Tecan not only provides end customers with automation solutions, but is also a leading developer and manufacturer of OEM instruments and components which partner companies sell under their own name. Tecan has been operating its OEM business since the Company was founded over 35 years ago – parts of the business within today's Group can even look back on 40 years of history. The share of this segment in the total sales of the Tecan Group was 45% in 2016.

• Significant increase in serial production, particularly with respect to the platform family for the ORTHO VISION™ Analyzer for Ortho Clinical Diagnostics
• Induction of the new colleagues from Sias AG, which was taken over at the end of 2015, as well as the integration of the Sias product lines as an integral part of the Partnering Business

In the Partnering Business, Tecan manages corporate customers, who are mainly diagnostics companies, centrally via Key Account Management. Employees in Europe, North America and Asia ensure the local management of existing customers and support the acquisition of new customers. There are direct sales employees in the individual national markets for the components business.

In the components business, Tecan supports instrument manufacturers with essential components where they want to develop an instrument themselves. By contrast, in the instruments business, Tecan takes over the development of the entire system, which it then manufactures under contract.

In the Partnering Business, Tecan benefits from diagnostics and other life science companies outsourcing instrument development, either entirely or for specific parts, to specialists like itself. This enables these companies to focus on developing diagnostic or research-related tests. In recent years, this trend has been accelerating. OEM customers benefit from Tecan's extensive technology experience in a wide range of instruments and modules in the area of laboratory automation. By outsourcing instrument development, customers are able, among other things, to shorten the time to launch while also gaining access to Tecan's innovative technologies.

Tecan has a wide range of products. The Company supplies various well-known diagnostics instruments in the OEM business and serves several hundred customers with components.

Tecan is the market leader in laboratory automation liquid handling components. The Company supplies laboratory instrument manufacturers with essential components such as precision pumps, valves, robotic arms and development software. They are used in systems that have a wide range of applications in life science research, diagnostics and numerous other industries. In customers' product ranges, Tecan components generally remain an indispensable element over the entire life cycle of a device. For example, Tecan supplies manufacturers in the fast-growing area of next generation sequencing with the Cavro® XMP 6000 Multi-Channel Pump for precision handling of fluids in different sequencers.

Rapid market launch and low development costs are key for some OEM customers. In these cases, Tecan can adapt the products and platforms it develops for its own end customers to the specific needs of OEM customers. These adapted and standardized platforms are then distributed under the customers' own brand name as system solutions that combine Tecan's instruments with the partner's own specific tests. The modular Sias platforms have proven to be an ideal addition to Tecan's range of existing automation solutions, as they are particularly suited to applications with a low to medium throughput. Detection instruments from Tecan can also be modified or integrated into fully automated laboratory solutions for OEM customers. 

One example of this type of platform-based automation solution is one of the world's most successful molecular diagnostic platforms. It is marketed by the partner as a system solution jointly with a wide range of different molecular diagnostic tests. Applications include, for example, therapy monitoring in HIV or hepatitis patients and detection of sexually transmitted infections. 

When an OEM customer is looking for a specific product, designed and manufactured to a specific functionality and cost, a dedicated system development can be the answer. Dedicated systems are usually most appropriate for products with a longer life cycle and when the specific functionality and total cost-of-ownership are the key decision criteria. By choosing to partner with Tecan, OEM customers get access to the Company's full range of technologies, modules and software solutions as well as its expertise in system integration and regulatory and quality-related processes. 

The corporate strategy pursues three vectors to ensure sustainable profitable growth. Tecan's specific strategies allow it to drive forward customer projects with the respective business models of the two business segments.

In the in-vitro diagnostics market, some of the instrument development and production will be outsourced to specialists like Tecan. In this addressable market share, Tecan, through its Partnering Business, is the partner of choice in automation systems for many companies in the in-vitro diagnostics industry. Tecan supports these partners with their regional product launches of new instruments – developed and manufactured by Tecan – and the associated ramp-up in serial production.

Tecan has a broad base of OEM customers and is continuously increasing the number of supply agreements. The supply of new instruments generates additional sales stepwise, building on the established base. This enables Tecan to grow more rapidly than the market. 

Numerous customers are also developing instruments incorporating innovative Tecan components as elements. When serial production of these instruments begins, it will result in higher volumes of the components being required and therefore higher sales for Tecan. 

