Life Sciences Business (end-customer business)

Tecan is the market leader and a pioneer in laboratory automation. Tecan has offered 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 more than 40 years. In 2021, the Life Sciences Business segment represented 51% of total sales of the Tecan Group.

Sales in the Life Sciences Business increased by 18.7% to CHF 485.1 million (2020: CHF 408.8 million) and were 19.0% above the prior-year period in local currencies. In the first half of the year, the Life Sciences Business continued to see a strong revenue contribution from products supporting the COVID-19 response, mainly liquid handling and automation workstations. Demand for the associated disposable pipette tips continued at an elevated level throughout the year. The coronavirus pandemic has structurally reshaped many laboratory processes, leading to higher overall demand for automation in other application areas as well. As a result, segment sales also benefited significantly from a recovery in other areas, including liquid handling and automation workstations for various life science research applications, detection instruments and research reagents for next-generation sequencing (NGS). This trend was most evident in the second half of the year, as sales in other areas nearly offset the significant COVID-related sales in the second half of 2020. Thanks to this strong underlying performance, sales in the second half of the year decreased by only 2.0% in Swiss francs and 2.2% in local currencies.

Order entry in the Life Sciences Business was slightly below the prior-year period, but still exceeded reported segment sales in the fiscal year 2021.

Reported operating profit in this segment (earnings before interest and taxes; EBIT) rose by 32.7% to CHF 103.7 million (2020: CHF 78.2 million). The operating profit margin increased to 19.9% of sales (2020: 17.4%). This positive performance is primarily a result of sales growth, a favorable product mix and the operating costs that grew at a lower rate than sales.

• Launch of new variants of the Fluent® Automation Workstation to solve specific needs in key research and diagnostic applications
• Launch of FluentControl™ Scheduler to simplify automation of complex workflows
• Introduced important new reagent and digital offerings

In the Life Sciences Business segment, Tecan distributes its branded products through its own market organization and distributors in more than 70 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.

About half of these customers work in the field of life science research and applied markets. The other half of sales in this segment are generated from customers in the diagnostics market, for example large reference labs. During 2020 and 2021, with substantially increased COVID-19 clinical testing and high customer demand associated with the global pandemic, this share has increased substantially. 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 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, more flexible and user-friendly automation solutions continue to play a key role. The local sales organizations take into account the various needs and requirements of both customer groups.

Key application areas for the Life Sciences Business are:

• Genomics
• Protein analysis, particularly workflows of mass spectrometry
• Cell and tissue analysis
• These three applications are generally used in life science research as well as in regulated settings.

Within the Life Sciences Business, the largest instrument 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 if requirements go beyond the ordinary. Tecan is the global market leader in automated liquid handling platforms. 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. They are used as independent devices or integrated within the liquid handling workstations 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. Tecan’s offering includes instruments, special software packages and application expertise as well as consulting, service and consumables. 

In the three core application areas, Tecan increasingly offers complete solutions, i.e. not only instruments but also selected reagents and functional consumables.

This newly developed instrument configuration is intended to standardize pre-analytical sample handling and mixing. It is part of an ongoing collaboration with QIAGEN N.V. to optimize sample preparation for latent tuberculosis (TB) testing with the QuantiFERON-TB Gold Plus assay. Newly developed Tecan Piercing Tips™ allow to aliquot whole blood samples directly from vacuum blood collection tubes or septum-capped tubes – without the need for manual lid removal. This reduces the risk of laboratory staff coming into contact with infectious materials, and saves valuable time when performing tube-to-tube or tube-to-plate transfers and whole blood assays. The workstation also features the newly developed Tecan Tube Rotator™ – which provides 360-degree tube mixing to maintain whole blood samples in suspension without hemolysis.

Another market introduction in the key field of genomics was the Frida Reader™ for Fluent. 

It offers researchers the ability to quantify nucleic acids without sample loss. This unique solution performs UV absorbance-based quantification and purity assessment in a hanging drop, avoiding the consumption of rare and precious samples following nucleic acid purification (NAP).

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. However, in today’s busy labs, mission-critical decisions about laboratory equipment purchases, service contract renewals, consumables spending, and staffing are often made on the basis of incomplete information.

Why did a particular instrument run fail? Why are some protocols less efficient than others – or have more workflow errors? Why do similar tasks take longer to complete at different times of the day, or on different days of the week? To optimize instrument uptime and increase throughput, labs need to get to the root of such questions and identify underlying causes. Historical instrument usage patterns may highlight capacity gaps, helping to deploy resources more effectively, and improve troubleshooting.

To help laboratories to increase their productivity with unparalleled insights, Tecan offers Introspect™.

Introspect is an easy and secure cloud-based reporting and analysis service. Data from connected automation workstations are displayed on intuitive dashboards with real data on instrument uptime, consumables consumption and run success rates. Introspect completely replaces manually maintained spreadsheets, it automatically gathers instrument runtime, consumables usage, error rates and more, directly from Freedom EVO® or Fluent systems. Even historical and archived instrument data can be uploaded which allows a lab manager to study past data to make informed decisions possible for the future. 

These capabilities proved to be essential for large testing facilities during the corona virus pandemic to keep their fleets of PCR systems running at maximum capacity.

New offerings in Tecan’s growing digital ecosystem include the FluentControl Scheduler for the Fluent Automation Workstation. The FluentControl Scheduler is a new software that offers a number of features designed to simplify day-to-day laboratory automation for significantly increased throughput and workflow efficiency, streamlining workflows for laboratories that run various assays and processes in parallel.

