Analytical and life sciences instrumentation companies remain generally bullish on their businesses despite a stormy 2015.
Combined instrumentation sales for the top 25 firms barely budged from 2014 levels, rising less than 1%. The macroeconomic challenges acknowledged by most suppliers included the Chinese economy, foreign exchange rates, and energy prices.
The top five companies account for 47% of the sales of the top 25.
The top 10 companies, all with more than $1 billion in instrumentation sales, account for 76% of the sales of the top 25.
Of the top 25 firms, 10 are U.S.-based, nine are in Europe, and six are in Japan.
As a result, C&EN’s latest ranking, based on 2015 instrumentation sales, finds essentially no change in the companies included and few shifts in their relative positioning. Restructuring was the primary reason for Agilent Technologies’ drop of two places; declining sales caused the same downward shift for Bruker. Meanwhile, two-place upward moves came from healthy sales growth at Illumina and reporting changes at Carl Zeiss.
Only Qiagen joined the list this year, replacing Analytik Jena, which under new owners no longer reports sales figures. Together, the 25 companies accounted for $23.6 billion in sales, or nearly 60% of the global market for analytical and life sciences laboratory equipment.
Performance by the individual companies was mixed, with nearly the same number showing increases in sales as those posting declines. The same trend was reflected in R&D spending. About half of the companies made no change or decreased spending, and the others invested a bit more. Largely by virtue of its size, Thermo Fisher Scientific was again the top spender on R&D. Illumina spent the most as a percentage of sales.
Pharmaceuticals and diagnostics continue to be the largest instrumentation markets. Suppliers are optimistic that big-ticket purchasing will improve in the academic research market. At the same time, their attention is turning to applied markets, such as environmental and food applications, while industrial areas such as energy are mixed. In all these markets, consumables remain a stable revenue base.
This year, for the first time, C&EN’s story on the top 25 instrumentation companies includes short profiles of each of the firms. Beyond the numbers, the profiles offer insight into major company events during the past year and glimpses into where companies are heading this year.
2015 instrument sales: $4.24 billion
Through relentless deal-making, Thermo Fisher Scientific has taken a decisive hold on the top spot among instrumentation firms. At $14 billion, one of Thermo Fisher’s largest deals was its 2014 purchase of Life Technologies, which it continued to integrate in 2015. Restructuring and a push to manufacture in low-cost regions helped Thermo Fisher save money last year. Although instrument sales fell slightly during what the company called a “challenging macroenvironment,” its $17 billion in total sales rose, aided by one of the broadest ranges of products and services in the industry. In further moves in 2015, Thermo Fisher spent $700 million to expand its bioproduction and lab chemicals offerings through the purchases of Advanced Scientifics and Alfa Aesar, respectively. Last month, it put down $1.3 billion to buy the genetic, cellular, and protein analysis firm Affymetrix after defeating a competing offer made by former Affymetrix employees.
2015 instrument sales: $2.40 billion
It was six years ago that the industrial technology company Danaher suddenly appeared among the top 10 life sciences and analytical instrumentation companies. The turning point was its purchases of the mass spectrometry supplier AB Sciex and life sciences equipment firm Molecular Devices. Since then, the Sciex product portfolio has been “completely refreshed,” according to Danaher, and increased to more than 15 instruments. The business has been growing at double-digit rates in the past two years, Danaher claims, thanks to a focus on the clinical, food, and biologics areas and expansion in emerging countries. Danaher’s exposure to life sciences markets increased further with the $14 billion purchase of purification specialist Pall Corp. in 2015, which followed the $6 billion acquisition of Beckman Coulter in 2011. Life sciences may become even more prominent at Danaher this year as it splits off about one-third of itself to create the industrial technology company Fortive.
