Life Sciences Business
LIFE SCIENCES BUSINESS1(CHF million)
LIFE SCIENCES BUSINESS(CHF million)
LIFE SCIENCES BUSINESS(in % of sales)
SALES BY PRODUCTS
SALES BY REGIONS
In the second half of the year, sales in the Life Sciences Business increased by 12.7 % in local currencies and were 7.5 % above the prior-year period in Swiss francs. On an organic basis, sales in local currencies grew by 11.3 %. Sales for the full year totaled CHF 253.0 million, representing an increase of 11.8 % in local currencies and 7.1 % in Swiss francs over the prior-year period (2014: CHF 236.3 million). On an organic basis, sales increased by 6.7 % in local currencies in 2015. The newly launched Fluent and Spark platforms contributed considerably to this growth. Also, order entry in the Life Sciences Business was strong overall and organically and exceeded sales.
Operating profit before interest and taxes (EBIT) in the segment increased to CHF 45.4 million in the year under review (2014: CHF 40.2 million). The increase is primarily the result of the higher sales volumes and lower research and development expenses. The EBIT margin grew to 17.0 % of sales (2014: 16.3 %).
Tecan is the market leader and a pioneer in laboratory automation. Tecan has been offering a wide range of laboratory instruments and automated workflow solutions for use by pharmaceutical and biotechnology companies, government research institutions and universities, diagnostic laboratories, and scientists from numerous applied markets for over 35 years. In 2015, the Life Sciences Business segment represented 57 % of total sales of the Tecan Group.
Highlights of 2015
- Launch of additional features and applications for the Fluent™ laboratory automation family, Tecan’s next generation liquid handling platform in the Life Sciences Business
- Launch of the all-new Spark™ 10M multimode microplate reader platform for cell biology and genomics customers in the Life Sciences Business
Markets and Organisations
In the Life Sciences Business segment, Tecan distributes products through its own market organization and distributors in more than 50 countries worldwide. Sales and application specialists communicate with end customers to discuss their various requirements in terms of automating highly diverse laboratory procedures, while service engineers as well as a help desk and expert-line specialists work to ensure a high degree of customer loyalty and satisfaction.
Most of these customers work in the field of life science research and applied markets. Around one-third of sales in this segment are generated from customers in the diagnostics market. Customers in the fields of research and diagnostics place various requirements on products and the sales process. The diagnostics market is strictly regulated by national supervisory authorities and each automation solution is used only within a clearly defined area of application. Product features such as instrument reliability, quality and reproducibility of test results as well as user-friendliness are extremely important. And in the area of research, highly innovative, flexible and user-friendly automation solutions continue to play a key role. We take the various needs and requirements of both customer groups into account with separate management and local sales organizations geared specifically toward both groups.
Within the Life Sciences Business, the largest product group is the scalable liquid handling platforms, which are used to pipette fluids with optimum precision and automate laborious and repetitive manual procedures. These platforms can be configured from the wide-ranging portfolio of available modules and devices to provide a high degree of flexibility and easy adaptability for a diverse range of applications. Highly complex customized offerings are also provided to a smaller group of customers. Tecan also provides a wide range of bioanalytical instruments such as microplate readers and washers, which allow reactions to be monitored or specific analytes to be measured and are used as independent devices or integrated within the liquid handling platforms to ensure a complete customer solution. Tecan also works with numerous partner companies to integrate their test procedures or devices to provide comprehensive workflow solutions. Such workflow solutions include instruments, software packages and special application expertise as well as consulting, service and consumables. Tecan is continuing to show strong growth in its consumables business. New, value-added products that have been launched in recent years are the driving forces behind this growth.
IBL International, acquired by Tecan in 2014, is a leading provider in the field of microtiter plate-based immunoassays, with one of the widest ranges of tests for specialty diagnostics to be used in research and clinical laboratories. This enables Tecan to leverage its automation expertise and leading position within the immunoassay market for open instrumentation platforms and combine dedicated instruments with one of the widest ranges of immunoassays for specialty diagnostics.
The corporate strategy pursues three vectors to ensure sustainable profitable growth. The company’s specific strategies allow it to drive forward customer projects with the respective business models of the two business segments.
