IL-based company was hindered by FDA restrictions—including the shutting down of its Lake County, IL plant—and the result was declining sales and profits.
A few years later, however, with the leash released by the FDA, the company has rebounded with aplomb. Last year, Abbott Diagnostics released 50 new offerings and is expected to top that number this year.
Fueling growth in the Diabetes Care segment was the FreeStyle Connect, a point-of-care glucose meter, and the company expects approval this year for its FreeStyle Navigator, a glucose monitoring system.
Also in the Diabetes Care segment, Abbott launched the AlphaTRAK Meter in February 2006. The company considers the AlphaTRAK Meter as the first complete blood glucose monitoring system designed for diabetic cats and dogs.
On the downside, Abbott had to recall several lots of its FreeStyle Flash Blood Glucose Monitoring System in 2005, after it was found that the system’s measuring units were inadvertently changing from mg/dL, the US standard, to mmol/L, the foreign standard. If the user were unaware of the change, misinterpretation of the test results could occur, potentially leading to hyperglycemia. The announcement was a Class I recall (the most severe of the three classes—it involves situations in which there is a reasonable probability that use of the product will cause serious injury or death).
The Point of Care unit was spurred by the brisk sales of the i-Stat hand-held analyzer, which features a broad test menu.
The immunoassay business released the Abbott Prism for blood banks across the United States. The launch followed the FDA approval of Prism HBCore, an assay used to screen blood donations for hepatitis B. Additional hepatitis screening tests for Abbott Prism are currently under FDA review.
Last year, the company launched the Architect c16000 and ci16200 as part of its immunoassay offerings, to provide greater throughput for the high-volume lab. Abbott also introduced Architect analyzers for ovarian and breast cancer tests as well as myoglobin, completing the Architect acute cardiac panel.
Another popular analyzer is AxSym. The AxSym metabolic panel is expected to be completed with the release of two metabolic assays and the expected approval this year of additional AxSym assays.
A successful release in Abbott’s hematology business was the Cell-Dyn Sapphire hematology system, an automated hematology instrument.
The new year started on the right foot as the company received 510(k) clearance from the FDA for its i-Stat Chem 8+ cartridge, a point-of-care diagnostic test used to quickly assess basic metabolic status of patients in emergency rooms, clinics, surgical suits and other critical care settings. Another i-Stat product, however, was the subject of a Class II recall in July 2005, the i-Stat Celite Act cartridge. The cause for the recall was the misidentification of Celite Act cartridge as a kaolin Act cartridge in the analyzer.
In the Molecular business, Abbott released several products in Europe, including an automated instrument for molecular testing based on real-time PCR (polymerase chain reaction) technology with infectious disease assays for HIV and hepatitis C.
3. Bayer Diagnostics
$2.5 Billion ($32B Total)
Werner Wenning, Chairman of Management board
Manfred Schneider, Chairman of Supervisory board
S. E. Peterson, President of Diabetes Care Division
Tony Bihl, President of Diagnostics Division
NO. OF EMPLOYEES: 93,700
WORLD HEADQUARTERS: Leverkusen, Germany
Like many of the foreign companies, Bayer’s revenue last year was significantly affected by the strong dollar.
Bayer Diagnostics saw a decrease of 7% in revenues, but if you take in account the revenues in euros, the Leverkusen, Germany-based company realized a 5% increase.
Despite the drop in dollars, Bayer Diagnostic withstood the currency exchange to post a 1% profit last year to $535 million.
The drop in dollar sales comes after the company had a double-digit rise in sales for 2004. The 2004 revenues were a big boost after two years of revenue reductions for Bayer Diagnostics. The parent company, Bayer AG, contains three subgroups—CropScience, Material Science and HealthCare—that experienced the first full year in 2005 of the company reorganization, which included the Diabetes Care and Diagnostics divisions.
“We gave this subgroup [diabetes and diagnostics] a new focus, and it fared outstandingly last year,” said Werner Wenning, chairman of the board.
For fiscal 2005, Diabetes Care and Diagnostics contributed 8% of the entire Bayer corporate revenues. Healthcare entails 34% of Bayer sales, the second highest next to MaterialScience.
But the currency woes might be changing. In the first quarter of 2006, Bayer Diagnostics and Diabetes Care rebounded with a 16% jump to $689 million in revenue for the period ending March 31. The strong first quarter was based on a weak quarter in 2005 and also the growth of the Ascensia Contour blood glucose monitoring system in North America as part of the diabetes sector. In the diagnostics division, sales were bolstered by the laboratory systems, also in North America.