|RANK||COMPANY||INSTRUMENT SALES 2015 ($ MILLIONS)||% CHANGE FROM 2014||INSTRUMENT SALES AS % OF TOTAL SALES||HEADQUARTERS COUNTRY|
|1||1||Thermo Fisher Scientific||$4,241||-3.4%||25.0%||U.S.|
|16||17||Merck Life Sciencec||499||11.9||13.4||Germany|
2015 instrument sales: $2.04 billion
CEO Christopher J. O’Connell recently called 2015 “a true milestone year for Waters, highlighted by impressive and balanced growth across key products and markets, the significant impact of meaningful new innovations, and a smooth CEO transition.” O’Connell joined the chromatography and mass spectrometry firm in June and is conducting a strategic review that is expected to take until October to complete. Stock analysts and investors are waiting to hear more of his views on biopharma and academic markets as well as internal R&D and new product programs. In the meantime, the company was one of just a few U.S.-based instrument makers to post higher sales in 2015. And for the first time in its 21-year history as an independent company, Waters broke the $2 billion sales mark.
2015 instrument sales: $1.82 billion
During its 2015 fiscal year, which ended on Oct. 31, Agilent Technologies underwent a series of major transformations. The first and biggest was the spin-off of its electronic measurement business as a separate company called Keysight Technologies. Agilent also closed down its nuclear magnetic resonance spectrometer unit, much to the chagrin of users, and sold its X-ray diffraction business to Japan’s Rigaku. Between these changes and declining sales in its life sciences and applied markets business, Agilent slipped from second place to fourth in C&EN’s ranking this year. Under new CEO Mike McMullen, a longtime company executive, Agilent is undertaking a multiyear cost reduction and rationalization program. At the same time, it bought the genetics software services firm Cartagenia in May and the cell analysis technology developer Seahorse Bioscience in September. To enter the next-generation sequencing instrument market, Agilent agreed last month to invest up to $185 million in Lasergen.
2015 instrument sales: $1.80 billion
Although instrument sales at Japan’s Shimadzu were on track to increase more than 13% in the fiscal year that ended in March, its ranking as the fifth-largest firm didn’t change. Factors contributing to the jump in sales were increased demand and a weakened yen. In Japan, instrument sales grew in the chemical, pharmaceutical, and steel industries as well as to universities. Pharmaceutical industry purchases rose steadily in North America, Europe, and China. And chemical industry sales were strong in Europe and China. Looking to the future, Shimadzu is entering new markets such as molecular diagnostics and cellular analysis. To target North American customers, the company is investing $20 million over five years at its innovation center in Columbia, Md.
2015 instrument sales: $1.79 billion
Molecular diagnostics such as blood analysis and gene-sequencing instruments performed well within the broader diagnostics business at the Swiss health care giant last year. Molecular diagnostics sales increased 7% in 2015, driven by gene-sequencing and diagnostic screening products. The company launched eight new instruments and tests for viral infections, including a recent test for the Zika virus. Roche is spending up to $425 million to acquire GeneWeave BioSciences, a California-based company developing clinical microbiology diagnostics that identify multi-drug-resistant organisms and assess antibiotic susceptibility. In 2015, Roche bought Massachusetts-based Kapa Biosystems, which generates and optimizes enzymes for next-generation sequencing and polymerase chain reaction applications.
|($ MILLIONS)||AS % OF TOTAL SALES||% CHANGE FROM 2014|
|Thermo Fisher Scientific||$692||4.1%||0.2%|
2015 instrument sales: $1.63 billion
Slow and steady was PerkinElmer’s pace in 2015. Modest growth in instrument sales of just 1.6% allowed it to move up a notch to place seventh in C&EN’s annual ranking. Like others in the analytical equipment industry, PerkinElmer experienced a more challenging economic climate than anticipated, and the firm expects headwinds to continue in 2016. PerkinElmer will be investing in its target areas of reproductive health, emerging market diagnostics, food quality and safety, and lab services. “Rapidly changing technologies and analytics are playing a more pivotal role in health care and science than ever before,” CEO Robert F. Friel said when reporting earnings. “Growing populations are demanding better access to expanded health care offerings and safer food, while regulatory changes are focusing on the health of our families and the environment.” In the absence of any acquisitions, PerkinElmer’s R&D efforts will be a key factor in its growth, stock analysts believe, but results may not emerge until late 2016 or beyond.
