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Movers And Shakers

Behind a banner year at Waters

New CEO Udit Batra seems to have helped the instrumentation firm get the most out of a good year for its pharma customers

by Craig Bettenhausen
November 7, 2021 | A version of this story appeared in Volume 99, Issue 41

Researcher or scientist running experiment on Andrew+ and Xevo G2-Xs QTof System at Immerse Lab
Credit: Waters
Waters’s collaborative lab space at the University of Delaware will build on its Immerse Cambridge facility outside Boston, shown here.

When a company’s stock price doubles over the course of a year—and during a global pandemic, no less—something must be going right. And when the company is the instrument maker Waters, it’s tempting to tell a simple story: in September 2020, the firm lured Udit Batra from a senior post at Merck KGaA to be its CEO.

Waters at a glance

Headquarters: Milford, Massachusetts

2020 sales: $2.4 billion

Employees: 7,400, with 1,112 in R&D roles

Businesses: Liquid chromatography, mass spectrometry, thermal analysis, rheometry, and calorimetry instruments. Markets are pharmaceuticals (59% of sales), other industries (30%), and academia and government (11%).

Over the ensuing 12 months, Waters’s stock went from $212 to $417 per share, the biggest increase in the instrumentation industry, after years in which Waters lagged the field. The firm’s profit in the first 9 months of 2021 was 39% higher than in 2020, and sales were up 23%. Rock star CEO. Done, next article.

A closer look reveals a more nuanced narrative. With a leading presence in quality assurance and quality control (QA/QC) instruments and consumables for the drug industry, Waters was in an excellent position to thrive during one of the largest medical research, development, and deployment efforts in human history. Many of the firm’s competitors—in its core business of liquid chromatography (LC) and mass spectrometry (MS) as well as to its TA Instruments brand of material characterization instruments—also had banner years.

Batra doesn’t claim to be a knight in shining armor, but he’s also not shy about sharing the areas of improvement he’s identified at Waters and the progress he and his team have made in addressing them. Company veterans and outside observers say that Batra deserves credit for at least some of the gains in the past year and that he’s setting Waters up for continued success.

One change is a greater emphasis on external partnerships. Waters has long focused on organic growth, building business through R&D and internally developed products, while competitors such as Agilent Technologies and PerkinElmer supplement internal efforts by acquiring smaller analytical tool firms. Batra says organic growth is still the number 1 priority, but the firm has evaluated 9,000 possible acquisitions over the past year. He’s also open to partnerships that let Waters do something no one else is doing.

For example, analytical tools to support biotech methods of drug development and manufacturing are a natural outgrowth of Waters’s strength in QA/QC, Batra said at a recent investor event. But it isn’t an area that the company can enter alone.

To this end, on Oct. 20, Waters unveiled an R&D partnership with the University of Delaware on analytical characterization of biologic drugs during manufacturing. Six days later, Waters announced a deal to integrate its BioAccord LC/MS with the Ambr bioreactor system from the bioprocessing equipment maker Sartorius.

Waters has collaborated plenty in its 63-year history, but Batra has brought a new perspective, according to John Gebler, the firm’s director of biopharma strategic growth. “Those bioprocessing companies will admit to us they’re not experts in analytics. And we’re not experts in bioprocessing; that’s not what we sell,” Gebler says. “Udit has brought this opportunity for us to collaborate and partner in a very meaningful way.”

As exemplified in the Sartorius deal, Batra and Gebler are working to place instruments in bioprocessing labs and plants instead of just having them at a customer’s centralized MS lab. That shifts instrument and interface design priorities, because bioprocessing users are typically not mass spectrometrists, Gebler says.

Researchers and technicians “at line” in a development or manufacturing lab aren’t inclined to tinker in the guts of an instrument. “They want to use the instrument as a tool for them to get their job done,” Gebler says. “Under the hood, you need to have extraordinary sophistication to make that happen.”

Another shift in strategy since Batra took over is that Waters will no longer shy away from cannabis, a fast-growing market for analytical technologies. “I know that we are moving so we can play in that marketplace,” Gebler says.

Batra is also overhauling the company’s performance management system and realigning its sales team to make better use of e-commerce and data Waters has on older instruments ready for replacement. “We lost track of that sort of customer,” Batra says, but now the team is a third of the way through a backlog of 8,000 instruments that are past their normal 5-to-7-year replacement cycle.

“Waters has been a leader in the industry, right? It had occupied the pole position for a long time, and then we just fell off,” Batra says. Shortcomings included internal business practices that needed reform, a loss of focus on the company’s core expertise, and missed opportunities in new customer categories such as contract research and manufacturing.

Batra says employees at all levels have been receptive to what he wants to do. “When we started to talk about how to kind of get back to the podium, I said, ‘Let’s throw a stone.’ They said, ‘Let’s throw a brick.’ There was no resistance.”

Udit has brought this opportunity for us to collaborate and partner in a very meaningful way.
John Gebler, director of biopharma strategic growth, Waters

Glenn Cudiamat, CEO of the market research firm TDA Research, says Batra’s subject-matter expertise has helped him get the company behind such changes. Batra has a PhD in chemical engineering and has worked in labs and management at Johnson & Johnson, Novartis, and Merck KGaA. He’s as comfortable talking with technical experts as he is with executives. Cudiamat says that credibility has helped Batra win the support of Waters’s staff.

That said, since he started as CEO, four of the eight members of Waters’s executive leadership team are new or in new roles. Cudiamat says scientific instrumentation firms are seeing a lot of turnover, which can cut both ways. It’s a balance between retaining culture and institutional knowledge and making room for new talent. “I feel like he’s doing it exceptionally well,” Cudiamat says of Batra.

With the demand boost due to the pandemic, Batra has the benefit of leading Waters during a time of expansion for the products it sells. TDA predicts growth this year of 15% in the high-performance liquid chromatrography (HPLC) and LC/MS markets, 13% in thermal analysis and rheometry, and 22% in analytical technologies for bioprocessing. Batra says that as things return to normal, 7% annual sales growth is a sustainable target for Waters.

There’s still work to do if Waters is to repeat its success of the past year. For example, Batra says, the firm needs to get better at business support, such as product launches, for its scientific achievements. “I feel very excited to be in the company, where we have a strong financial base and a lot of freedom and a lot of support from the board to do these things,” he says. “And we are open for people who want to join us and help us with this journey.”


This article was updated on Nov. 17, 2021, to change the photo. The original photo’s caption said the three scientists pictured were in Waters’s Immerse Cambridge facility outside Boston. They were actually in a lab in Milford, Massachusetts, near the company’s headquarters. The new photograph does show the Immerse Cambridge lab.


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