The Ascensia line continues to fuel the Diabetes Care division and was the top selling line in the entire Bayer company for 2005. The Ascensia line moved up from third to first as the line had a 12% increase in euros (but dropped in dollars to a tune of 3%).
Spurring sales for the Diagnostics division in 2005 was the Advia Centaur line, which was buoyed by the launch in November 2005 of the Advia Centaur CP Immunoassay System. While not as popular as the Advia Centaur, the Rapidlab/Rapidpoint and Clinitek Urinanlysis lines were also some of the bestselling healthcare products for Bayer.
In terms of FDA approvals, the company received approval in June 2005 to market the automated hepatitis B assays, HBsAg (hepatitis B surface antigen) and HBsAg Confirmatory assays. The approval completed an automated panel for acute hepatitis testing.
Also, the Diagnostics Division received clearance on two new Troponin-I assays (Tnl-Ultra) in January.
In 2005, Bayer agreed to several collaborations including Abbott Park, IL-based Abbott Laboratories, Waltham, MA-based Inverness Medical Innovations, Atlanta, GA-based CIS Tech and Madison, WI-based EraGen Biosciences.
Bayer’s only major recall in the last 12 months was in April 2006. Several models of the RapidLab 1200 System were recalled after the stored data did not agree with the original results. It was a Class II recall.
In a move that could effect the Diagnostics and Diabetes Care divisions, parent company Bayer AG had made a $19.6 billion takeover move in March to purchase Schering AG, a pharmaceutical manufacturer based in Berlin, Germany.
In the courts, Bayer HealthCare settled a lawsuit in February with Madison, WI-based Third Wave Technologies, a molecular diagnostics manufacturer, over patents related to hepatitis C virus. The terms of the settlement were not disclosed.
3. Becton, Dickinson & Co.
$2.5 Billion ($5.4B Total)
Edward Ludwig, Chairman, President and CEO
David Durack, VP, Corporate Medical Affairs
Vincent Forlenza, President, BD Biosciences
William Kozy, President BD Diagnostics
NO. OF EMPLOYEES: 25,600
WORLD HEADQUARTERS: Franklin Lakes, NJ
It was a nice 9% jump in sales for Becton Dickinson’s IVD segment in 2005 that also continued a trend in becoming a bigger part of the Franklin Lakes, NJ-based medical company.
With the help of acquisitions and new products, IVD sales have almost caught up with the company’s higher profile medical device segment.
The combined Diagnostics and Biosciences divisions made up 46% of all of Becton Dickinson’s total revenues in 2006, a couple more percentage points than in 2004 and 2003. For the first six months of fiscal 2006 ending on March 31, the sector was still at 45% of total company revenues and had risen 8% compared with the first six months of 2005.
In February, the company acquired San Diego, CA-based GeneOhm Sciences. While the company only made $5 million in revenues in 2005, GeneOhm Sciences’ main business is molecular diagnostics testing, one of the major growing areas in the IVD market.
In 2005, the Biosciences division raised double digits, 11%, to $800 million, with increases generated from sales of its instrument platforms, including the BD FACSCanto flow cytometer along with the BD LSRII bench top research analyzer. The company generated more revenue from instruments and reagents used to monitor CD4 levels, an important indicator of the effectiveness of HIV/AIDS therapy. The sector also realized a full year of sales after the acquisition of Atto Bioscience, which propelled the company into a new market, cell imaging. But in 2006, the division will be without a full-year realization of revenues of Clontech, which was sold to Takara Bio of Otsu, Japan, for $60 million at the end of August 2005.
Highlighted by the launch of the Vacutainer Push Button Blood Collection Set, sales of safety-engineered products that increased 8% to $1.7 billion fueled the success of the Diagnostics division. The safety-engineered products were especially vibrant internationally, with a 37% rise, while also increasing 11% in the United States. For 2006, the company rolled out the Viper ER System for in vitro infectious disease molecular diagnostic testing to satisfy the growth in highly automated laboratory testing. The product automates the previously manual ProbeTec System.
The Vacutainer product line, however, suffered a setback in September 2005 when several lots were recalled after customer complaints surfaced that the needle had separated from the hub, resulting in blood exposure and/or dislocation of the needle. It was a Class II recall.
For the first six months of fiscal 2006, the Diagnostics and Biosciences sectors rose 8% to $1.3 billion as the Biosciences segment pulled in a 9% increase, with the primary growth drivers being US sales and the flow cytometry instrument and reagent line. On the Diagnostics side, the pre-analytical systems unit grew 11% to help the segment grow by 4%.