2015 instrument sales: $1.51 billion
Light, ion, electron, and X-ray microscopes are Carl Zeiss’s contribution to the analytical and life sciences instrumentation market. And the German company put them at center stage during the International Year of Light in 2015. But rather than organic growth, it was a change in reporting—Zeiss combined its microscopy and industrial metrology groups to form its research and quality technology business—that moved the company into eighth position in C&EN’s ranking. Sales for the enlarged business grew about 11%, or 4% when adjusted for currency effects. However, for Zeiss the microscopy market grew only slightly, with industrial applications faring better than those in research and education. In response, the company is looking to expand its product portfolio to help it open up new industrial markets and customer segments.
2015 instrument sales: $1.49 billion
For the second difficult year in a row, Bruker reported a decline in sales. The result was a drop to ninth place in C&EN’s ranking after having been in seventh the year before. Instrument sales fell 11% because of changes in foreign exchange rates and, to a lesser extent, shifts in the company’s product portfolio. Trying to turn things around, Bruker is in the midst of a three-year transformation program designed to build its portfolio, lower costs, and find growth opportunities. In 2016, the company wants to improve profitability by strengthening its commercial practices, implementing lean manufacturing, and expanding outsourcing. Stock analysts are cautiously optimistic that Bruker is showing some improvement, especially because it has been able to increase prices for nuclear magnetic resonance systems due to limited competition.
2015 instrument sales: $1.15 billion
Best known as a provider of weighing devices for laboratory, industrial, and food retailing applications, Mettler Toledo also makes a variety of instruments for sample preparation, synthesis, benchtop analysis, and materials characterization. Its reaction engineering and real-time analytical systems are used in drug and chemical development; its process analytical instruments are used for in-line measurement during manufacturing. Mettler’s products may be less flashy than some of its competitors’, but it nonetheless rates among the top 10 instrumentation companies with more than $1 billion in annual sales. Sales declined 1.5% in 2015 in part because of weak demand in emerging markets, including China, Brazil, and Russia, and significant currency exchange rate headwinds.
2015 instrument sales: $695 million
Bio-Rad Laboratories sells a broad range of products for life sciences research and clinical diagnostics. Its instruments are largely polymerase chain reaction, chromatography, and cell analysis systems sold to academic and research institutions, health and commercial labs, and the drug and food safety industries. Sales fell nearly 5% in 2015, due largely to currency exchange rates. Recently, Bio-Rad joined next-generation sequencing leader Illumina to develop a high-throughput NGS system for single cells. Sequencing isolated and bar-coded single cells, rather than bulk tissue samples, is expected to provide deep insight into cell function, disease progression, and therapeutic response. The companies plan to launch the new system by early 2017.
2015 instrument sales: $661 million
Nikon’s instrumentation business, which is centered on microscopes, is just one-tenth the size of its better-known, celebrity-endorsed camera business. But in 2015, instrument sales rose nearly 11% to $661 million, whereas camera sales declined more than 10%. Although Nikon was hit by a reduction in public spending in Japan, microscope sales increased after an uptick in the U.S. and the capture of more of the Chinese market.
2015 instrument sales: $599 million
For the past seven years, Illumina’s star has been on the rise. A prolific developer and launcher of next-generation sequencing systems, the company saw instrument sales more than triple between 2007 and 2015. Illumina jumped two spots to number 13 in C&EN’s ranking by virtue of its 7% growth in 2015 instrument sales. Total company sales, which include consumables and services, increased 19% to reach $2.2 billion. Among instrumentation firms, Illumina spends a lot on R&D in both dollar terms and as a percentage of sales. As it expands its gene-sequencing offerings, it has been pushing hard into the clinical diagnostics market through internal development, outside collaborations, and investment bets on start-up companies such as Grail. But all of this assertiveness at the cutting edge comes at a price. This year alone, Illumina has sued competitors in the area of noninvasive prenatal testing and found itself in legal disputes over rights to gene-sequencing technologies.
