Invitrogen doubles its profits during Q1
recorded in the first-quarter of 2007.The maker of kits used for
cloning enjoyed growth, driven by sharp increases in sales for drug
discovery and research.
The results buck an ongoing trend amongst laboratory suppliers, many of whom are feeling the effects of decreased spending by big pharma as well as increased competition, particularly in the genetic testing and research sector. "The large pharma end market is experiencing some challenges at the moment but this has not affected us," commented CEO Greg Lucier. "More significantly, a great deal of development has been shifting to the smaller, more efficient biotech sector … so; any contraction in the pharma market is far outweighed by the robust growth we're seeing in biotech." Invitrogen's latest results seem to back up this claim, posting a net income of $59.7m - a hefty increase from the $29.9m posted a year ago. Revenue too rose to $350.2m, up 13 per cent or 7 per cent excluding the foreign currency impact and acquisition costs. Analysts have attributed this encouraging bottom line to improved profit margins, share buybacks and lower taxes. So much so that the Carlsbad, California-based company did better than the $334.5m in revenue analysts had been predicting. Looking ahead to full-year 2008, the company said that revenue growth was expected, 'in percentage terms to be in the high single digits.' This is up from a previous forecast for mid-single-digit growth. Invitrogen also raised its 2008 earnings outlook, and now expects adjusted earnings to increase by 1.5 to two times the rate of revenue growth. Despite the current economic climate, Invitrogen's interest in its markets continued to be stable. Posted revenues for Invitrogen's BioDiscovery unit were up 12.3 per cent to $247.3m. Its Cell Culture Systems unit increased 16.1 per cent to $102.9m. During a company conference call CFO David Hoffmeister said BioDiscovery's organic growth (7 per cent) was motivated by increased prices, new product introductions, and improved volumes, particularly in molecular biology products, drug discovery services, and labelling and detection technologies. R&D expenses rose 11.7 per cent to $30.6m from $27.4m for 2007. SG&A costs increased 16.4 per cent to $113.7m compared to 97.7m last year. Invitrogen finished the first-quarter with $549.1m in cash and short-term investments. One such investment occurred in January of this year, when Invitrogen purchased a manufacturer of liver cell products that could be used to test a drug's potential toxicity and so avoid costly clinical failures. The firm paid $57m for CellzDirect, currently based in North Carolina. The acquired firm specifically specialises in hepatocyte-based cell products and related services to predict a compounds effects on metabolism in the liver.