In addition to the recall of the BD Vacutainer line in the first quarter, Becton Dickinson was plagued by Class II recalls of its BD PhoenixSpec Calibrator Kit, BM PhoenixSpec Nephelometer, BBL GasPak Pouch System and the BBL GasPak CampyPouch System and various blood glucose meters. The announcement of the affected meters came in February 2006; these items are sold in the United States and Canada under the brand names of BD Logic, BD Latitude, Paradigm Link and The Link. According to BD, these meters may switch the glucose test result display from mg/dL to mmol/L in the United States and vice versa in Canada during battery installation or when it is dropped. The company said the inaccuracies are rare but could lead to a misinterpretation of test results.
5. Beckman Coulter
$1.9 Billion ($2.4B Total)
Scott Garrett, president and CEO
James Glover, VP and CFO
Elias Caro, President Biomedical Research
NO. OF EMPLOYEES: 10,417
WORLD HEADQUARTERS: Fullerton, CA
While overall sales were flat for Beckman Coulter last year, clinical diagnostic sales churned up another double-digit rise—despite the company moving to operating-type leases.
The diagnostic area fetched a 12% increase with the help of record-setting autochemistry placements, including the launches of the UniCel DxC 600 and DxC 800.
The company adopted a leasing policy change based on customer preference, from predominately sales-type leases, to operating-type leases.
CEO Scott Garrett said that he expects overall sales of the company that were flat in 2005 should rebound in the long term.
“This should further improve competitiveness, sales efficiency and product margins,” said Garrett, who became the company’s new CEO in February 2005.
There might be some financial problems brewing, however, since the company announced in May the delay of filing its first quarter 2006 Form 10Q. The company blamed the delay on the company’s board of directors investigating allegations by a former employee regarding obsolescence of about $25 million in inventory, accounting for returned equipment under lease and disclosure of causes for change in expenses.
Despite the problems, Beckman Coulter’s diagnostics area continues to bring home double-digit results helped by the immunoassay systems.
“Of particular interest is the fact that healthcare providers around the world are becoming increasingly aware of the benefits provided by diagnostic testing, which represents a significant opportunity for our company,” said Garrett.
Autochemistry unit placements set a record and were up 18% over the prior year. The UniCel DxC 600 and 800 platforms led the way, and about one third of these newly introduced chemistry systems displaced competitive installations. Placements of large hematology systems jumped 12% and placements of immunoassay analyzers maintained the strong pace established in 2004.
While immunoassay systems segment grew 11% in 2005, the company was expecting to grow more than 20% in 2006 with the increase in the installation of its UniCel DxI and Access immunoassay systems. The UniCel DxI 800 had a hiccup in March when the company issued a Class II recall after it was found that, under certain circumstances, the product may aspirate a sample from an incorrect rack and generate a result that is not flagged.
The segment was also bolstered in the October 2005 purchase of Webster, TX-based Diagnostic Systems Laboratories (DSL), a privately held manufacturer of specialty immunoassays. Established in 1981, DSL has issued about 20 to 30 new products annually.
“Coupling DSL’s expertise and proprietary tests with Beckman Coulter’s industry leading immunoassay platforms should be a winning combination,” said Michael Whelan, group vice president of Beckman Coulter’s immunoassay business.
The sector was also bolstered by FDA clearance of the UniCel DxC 600i, a chemistry-immunoassay work cell that has a menu of more than 150 tests available.
Another family of immunoassay systems that has had success is the Access line, but there was also a Class II recall in August 2005, when pipetting techniques for dil-Alpha-fetoprotein performed on the Access, Access 2 and Synchron LX I 725 products had a potential to create splashing, which may cause erroneous results.
Flowing into the diagnostic area, the company purchased Beverly, MA-based Agencourt Bioscience, which was bought in May for $100 million along with $40 million in milestone payments until 2007. Agencourt had annual revenues of $27 million. With the acquisition, Beckman gains a reagents business that stands to benefit from integrating as a single offering with Beckman equipment.
6. Dade Behring
Jim Reid-Anderson, Chairman, President and CEO
Hiroshi Uchida, President, global manufacturing and supply chain
David Edelstein, Sr. VP and CIO
John Duffey, Sr. VP and CFO
NO. OF EMPLOYEES: 6,240
WORLD HEADQUARTERS: Deerfield, IL
The remarkable turnaround continues for the largest diagnostics-only company. Dade Behring continues to head in the right direction after emerging from Chapter 11 bankruptcy in 2003.
Revenues rose 6% in fiscal 2005 after a 9% hike in 2004 with the continued popularity of its Dimension line of instruments and gains in the Microbiology, Hemostasis, Cardiac and Drug Testing segments.