Expanding the core business
In the Life Sciences Business the market leading position will be further increased and market share gained through launching new products and expanding geographically.
Launch of new products
The introduction of two main platforms marks the beginning of a new product cycle, in both liquid handling and detection. Further launches are set to follow.
Fluent®: Simplicity – Productivity – Confidence
In June 2014, after years of development, Tecan launched the Fluent® Laboratory Automation Solutions product family as the latest addition to the Company’s extensive portfolio of liquid handling solutions for laboratory automation. Fluent is a unique automation concept that provides high precision, superior throughput and extended walkway time. Employees in the laboratory can get more done, with greater confidence in the results. Completely new from the ground up, it is available in three sizes to suit the throughput requirements of almost any laboratory.
High-definition liquid handling ensures precision and accuracy over a wide range of volumes, from sub-microliter to several milliliters. The patented Adaptive Signal Technology™ detects even small volumes of liquid with precision, allowing for the use of smaller reagent and sample volumes for significant cost savings. The patented Dynamic Deck™ uses a modular, multilevel design to offer exceptional deck capacity.
FLUENT® LABORATORY AUTOMATION SOLUTIONS
Liquid handling and labware logistics have never been easier, thanks to the instrument’s three, task-specific arms, which operate simultaneously to ensure timely completion of assays, minimizing the time cells spend outside of the incubator. Perfect coordination of the robotic arms is achieved by the platform’s Path Finder® move optimization technology, which continuously adapts to the changing topography of the workdeck, avoiding the need for laborious programming of individual arm movements, helping to accelerate both set-up and routine system use.
The platform’s intuitive FluentControl® software and built-in touchscreen interface simplify day-to-day activities by guiding scientists through routine set-up and operation of the system for consistent, reproducible operation.
Fluent was developed around the application-specific needs of laboratories. The Fluent solutions that have already been introduced address the need for automation in the rapidly growing cell biology market, compound management and genomics.
Spark® ignites productivity in the lab
At the beginning of 2015, Spark® 10M marked the introduction of a new generation of the reader platform to the second main product line – detection instruments. The Spark® 10M multimode microplate reader is designed to offer greater flexibility and increased productivity for cell biology and genomics customers. The all-new platform delivers a combination of exceptional capabilities and ease of use to simplify routine laboratory tasks. At the heart of the Spark 10M is a unique optics module that ensures that laboratories no longer have to make a trade-off between flexibility and sensitivity. Integrated capabilities for cell counting and incubation simplify cell biology protocols, while ultra-fast scanning – in under five seconds – allows for rapid application analysis in the field of genomics. Tecan has introduced a number of new exciting features during the year for the Spark 10M.
At the beginning of 2016, Tecan has launched the new Spark 20M multimode microplate reader which offers solutions to suit virtually any drug discovery or advanced research application. The unique Fusion Optics, enables unparalleled sensitivity, speed and flexibility. Options include the newly developed Te-Cool™ cooling module that uniquely allows the measurement chamber temperature to be set below the ambient room temperature for more accurate and reliable results. The Spark 20M’s cell handling capabilities have also been extended, with a new automated cell imaging and confluence measurement feature. This allows incubation and monitoring of cell culture microplates within the measurement chamber.
Products with a high level of user-friendliness and application focus
Modern laboratory automation increases sample throughput in a laboratory, minimizes human error, enhances precision, delivers reproducible test results, documents these results and thus improves productivity as a whole in the laboratory. The currently available solutions are technically able to automate most highly complex processes; however, they are often complicated to use, meaning usage is limited to a small expert group within the laboratory. User-friendliness is therefore one of the most important benefits for customers, in addition to existing technical differences in the precision and reliability of the system. Tecan is renowned for its user-friendly solutions and has increased its focus on this area.
Automation solutions have already been introduced that, for example, fully automate sample preparation for gene sequencing (next-generation sequencing) and mass spectrometry. Both areas are among the fastest-growing applications in life-science research.
