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Scientific toolmakers at Pittcon expect business to remain buoyant

Despite an economic slowdown in China, expectations are high for 2016

by Marc S. Reisch
March 28, 2016 | A version of this story appeared in Volume 94, Issue 13

Purge valve inside Thermo Fisher’s Vanquish ultra-high-performance liquid chromatography system.
Credit: Marc S. Reisch
Purge valve inside Thermo Fisher’s Vanquish ultra-high-performance liquid chromatography system.

The Pittsburgh Conference on Analytical Chemistry & Applied Spectroscopy is still the place to go to take the pulse of the scientific instrumentation business. In 2016, as in years past, the gathering attracted throngs of analytical science mavens seeking to bolster their skills and learn about the latest measurement tools and research techniques.

Credit: Marc S. Reisch
Display screen showing pump pressure in the Thermo Fisher Dionex Integrion ion chromatography unit.
A photo of yellow and blue lines tracking pump pressure in an ion chromatography unit.
Credit: Marc S. Reisch
Display screen showing pump pressure in the Thermo Fisher Dionex Integrion ion chromatography unit.

Held earlier this month in Atlanta, Pittcon gathered 12,841 attendees, down from 14,270 in New Orleans last year and a historic low. Attendance peaked at 34,000 in 1996. Those who came to the Georgia World Congress Center could explore booths maintained by 847 exhibitors and attend numerous scientific symposia, oral sessions, and poster displays throughout the five-day event.

Although the gathering doesn’t regularly attract certain big-name instrument firms—Agilent Technologies and PerkinElmer, for example, didn’t attend—it does bring in the likes of Bruker, MilliporeSigma, Shimadzu Scientific Instruments, Thermo Fisher Scientific, and Waters Corp.

Executives from these firms took advantage of the Pittcon forum to discuss the buoyant market they are seeing for instruments despite a slowing economy in China, an important outlet. In addition to showcasing their latest product offerings, they discussed industry trends such as transitioning research tools into the diagnostics market, harnessing the Internet as an information and sales venue, and developing better sample preparation protocols.

A further expansion into diagnostics would be a natural extension of our core business.
Christopher J. O’Connell, CEO, Waters Corp.

Waters used Pittcon to introduce its new chief executive officer, Christopher J. O’Connell, a veteran of the medical device industry. O’Connell said he joined Waters, a chromatography and mass spectrometry specialist, after 21 years at medical device maker Medtronic because he sees a lot of growth ahead for scientific instruments. “Right now the market appears to be solid,” he said.

In 2015, Waters posted sales of just over $2 billion, up about 3% compared with the year earlier. Operating income rose nearly 10% to $568 million. O’Connell is projecting mid-single-digit revenue growth for 2016.

Even China will contribute to that growth despite the economic slowdown there. As O’Connell sees it, China is making a shift from a world manufacturing center to a country more focused on its domestic market. As China ramps up regulations on food and medicine, “that will help our sales in the country,” which are growing at just under 20% annually, he said. The government is also interested in fostering the country’s drug manufacturing capabilities, “and that will help us too,” he said.

O’Connell said Waters will continue to emphasize innovation. In 2015, the firm spent $119 million on R&D, or close to 6% of sales. In keeping with Waters’ traditional focus on organic growth, O’Connell said he would consider selective acquisitions but that “our focus is on being better, not bigger.”

Credit: Marc S. Reisch
Ionization source of Waters’ Vion ion mobility spectrometry/quadrupole-time-of-flight mass spectrometer.
Ionization source of Waters’ Vion ion mobility spectrometry/quadrupole-time-of-flight mass spectrometer.
Credit: Marc S. Reisch
Ionization source of Waters’ Vion ion mobility spectrometry/quadrupole-time-of-flight mass spectrometer.

Given his background in the health care industry, O’Connell acknowledged that many people have asked him whether he intends to put more emphasis on medical applications. The firm is already a major instrument supplier for biopharmaceutical research and neonatal screening, he pointed out, and a further expansion into diagnostics would be a “natural extension of our core business,” O’Connell said.

Others such as Thermo Fisher have already made the leap into diagnostics. The firm bought allergy and autoimmune diagnostics testing firm Phadia in 2011 and now has a pending deal to buy Affymetrix, a clinical and diagnostic genetic analysis expert, for $1.3 billion. However, that deal is in question now that a new bidder has emerged (see page 12).