Both the Hemostasis and Microbiology sectors had 8% jumps in sales while the company’s largest revenue producer, Core Chemistry, had a 7% gain in 2005 to $1.1 billion.
After improving its profit by 67% in 2004, the Deerfield, IL-based company saw its profit jump 56% in 2005. However, Dade Behring had a flat revenue increase in first quarter of 2006; the company was hurt by a previously strong first quarter in 2005 as well as a decline in instrument sales placed under a sales-type lease arrangement in the United States. Profits continued to be robust, however, with a 36% increase in the quarter ending March 31.
Along with its strong profit gains, the company continues to chip away at its debt—going from $434 million in 2004 down to $330 million last year.
The company’s largest sector is Core Chemistry, which contributes 65% of its total sales from products including the Dimension RxL Max Suite System, the BN ProSpec Analyzer, V-twin System and the StreamLAB Workcell. Part of the segment is the fast-growing cardiac diagnostics area, which includes Dade’s Stratus CS Acute Care Diagnostic System.
Dade also launched the homocysteine cardiac marker for use on its BN II and BN ProSpec systems, testing that determines if a patient is a high risk of a heart attack or stroke.
While only 10% of the entire sales come from the Microbiology segment, Dade Behring has a 42% share of the microbiology market. It also holds a leadership position in the hemostasis market, with 38% of total sales.
The company received FDA clearance in July 2005 for its Dimension Vista System, an integrated chemistry/immunochemistry analyzer, and is expected to commercialize it this October. Also part of the Dimension line, Dade Behring launched the Dimension Lynx automation system. The Lynx allows mid-volume companies to take a first step into the automation market.
In terms of acquisitions in 2005, Dade Behring bought a portion of the Gurgaon, India-based Ranbaxy Laboratories, the company’s distributor in India, in September to increase its exposure in one of the fastest growing markets.
7. Ortho-Clinical Diagnostics
William Weldon, Chairman and CEO
Robert Darretta, CFO
CE Holland, Worldwide President
JoAnn Hefferman Heisen, CIO
Theodore Torphy, VP, Science and Technology
NO. OF EMPLOYEES: 115,600
WORLD HEADQUARTERS: New Brunswick, NJ
Ortho-Clinical Diagnostics, the diagnostics franchise of Johnson & Johnson, continued to show gains in sales as the group’s popular product lines continued to produce in 2005.
In fiscal 2005, Raritan, NJ-based Ortho-Clinical Diagnostics enjoyed an 8% rise in revenues with the help of its automated blood typing products, ECI product line and the success of the Vitros 5, 1 FS Clinical Chemistry system. As in 2004, the Vitros 5,1CFS chemistry system was the leading producer in Ortho-Clinical Diagnostics line of products. The Vitros 5,1CFS offers twice the number of tests over the previous menus while providing a simplified system operation.
While the company’s revenues continue to jump, the Vitros was littered with recalls throughout 2005 and the start of 2006. The company had two Class I recalls to start 2006 including the Vitros Immunodiagnostic HBsAG Confirmatory Kit after it was found that an unknown component in the diluting solution used to test blood and serum samples may produce “Not Confirmed” results for samples found to be positive with the initial test, which can cause some results to be classified as false negatives. Ortho-Clinical also issued a recall for a Vitros Immunodiagnostic Signal Reagent used with the ECi/ECiQ laboratory test system. According to the company, the reagent may produce inaccurate test results in some cases.
The company did get some positive news from the FDA with the clearance in July 2005 of the Vitros Chemistry Products direct High Density Lipoprotein (dHDL) Slide.
Alain Mérieux, Chairman
Benoit Adelus, CEO
Christopher Mérieux, Director of Medical Affairs and Research
NO. OF EMPLOYEES: 5,300
WORLD HEADQUARTERS: Marcy-l’Etoile, France
In its first full year as a publicly traded company, bioMérieux saw its revenue decrease 7% behind the strength of a strong dollar. When euros are factored in, however, the Marcy-l’Etoile, France-based company garnered a 7% rise in revenues.
Company profits took a 2% dip (calculated by using the currency exchange to dollars) while profits jumped 13% based on euros.
Like other companies based outside of the United States, the dollar appears to be weakening, and first quarter 2006 sales experienced a 5% increase to $309 million for the quarter ending March 31.
Products leading the way for bioMérieux were the releases of the antibiotic identification Vitek 2 Compact machine, the Vidia immunoanylizer, easyMag and the Tempo platforms.