Opening up global growth markets
Many countries are currently investing considerable amounts in healthcare and life science research. Tecan is focusing in particular on expanding its business in China, which is now the world’s fourth largest healthcare market, although its spending per capita is still only a fraction of that in many western industrialized countries. Continuing economic growth combined with rising spending per capita make this an extremely attractive market. Tecan has been active in China for a number of years, and since 2008 through an own subsidiary. In recent years, average sales have grown markedly. Tecan is, for example, the market leader in liquid handling platforms for the largest hospitals (class 3). The laboratories use Tecan platforms to test blood samples for infectious diseases, for instance. The number of the largest hospitals is constantly growing, along with patient numbers and utilization. The corresponding rise in diagnostic test volumes is increasing the need for efficient automation.
Large investments are also being made in laboratory infrastructure in the area of academic research. According to estimates, government funding already accounts for half of the budget of the National Institutes of Health (NIH) in the US. It is assumed that government funding in China will exceed that in the US by as early as 2020.
In order to exploit the various end markets in China, Tecan is continuing to invest heavily in expanding its marketing and service organization. A larger direct market presence should lead to a further considerable increase in sales in China in the coming years.
Building up further pillars in the instrument market
Tecan is aiming to build up further pillars in the instrument market for life science research. This applies in particular to areas beyond conventional, open and flexible robotics solutions for liquid handling and microplate readers. There are plenty of opportunities here, especially in dedicated instruments for sample preparation. In adjacent markets, Tecan sees opportunities to extend its traditional core business so as to grow faster than the overall markets for life science research instruments. This potential can be accessed both organically and through acquisitions.
Expansion of recurring revenues
The third vector focuses on expanding recurring revenues in Tecan’s two main markets, life science research and in-vitro diagnostics. The Company wants to supply reagents and consumables for both markets so as to be able to offer fully integrated solutions.
IBL International is a leading Company in the field of microtiter plate-based immunoassays, with one of the widest ranges of tests for specialty diagnostics to be used in research and clinical laboratories. Tecan has a long tradition when it comes to immunoassay instruments for clinical diagnostics. Microtiter plate-based immunoassays are a growing market with a large and increasing number of tests for medical specialities, a market segment generally outside the scope of large in-vitro diagnostic companies and therefore outside the focus of Tecan’s typical Partnering Business customers.
The product portfolio comprises enzyme radio and luminescence immunoassays for research and clinical laboratories, including a large selection of specialty assays for endocrinology (hormone measurement), neurodegeneration (e.g. Alzheimer’s disease), neonatal screening and assessing steroid hormones in saliva.
Although the number of different specialized tests is large andgrowing, only a smaller number of each single test is processed by laboratories each day (high mix/low volume). New tests for such medical specialities are usually developed using proven immunodiagnostic technologies and first introduced in a microtiter plate format. In this growing segment, there is an increasing need for an integrated instrument and reagent offering. End-users would greatly benefit from less complex, user-friendly automation with lower throughput and which is pre-configured with certain reagents.
Automated microtiter plate processing of immunoassays is a traditional stronghold of Tecan in the in-vitro diagnostics market. Tecan can now leverage its automation expertise and leading position within the immunoassay market for open instrumentation platforms and, in future, combine dedicated instruments with one of the widest ranges of immunoassays for specialty diagnostics.
EXPANSION OF RECURRING SALES WITH PLASTIC CONSUMABLES
In the year under review, Tecan generated 14 % of sales in the segment with plastic consumables. The share of these recurring sales is to be further expanded. Pipette tips, which are used with liquid handling platforms, account for the largest proportion of consumables. Tecan supplies several hundred million pipette tips per year. The use of high-quality consumables improves data quality and ensures that test results are reproducible. They are a key part of the validated workflow solution in diagnostics.
Tecan is continuously expanding its product offering in the area of plastic consumables and benefits from the broad base of existing installed instruments. Tecan is also increasingly launching consumables that contribute even greater value to the workflow solution. One of the first products of this kind is the AC Extraction Plate™. This extraction plate, with the inner surface of each well coated with a special technology, was developed to make it possible to easily automate sample preparation for mass spectrometry. The proprietary TICE™ (Tecan Immobilized Coating Extraction) technology enables extraction of low molecular weight analytes such as vitamin D or testosterone for subsequent analysis with a mass spectrometer. The AC Extraction Plate eliminates numerous laborious and difficult-to-automate process steps.