2015 instrument sales: $572 million
Established as the Japan Electron Optics Laboratory Co. in 1949, JEOL has a long history that was recently recognized when its founders won the Pittcon Heritage Award for creating “one of the greatest Japanese instrumentation companies.” Building on its business in electron microscopes, JEOL expanded into the nuclear magnetic resonance spectrometer area in 1956 and eventually became the number three supplier after Bruker and Agilent Technologies. Since then, its NMR business has gone through ups and downs. In 2011, JEOL spun off its NMR business, with the Japanese government taking a majority stake to help keep it afloat. In 2013, JEOL decided to buy it all back and soon after became one of just two major NMR suppliers when Agilent exited the business. Although JEOL’s fiscal year ending in March 2014 was a good one, it struggled in fiscal 2015 with a nearly 5% drop in sales. Now it says it is working to “renovate its business” and set up a more “stable revenue source” structure.
2015 instrument sales: $557 million
One of two instrumentation companies based in England to make C&EN’s top 25 ranking, Spectris reported sales growth of 4% in 2015 for its materials analysis instrument business. The business consists of three companies: Malvern Instruments, PANalytical, and Particle Measuring Systems. Geographically, sales growth was driven primarily by North America and Europe. By market, sales to the academic sector declined, and those to pharmaceutical and fine chemicals customers increased, propelled by demand from biopharmaceutical and generic drug manufacturers. Regulatory compliance, which has been a strong growth driver in China, is now also a factor in India, the company says, because generic drug makers want to achieve the standards necessary to export their wares to the U.S.
2015 instrument sales: $499 million
Acquiring Sigma-Aldrich for $17 billion was a defining event for Merck KGaA in 2015 and the largest acquisition in its history. But because the deal closed late in the year, it had little impact on 2015 instrument sales within Merck Life Science, the new division that contains Sigma-Aldrich and Merck’s Millipore business. The nearly 12% growth Merck reported in sales of instruments such as spectrophotometers came almost entirely from positive currency exchange effects. In 2016, when Sigma-Aldrich’s sales are consolidated for the first time for a full year, a significant increase is expected, “further raising the importance of the life science business sector” in Merck’s operations, according to the company.
2015 instrument sales: $484 million
The hottest area for FEI, a supplier of microscopy systems imaging at the micro-, nano-, and picometer scale, has been at –196 °C. Cryo-electron microscopy, an offshoot of transmission-EM in which samples are studied at cryogenic temperatures, is becoming popular because it allows the analysis of many biological structures at near-atomic resolution. FEI has been collaborating with others on cryo-EM. Last February, FEI and Tsinghua University established an Asian training and research program for cryo-EM in structural biology. Recently, FEI formed the Cambridge Pharmaceutical Cryo-EM Consortium with five European drug companies and two British research institutions. A cryo-EM system for early-stage drug discovery is to be installed at one of the institutions, the University of Cambridge’s Nanoscience Centre. And FEI also has partnered with the contract research firm NovAliX, which will offer cryo-EM structural analysis services to drug industry customers. The firm’s instrumentation sales declined in 2015 largely because of currency effects. But business picked up in the last quarter and is expected to be strong in 2016, especially as life sciences customers adopt cryo-EM.