Region-wise, the biggest percentage increase in revenues was in the Asia-Pacific market, which had a 10% rise in sales last year and continued in 2006 with a first quarter revenue jump of 21%. The first quarter sales increase is part of the continuing expansion in the every growing Asian market.
While the focus is in Asia, most of the company’s sales still come from the Europe, Middle East and Africa regions—but there was only a single-digit increase in both 2005 and the first quarter of 2006.
“We pursued our international expansion, launched new platforms, signed partnership agreements—particularly in Asia—achieved promising results in molecular biology and strengthened our financial position,” said Chairman Alain Mérieux.
Despite the improving currency situation and sales increases, the company was still working with the FDA (as of the first quarter of 2006) on quality assurance issues with its facility in Durham, NC. In July 2005, the FDA sent a warning letter to bioMérieux, after an audit, regarding its microplate immunoassay product ranges. The agency focused on the company improving its quality assurance system through upgrading the plant, improving processes and overhauling certain sections. A re-inspection of the plant in late 2005 reemphasized to bioMérieux the need to speed up the corrective actions. The company did get a clean bill of health for its other plants last year.
While the company was having problems at its Durham facility, bioMérieux had completed or was in the process of completing several capital improvement projects, including one in Grenoble, France (where the molecular biology operations were consolidated), as well as the expansion of facilities in Craponne, France, Florence, Italy and Marcy, France.
Along with the FDA inspection problems in Durham, the company also experienced a few recalls, including a pair of the Class I variety, the most severe of the agency’s three classes. In May 2005, the company recalled several lots of the Simplastin HTF/E reagents after it was determined that the labeling on the Coag-a-Mate Max and Thrombolyzer instrument platforms were inaccurate.
Also, in October 5, a recall was issued for the VeriCal Calibrator sets after a problem with mislabeling—a misdiagnosis could occur, resulting in serious injury or death from erroneous calibration data leading to use of improper levels of oral anticoagulant drugs.
In 2005, the company also launched its own avian flu test, the NucliSens EasyQ Influenza H5 and N1, a kit of reagents exclusively for research purposes.
Hisashi Ietsugu, President and CEO
Kenichi Yukimoto, Director and Senior Managing Officer
Kazuya Oye, CEO Sysmex America
NO. OF EMPLOYEES: 4,706
WORLD HEADQUARTERS: Kobe, Japan
One of the largest growing IVD companies is Kobe, Japan-based Sysmex, which realized a 15% rise in revenues in fiscal 2005 with a boost from its growing Asian market.
While it was not as big of a jump as in fiscal 2004 (31%), it is still one of biggest increases of the IVD companies and there should be more with fiscal 2006 and beyond as Sysmex continues to expand its facilities. In addition, the company’s profit leaped 82% for fiscal 2005 after only a small rise in fiscal 2004.
“Our unprecedented results followed on from successful execution of a well-formed strategy that has made us a global leader in market niches,” said CEO Hisashi Ietsugu, who added that the company is well positioned, being a Japanese company, to take advantage of the economic explosion in China and other Asian countries. The company registered a 25% jump in fiscal 2005 revenue in China while there was a 20% hike in sales in the rest of the Asia-Pacific region.
Forty-three percent of its sales were registered in Japan, whereas 90% of its annual revenues came from the clinical laboratory diagnostics market.
In addition to its expansion in Asia, the company moved to streamline its European business management structure and operations for great efficiency. To increase its inroads into Eastern Europe, Sysmex established a base in Poland while, at the same time, lessening its presence in Western Europe as the company dissolved its Belgium subsidiary as of August 2005.
In the US, the company continues to benefit from a move in 2003 from indirect selling through a distributor to the company’s direct sales system, which has helped one of the market-leading hematology products.
In 2005, the company announced several capital improvement projects, including the construction of a pair of new facilities, an expansion at an R&D facility and also a collaboration to build the world’s largest laboratory system.
In August 2005, Sysmex announced the construction of a new $12 million reagent factory in Mundelein, IL that is expected to go on-line in April 2007 and produce 700,000 packages per year to meet the increasing demand for diagnostic reagents in the US market. In turn, the company plans on closing its California plant in June 2008.
In another facility move in August 2005, the company announced the expansion of its subsidiary, International Reagent Corporation’s (IRC), in Seishin, Japan with a $5 million facility plan. Along with the existing diagnostic reagents, such as clinical chemistry reagents, Sysmex plans to manufacture diagnostic reagents in the commercialization of life science research for the expansion. A new administration building is also being built on the site.