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 already one of the world’s largest healthcare markets, even though the country’s 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 already been active in China for a number of years, and since 2008 through its own subsidiary. 

In China, laboratories in the largest hospitals 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 or biopharma research. For example, in early 2022, 32 units of the Fluent platform were delivered to a Chinese customer active in the innovative field of synthetic biology.

In order to exploit the various end markets in China, Tecan is continuing to invest heavily in expanding its marketing and service organization. From a commercial headcount perspective, China already is the second largest local organization for Tecan. A larger direct market presence should lead to a further significant increase in sales in China in the coming years.

Tecan maintains a distributor network in many other countries. During the Corona pandemic, these distributor relationships were deepened and will be further expanded in the future. In some countries, Tecan will also open its own subsidiaries in order to develop the market even more intensively.

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. For example, since an acquisition in 2016 Tecan can offer dedicated instruments in the area of sample preparation for mass spectrometry, which are increasingly being used for automated solid phase extraction. Automated solid phase extraction with positive pressure workstations offers many advantages compared with conventional vacuum-based purification. Ultimately, better-purified samples can produce higher-quality analytical results that, thanks to automation, are not dependent on the individual user. To enable all process steps of a workflow to be automated, it is also possible to integrate the Resolvex A200 positive pressure workstation in Tecan’s liquid handling workstations. 

Also in other application areas like genomics, Tecan is developing new dedicated workstations to fully automate specific workflows. Shortly after the acquisition of Tecan Genomics in September 2018 (formerly NuGEN Technologies), Tecan launched the DreamPrep NGS, a fully-automated approach to next-generation sequencing (NGS) library preparation for research use. 

lifesciences.tecan.com/ngs-sample-preparation

This groundbreaking new approach offers quality controlled, sequencing-ready NGS libraries in just a matter of hours, with minimal manual interaction and no sample loss. DreamPrep NGS is a full walkaway solution that combines the Tecan Fluent liquid handler and Infinite plate reader, together with DNA and RNA library preparation kits. The use of this innovative solution can help double the typical sample throughput in a laboratory.

The offering of dedicated workstations was expanded in 2020 with the launch of the DreamPrep NAP to further drive the comprehensive genomics strategy. DreamPrep™ NAP is an integrated, fully automated solution simplifying nucleic acid extraction workflows for many genomic applications. It combines the high productivity and precision of the Fluent automation platform with a Tecan reader for integrated quantitation and normalization. During 2020, the DreamPrep NAP also helped labs quickly and effectively scale up COVID-19 testing to accommodate larger test volumes.

The third vector focuses on expanding recurring revenues in Tecan’s two main markets, life science research and in-vitro diagnostics. Traditionally, Tecan participates in the aftermarket with consumables as well as service and spare parts. Since several years, the Company also supplies reagents and functional consumables for select applications so as to be able to offer fully integrated solutions as well.

During the coronavirus pandemic, the disposable pipette tip business saw a substantial increase in demand due to COVID-19 testing. As a result, overall recurring sales of services, consumables and reagents in the Life Sciences Business amounted to about 53% of total segment sales in 2021.

As part of the company’s strategy, Tecan is increasingly seeking to provide comprehensive solutions in the areas of specialty diagnostics and life science research as part of the Life Sciences Business, including the reagents or functional consumables used during specific applications. This range of solutions open up new markets for Tecan, without competing with the typical in-vitro diagnostics customers in Tecan’s Partnering Business.

Tecan made the first step in this direction with the acquisition of IBL International in 2014. 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 microtiter plate-based immunoassays for specialty diagnostics. 

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.

With the acquisition of the US-based SPEware Corporation (Tecan SP) in 2016, Tecan expanded its offer of dedicated total solutions to sample preparation solutions for mass spectrometry.

The separation of a target analyte from a complex sample before it can be introduced into an LC-MS improves the robustness of the assay, and the improved purification of the samples enables longer maintenance intervals. The proprietary, microparticle-filled consumables for enrichment of a substance for the solid phase extraction offer significant advantages, including higher selectivity, reproducible separation and improved data quality. 

In 2018, Tecan acquired NuGEN Technologies (now Tecan Genomics) to further expand the Company’s dedicated solutions offering into the new market segment of next-generation sequencing (NGS). Tecan now provides innovative genomic sample preparation for NGS and microarrays for a broad range of sample types including RNA and DNA from whole tissues, preserved and prepared tissue samples (FFPE, Formalin-Fixed Paraffin-Embedded), single cells and liquid biopsies such as from blood samples. 

lifesciences.tecan.com/ngs-library-prep-reagents-product-overview-new

Next-generation sequencing technologies are currently transforming the life sciences, e.g. the field of cancer research, due to the wealth of genetic information obtained. 

NGS workflows are composed of multiple complex steps, several of which need to be performed prior to loading samples in the actual sequencer. The most critical step prior to sequencing is the so called library preparation, in which many samples are processed in parallel and its correct performance is key to match the individual DNA sequences with the respective samples again after sequencing. The quality of prepared libraries has a significant impact on the sequencing process, the reproducibility and usability of the data and thereby ultimately on the overall data quality. With large numbers of samples being processed, library preparation can actually cost more than the sequencing itself.

Costs associated with NGS overall are dropping, making the technology more affordable and widely accessible. A higher adoption of NGS and fast growing sample numbers increase the need for automation, a particular strength of Tecan, especially in the genomics area. With automation, labs can increase the throughput and eliminate unnecessary manual steps and sources of error.