According to Dan Shine, a Thermo Fisher senior vice president, the company recently arranged to distribute Euroimmun’s research diagnostic kit for the mosquito-borne Zika virus, which is now ravaging Brazil and threatens to spread to the U.S. this summer.

But diagnostics is just one component of Thermo Fisher, which saw operating income increase more than 14% in 2015 to $639 million on a sales increase of about 1% to nearly $17 billion.

Shine, who is also a member of C&EN’s advisory board, said overall demand for instruments and consumables remains strong at Thermo Fisher. Markets such as biopharma, small-molecule drug development, and food analysis are particularly robust, he said. Despite the predicted slowdown in China, he still expects increased spending on instruments for environmental and food quality testing.

To keep business momentum going, Thermo Fisher continues to beef up its online customer engagement efforts. In February, the firm retired the Life Technologies website, which came along with Thermo Fisher’s 2013 purchase of the biotechnology products maker.

Contents of the retired site were incorporated into a newly launched Thermo Fisher site along with enhanced descriptions of applications and methods. “We know the world is going more digital, and we want to give customers better access to our expertise through both Web- and mobile-based platforms,” Shine said.

Also bolstering its Web presence is the laboratory supply house called MilliporeSigma in the U.S. and Merck Life Sciences elsewhere. The business was formed last year when Germany’s Merck acquired legendary lab supply firm Sigma-Aldrich for $17 billion and combined it with its own lab products unit.

Sigma-Aldrich was renowned for its customer support through a website that seamlessly connects users with research supplies, information on methods, and articles relevant to their scientific interests. Klaus-Reinhard Bischoff, executive vice president of MilliporeSigma, said the Sigma-Aldrich website model will be used globally for the combined businesses.

“You can already find EMD Millipore products on the Sigma-Aldrich website,” Bischoff said. MilliporeSigma is committed to making sure customers have “as good an experience or better” on the integrated site as they had before. “With our combined portfolios, we are a good partner for scientists working with both small and large molecules,” he said.

Bruker, like other instrument makers, would also say it is a good partner for scientists. The firm focused its new product introductions at Pittcon on analytic solutions. Among them was a honey profiling module that works with low-field (200 Mhz) Fourier transform nuclear magnetic resonance (NMR) equipment to allow food processing firms to screen for mislabeled and adulterated honey.

According to Bruker’s president, Frank Laukien, the profiler expands Bruker’s foray in NMR food characterization beyond an earlier profiler for European wines. “I thought NMR was just headed for higher field instruments, which it still is,” Laukien said. But customer interest in using NMR to authenticate honey and other foods “is not what I would have expected a few years ago.”

As for business overall, Laukien said he expects sales to life sciences customers to be decent, but not spectacular, in 2016. Industrial markets should be slower this year, he said. Like his competitors, Laukien expects growth in China for instruments directed at the life sciences and environmental and food quality monitoring. Demand from Chinese industrial customers, however, will lag.

At Shimadzu, Terry Adams, marketing vice president, pointed out that instrument demand tied to the oil and petrochemical industries will slip this year because of the decline in energy prices. But life sciences markets will continue to do well. In the long term, he expects advances in mass spectrometry to both enable medical breakthroughs and make possible better health diagnostic tests.

Medical research often came up at Pittcon as companies discussed their newest initiatives. A large number of firms introduced kits aimed at reducing the burden of sample preparation for proteomic researchers.

Waters, for instance, showcased its ProteinWorks eXpress Digest Kits, which are intended to accelerate and standardize the quantification of proteins by liquid chromatography/mass spectrometry. Thermo Fisher emphasized the value of its Smart Digest Kits, which cut protein preparation time from 16 hours to two hours.

The handheld mass spectrometer start-up 908 Devices introduced a microfluidic chip for protein separation. Designed to work through a custom interface box attached to a laboratory mass spectrometer, the chip contains etched channels that separate out metabolites, amino acids, intact proteins, or antibody-drug conjugates in two to three minutes, said Chris Petty, vice president of the firm.

The ZipChip and accompanying interface box do not come cheap. Each chip, about the size of a glass microscope slide, costs around $400 and is good for 100 samples. The box costs about $25,000.

For new tools such as the ZipChip to flourish, they must, in the words of Waters’ O’Connell, “provide a better analytical outcome” than what is already available. Although Pittcon is a showcase for new products touting better performance, only time and the bottom line will tell whether those products succeed.  

CORRECTION: This story was published with the captions of the two instrument close-up photos reversed. It was updated on April 2, 2018, to correct the mistake.


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