This comes after the Sysmex board of directors announced in February 2005 that it would transfer the reagent development operations of IRC to the parent company. As part of a company realignment, the Ono, Japan reagent manufacturing operations were transferred to the IRC facility in April 2006 and, in turn, renamed Sysmex International Reagents Corporation.
10. Bio-Rad Laboratories
$618 Million ($1.2B Total)
David Schwartz, Chairman
Norman Schwartz, President and CEO
John Goetz, VP, Group Manager, Clinical Diagnostics Group
Brad Crutchfield, VP, Group Manager, Life Science Group
Christine Tsingos, VP and CFO
NO. OF EMPLOYEES: 5,200
WORLD HEADQUARTERS: Hercules, CA
The Hercules, CA-based company did not match its double-digit increase of 2004 but still had a steady 7% rise in revenues as Bio-Rad’s Clinical Diagnostics segment was bolstered by diabetes monitoring, genetic disorder identification, quality control product lines and blood virus products in the United States and Asia.
Calling 2005 “a dynamic year,” CEO Norman Schwartz said, “Underneath it all is a solid business in which we see real opportunities…[in] 2006.”
The 2005 sales were also helped by domestic sales of the Platelia Aspergillus enzyme immunoassay.
The segment released several new products in 2005, highlighted by the new MRSA select chromogenic media, which detects Methicillin-resistant Staphylococcus aureus, and the BioPlex 2200, a new immunoassay platform that the company said is the first completely automated system to generate multiple results from a single patient sample to help customers facing a labor shortage.
It was also the first full-year realization in 2005 of the purchase of Plano, TX-based Hematronix, which contributed to its position in the quality-control management industry and aided the clinical diagnostics segment to record revenues.
In the first quarter of 2006, Bio-Rad reported a 6% rise in revenues, to $160 million, with the continued growth from its popular product lines and the realization of sales from the placement last year of systems associated with the company’s Evoilis automated microplate processors.
The first quarter also benefited from the March 2006 release of the Rack Loader used in conjunction with the D-10 Hemoglobin testing system, which expanded the sample handling capacity of the system to 50 samples.
For the rest of 2006, the company reported that it is targeting the acquisition of product lines and is undertaking a major project in Europe, which along with the Americas had an equal top share of sales in 2005. Because of the European Union’s growth, Bio-Rad is in the process of streamlining its management structure and better aligning product management across the continent.
Sunako Doi, Chairman
Shigeru Doi, President
Masayoshi Nonogaki, Director
Shigeki Yamada, Director
NO. OF EMPLOYEES: 870
WORLD HEADQUARTERS: Kyoto, Japan
Arkray, the lone privately held company in the Top 15 IVD report, continued to be hurt by a weak Japanese economy and a strong dollar as revenues dropped 3% in fiscal 2005.
However, the company could have a strong 2006 after announcing the purchase in May of Montreal, Quebec-based Medisys’s blood glucose testing kits business for $41.3 million. (Medisys opted to sell its testing kit segment to concentrate on being a medical investment company.)
In addition to the business purchase, Arkray released several new products in 2005 and 2006.
Arkray launched two new analyzers, Spotochem IM SI-3511 and Adams A1c HA-8170, in March 2006 for use in diabetes diagnosis. The SI-3511 can measure whole blood, serum and plasma for clinics and private practitioners. The HA-8170 measures HbA1c and can analyze up to 100 samples.
In June 2005, the company, in collaboration with MC Laboratory, released the MC Fan HR 300, which measures blood fluidity. The HR 300 allows for proactive health management and calls attention to lifestyle-related diseases. Also in June, the company introduced a self-monitoring blood glucose meter, Glucocard X-Meter GT-1910, which calibrates automatically using necessary information in the inserted test strip.
In July 2005, Arkray introduced what it called the world’s smallest and lightest urine analyzer, PocketChem UA PU-4010. The product is used in conjunction the Arkray’s proprietary test strip, Aution Sticks 10PA, which was released in December 2004.
Arkray introduced another product in the Aution line, the Aution Eleven AE-4020, in January 2006. The 11th model in the line, it is indicated for use in small to medium-sized hospitals and clinics.
12. Diagnostic Products Corporation
Michael Ziering, CEO
Sidney A. Aroesty, President and COO
Douglas Olson, Chief Scientific Officer
Robert DiTullio, VP, Regulatory Affairs and Quality Systems
NO. OF EMPLOYEES: 2,554
WORLD HEADQUARTERS: Los Angeles
It will probably be the last time for Los Angeles, CA-based Diagnostic Products Corporation (DPC) on the Medical Product Outsourcing list of top 15 IVD companies.
The company announced in April that Siemens AG of Erlangen, Germany, Europe’s largest medical equipment manufacturer, had bought DPC for $1.9 billion.