Dako Omnis, a platform for automated advanced staining which is used in tissue-based cancer diagnostics, is one example of a ­dedicated automation solution. The system automates both ­established processes in the diagnosis of abnormal cells: immunohistochemistry (IHC) and in-situ hybridization (ISH).

Dako Omnis produced by our partner Dako – an Agilent Technologies company – offers full automation and fulfils the requirements of large diagnostic laboratories, hospitals and universities. It offers continuous loading with individual samples or batch loading, as well as the option of leaving the system to run overnight. It therefore sets new standards for what customers can expect from an automated platform with regard to flexibility, capacity, efficiency and traceability of samples. 

The ORTHO VISION™ Analyzer is a next-generation diagnostics instrument used for blood typing and to determine other important blood parameters. The device was developed by Tecan for Ortho Clinical Diagnostics, a market leader in immunohematology, and was launched in the first regional markets in 2014. The ORTHO VISION™ Analyzer heralds a new era in transfusion medicine, with Responsive Automation. ORTHO VISION™ Max is another variant of the instrument for transfusion medicine laboratories and has a high sample throughput. Innovative monitoring technologies and control mechanisms give transfusion medicine professionals the ability to track every critical process step. In addition, laboratory personnel can react at any time to ever-changing conditions within the laboratory and unpredictable requirements. For example, particularly urgent cases can be rapidly processed by loading into the ORTHO VISION™ Analyzer on the fly, allowing for prioritization. 

The year under review saw a significant increase in the serial production of products from the ORTHO VISION™ Analyzer platform family. In January 2017, Tecan's partner Ortho Clinical Diagnostics announced that it had installed over 1000 instruments around the world.

In preparation for launch on the market, work also began in the year under review on the serial production of the Sgx Clarity™ system for partner company Singulex. Based in Alameda in the US state of California, Singulex operates in the field of immunodiagnostics and develops new methods that are based on Single Molecule Counting (SMC) technology. Thanks to the ultra-sensitive SMC technology, acute heart attacks and the onset of clinical symptoms, for example, can be prevented. Working in collaboration with Singulex, Tecan has developed the Sgx Clarity™ system in just three years.

Tecan has acquired a wide range of new customers for platform-based solutions over the past few years; these will contribute to sales growth in the years ahead. Furthermore, the company has a pipeline that is well filled with potential new projects and is currently discussing a range of projects with potential partners. Numerous customers are also developing instruments incorporating innovative Tecan components as elements. Other customers have already started serial production of new devices, resulting in the supply of higher volumes by Tecan. 

For 2017, Tecan anticipates starting and expanding serial production for a wide range of instrument customers.

As in the Life Sciences Business segment, significant market potential is also presenting itself to Tecan in the Partnering Business in China. Sales have increased disproportionately in this region in recent years. Local device manufacturers are increasingly integrating Tecan components in various areas of application to ensure the necessary instrument quality and reliability. The first of these instruments have already been granted marketing authorization, and are now being manufactured in larger quantities. Furthermore, Tecan is also increasingly supplying Chinese diagnostics companies with entire instruments. 

In the Partnering Business segment, Tecan mainly supplies diagnostics companies with instruments and components. Further pillars in the instrument market for life science research should therefore only be built up in the Life Sciences Business segment.

The third vector focuses on expanding recurring revenues. Support for OEM customers in the Partnering Business segment will not end once instrument development is finished. Tecan also offers OEM customers a range of services after the product is launched via its global service infrastructure. The Company can install instruments directly at the end customer's location, provide a helpdesk facility, train the OEM customer's service team and even handle the complete service portfolio for devices itself. In addition, Tecan maximizes instrument operation time by providing a global spare parts service.

OEM customers in the diagnostics market may benefit from Tecan's high-quality consumables such as certified pipette tips, which are an important component of a validated workflow solution. Only high quality consumables can help ensure a high level of quality and reproducibility in tests. Thanks to the growing number of installed devices in recent years, this business posted high growth rates.

Tecan is also focusing increasingly on developing proprietary, patent-protected technologies. One example is the innovative eFluidics™ technology concept which is being implemented using a new type of consumable. eFluidics™ is an alternative liquid handling technology based on electrowetting, which can manipulate fluids by altering the electrical field.