2015 instrument sales: $482 million
Biotechnology and health care are top priorities for Hitachi High-Technologies. The Japanese company says clinical chemistry, immunochemistry, genetics, microbiology testing, and DNA-related markets offer the best prospects for sustained growth. Hitachi’s science and medical systems division sells scientific instruments, electron and atomic force microscopes, and biotech and medical products. Instruments include ones for thermal analysis and spectrophotometry as well as more sophisticated chromatography and mass spectrometry systems. The company is creating Hitachi High-Tech Kyushu later this year to house part of its biotech and medical products business. The purpose of the move is to upgrade its production capabilities and improve operating efficiency across the entire Hitachi High-Tech group.
2015 instrument sales: $355 million
Consumers may know Olympus best as a maker of digital cameras, but its major business is in medical instruments, specifically gastrointestinal endoscopy equipment. In the life sciences arena, Olympus’s scientific solutions unit encompasses its heritage biological microscope business, where Olympus claims to be the global market leader with a 40% share. All three businesses are connected by technology for making lenses, including those attached to endoscope tips. Olympus recently restructured to emphasize its medical and scientific businesses, which are expected to grow, while shifting its imaging unit away from consumer cameras to more specialized products.
2015 instrument sales: $323 million
Although small, Oxford Instruments stood out among companies in C&EN’s annual ranking for its high rate of growth. In its fiscal year that ended March 2015, the company reported a nearly 17% increase in nanotechnology-related instrument sales, which includes the Asylum Research atomic force microscopy business. However, its industrial products business remained difficult to develop. In response, the company trimmed 7% of its workforce, or 160 people. It also closed six of its smaller sites: three in Europe, one in the U.S., and two in Asia.
2015 instrument sales: $290 million
Xylem Analytics accounts for 8% of the sales of Xylem, a $3.7 billion-per-year water technology and services company. The analytics business focuses on field, portable, online, and lab analytical instrumentation serving water, food and beverage, environmental, chemical, and pharmaceutical markets. Pieced together through small acquisitions over more than a decade—the largest being the 2010 purchase of lab-based water analysis firm Nova Analytics for $390 million—Xylem Analytics first appeared in C&EN’s ranking in 2011. Since then, its sales and ranking have shown little change.
2015 instrument sales: $284 million
During 2015, instrument sales at Switzerland’s Tecan rose nearly 7%, benefiting from development programs started in prior years and the introduction of new products. For life sciences customers, it launched a multimode microplate reader platform and new features for its one-year-old liquid-handling system. In late 2015, Tecan spent about $26 million to acquire Sias, a supplier of laboratory systems for liquid handling.
2015 instrument sales: $224 million
Scientific instrument sales were strong last year for Japan’s Horiba, especially to universities and other institutions in China. The yen’s depreciation against the dollar also resulted in an increase in sales in the Americas in yen terms. Scientific instruments account for just 16% of Horiba’s sales; the company also sells instruments and systems for testing in the automotive, process, environmental, medical-diagnostic, and semiconductor markets. Through investment and acquisition, Horiba seeks to enter other businesses, including water analysis and the life sciences.
2015 instrument sales: $203 million
Sartorius’s main business is in bioprocessing systems for fermentation, filtration, and purification. But its lab products and services division is a broad-based supplier of instruments, consumables, and services. These include its well-known lab balances—for which it ranks second in the world by sales after Mettler Toledo—pipettes, and water purification systems. Its customers are primarily in academia and in research and quality assurance laboratories in the pharmaceutical, chemical, and food industries.
2015 instrument sales: $166 million
Although it occupies the last position in C&EN’s ranking of top instrumentation firms, the Dutch firm Qiagen is a company to watch. Instruments are a small part of the diagnostic firm’s sales, but it is an emerging competitor in the next-generation sequencing market. After a strategic review in late 2015, Qiagen decided to invest in its NGS portfolio and increase support for its GeneReader NGS system, launched in late 2015 for the clinical market. According to the company, the GeneReader is the first complete “sample to insight” system that gives lab-actionable results, such as in cancer testing. Qiagen anticipates the system could drive double-digit growth in its NGS-related revenues, but stock analysts don’t expect sales until later this year.