“This merger will allow us to continue on our current rapid course of development while also providing DPC access to the resources and support of a recognized leader in the delivery of integrated healthcare solutions,” said DPC CEO Michael Ziering.
Erich R. Reinhardt, CEO of Siemens AG, said that DPC was an attractive purchase because of its immunodiagnostics business.
“The potential is huge to drive ground-breaking innovations by combining DPC’s in-vitro diagnostics leadership with Siemens leading position in medical imaging and healthcare IT solutions,” said Reinhardt.
In what could be its final annual report, the company reported an 8% rise in sales fueled by its flagship products, Immulite 2000/2500 reagent, as the big sales producers for the company. In addition, the company’s overall profit also increased 8%.
These sales and profits increases resulted in spite of the fact that the company was inhibited from releasing any new products for most of 2005 after it became the subject of an Application Integrity Policy (AIP) by the FDA, based on the company’s questionable application for its Immulite Chagas test in Feburary 2004.
In September 2005, however, the FDA announced that the company was no longer the subject of the AIP. While DPC can now file an application for FDA approval, an independent third party must review the submission for the next two years before submitting it to the agency.
The Immulite 2500 was launched in June 2004 as an upgrade to the 2000 and reduces the time it takes to get a result from the tests.
Interestingly enough, the company reported that the Immulite 2000 is still in demand for customers in which the faster test results are not critical, such as large reference laboratories.
The company did have a Class II recall for the Immulite 1000 Carcinoembryonic Antigen in July 2005. It was discovered that, when using the product, there was a chance of an adverse trend in stability from which controls could be biased or out of range.
13. Olympus America
$384 Million ($8.3B Total)
Tsuyoshi Kikukawa, President, Olympus
F. Mark Gumz, President and COO, Olympus America
Stephen S. Tang, Group VP, General Manager, Life Science, Olympus America
NO. OF EMPLOYEES: 33,000
WORLD HEADQUARTERS: Tokyo, Japan
Hurt by the strong dollar and decreased sales in Japan, revenue of Center Valley, PA-based Olympus America’s diagnostic products were relatively flat in fiscal 2005.
However, if you take the same amount of sales in Japanese Yen, the diagnostic systems increased by 9%.
The segment was hurt especially in Japan, where revenue dropped 2%. Overseas, though, based on the Japanese Yen, revenues increased by double digits (11%).
The diagnostic systems, or the blood analyzer business, of Olympus are part of the Life Science division, which decreased 3% in revenue to $918 million as the industrial microscopes took a double-digit hit in worldwide sales.
Overall, Olympus, the parent company of Olympus America, came out of the red in fiscal 2005 and produced a $243 million profit.
Sales of the diagnostic systems segment were helped by the introduction of the Tango Automated Blood Bank system, which is designed for hospital transfusion services, donor centers and reference laboratories. It can perform several functions, including blood group determination, antibody screening and identification, phenotyping and compatibility testing.
In July 2005, Olympus earned FDA approval for its C-Reactive Protein (CRP) Latex assay as an independent cardiac risk marker. High traditional clinical laboratory evaluations may be useful as an independent marker of prognosis for recurrent events in patients with either stable coronary disease or acute coronary syndromes. Also in July, Olympus launched the Olympus Urine Chemistry Calibrator DR0090, which is designed for the calibration of urine assays on the full line of Olympus chemistry immuno-analyzers.
As part of a big push to beef up its clinical analyzer business, the company announced in 2005 the start of construction for a 161,500 square-foot manufacturing facility to produce clinical analyzers in Mishima, Japan. The plant, which is scheduled to open in 2007, would double the capacity of the current facility.
“The newly designed and expanded manufacturing and R&D operation in Mishima will make it possible for Olympus to continue growing at a robust rate in the North American market,” said Stephen Wasserman, group vice president, Diagnostic Systems Group, Olympus America.
Among the other lines the plant will be producing will be the AU3000i analyzer, which is expected to be available in the US market in late 2006.
In July 2005, Olympus acquired a privately held European microfluidics company, Advalytix AG of Brunnthal, Germany, for an undisclosed purchase price. With Advalytix in the fold, it provides Olympus with key technologies to maximize growth in innovative analytical systems.
$362 Million ($508M Total)
Patrick J. Sullivan, Chief Executive Officer
Daniel J. Levangie, Executive VP, Commercial Operations
Timothy M. Adams, CFO
James Linder, Chief Medical Officer
A. Suzanne Meszner-Eltrich, Senior VP
NO. OF EMPLOYEES: 1,118
WORLD HEADQUARTERS: Marlborough, MA
The increasing pursuit of more sales internationally has helped Marlborough, MA-based Cytyc build on its overall clinical diagnostic revenue, which grew 10% in fiscal 2005.
The company’s international diagnostic sales jumped 24% to $50 million last year with inroads into China, Australia, Europe and the United Kingdom. Also, the company signed an agreement with Tokyo, Japan-based Olympus to sell the ThinPrep System, the company’s core product, in Japan.
Domestic diagnostic product revenue also was still up 8% to $311 million, which was driven by 132 new ThinPrep Imaging Systems in the United States.
Overall, company profit was a very healthy 53% increase to $113 million.
“Such strong financial performance has given us the foundation on which we continue to broaden our portfolio of best-in-class technologies for women’s health—a strategy that is yielding sustainable growth through diversification of our revenue streams,” said CEO Patrick J. Sullivan.
As part of the company’s concentration on developing international revenues, Cytyc promoted David Harding from senior vice president of Cytyc Corporation to president of Cytyc’s international subsidiary.
In 2006, Cytyc celebrated the 10th anniversary of the company’s Initial Public Offering (IPO) on March 8, 1996.
From when it made its first fiscal report in 1996, the company has grown from $8 million to $508 million in total sales in fiscal 2005.
And in September 2005, the company improved on the ThinPrep Pap Test. The test received an expanded FDA labeling claim stating that the technology offers improved detection of cervical glandular abnormalities over conventional Pap tests; the FDA additionally approved a PMA supplement for the ThinPrep related to the testing of test samples by molecular diagnostic methods.
In 2005, the Marlborough, MA-based company was busy in the courts. A four-year federal lawsuit was dropped in April 2005 in the District of Massachusetts that alleged that the company didn’t disclose important facts about its financial performance and gave misleading statements about past and current financial expectations for the company.
The company also resolved a licensing dispute in March 2005 with DEKA Products Limited Partnership of Manchester, NH, which designed a filter that Cytyc uses for its ThinPrep Pap Test. An arbitration panel ruled that the licensing agreement between both companies required a 1% royalty to DEKA based on sales of the entire kit retroactive from late 2000 through the end of 2004.
In September 2005, Cytyc garnered a $7 million contract to supply pap smear test kits to the US military. The contract with the military has a one-year defense period with four one-year option periods.
Henry Nordoff, Chief Executive Officer
Herm Rosenman, VP, Finance and CFO
Daniel Kacian, Executive VP, Chief Scientist
Niall M. Conway, Executive VP, Operations
Glen Paul Freiberg, VP, Regulatory, Quality and Government Affairs
NO. OF EMPLOYEES: 900
WORLD HEADQUARTERS: San Diego, CA
As the lone addition to Medical Product Outsourcing’s IVD Top 15, San Diego, CA-based Gen-Probe saw revenues for 2005 rise 13% with contributions from its Clinical Diagnostics and Blood Screening businesses while profits increased 10% to $60 million.
The Blood Screening segment had the biggest impact on overall sales as it jumped 36% in fiscal 2005 with the growth of its Procliex Ultrio assay on the Tigris system outside of the United States. Of note internationally was the company’s success in South Africa, where all of the blood banks in the country use the system, according to the company. The Procliex Ultrio assay simultaneously detects HIV-1, hepatitis C virus and hepatitis B virus in donated blood prior to transfusion.
And Gen-Probe started 2006 on an even bigger note. Sales grew 25% in the first quarter ending March 31 as the Blood Screening segment continued its strong rise with a 50% jump in revenues. The company also was bolstered by the initial shipments of the Procleix West Nile virus (WNV) assay in the United States. In December 2005, the FDA approved the Procleix WNV assay for use in the semi-automated instrument platform.
In the Clinical Diagnostics segment, revenues rose 12% in 2005 behind the market share gains of the Aptima Combo 2 assay, an amplified Nucleic Acid Test (NAT) to detect Chlamydia infections and gonorrhea, the two most common bacterial sexually transmitted diseases. The market increase resulted after the FDA approved marketing clearance for the company to use the Aptima Combo 2 assay to test for Chlamydia trachomatis and Neisseria gonorrhoeae from liquid Pap specimens collected and processed as part of a collaboration with Marlborough, MA-based Cytyc.
In addition to successful sales, the company came out big in the courtroom. In September 2005, a federal court of appeals backed up a July 2004 federal district court judgment that dismissed an infringement claim against Gen-Probe by Farmingdale, NY-based Enzo Biochem on the sale of products that help diagnose gonorrhea.