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Jan 9, 2013

J.P. Morgan Buzz: January 8, 2013 Update

  • GEN's editor-in-chief John Sterling is on the scene at the J.P. Morgan Healthcare Conference currently going on in San Francisco. Here are some of his highlights from Day 2 of the meeting:

    James Foster, long-time president and CEO of Charles River Laboratories, reported that his company's early stage drug discovery and preclinical projects have actually grown 20% In academic and government lab markets, just the opposite of what a number of other speakers described as soft markets. A big change, according to Foster, is that CRL now works with clients all the way from drug discovery through the preclinical stage rather than just being involved in a small section of this entire process. A huge shift and accompanying growth is taking place in the non-GLP drug discovery business, especially in oncology and CNS disorders. He said the drug discovery service business totals $6–8 billion. Endotoxins testing and microbial detection are the fastest growing segments in the area, he'd added.

    Foster said an inflection point has been reached in that pharma companies and large biotechs are under huge pressures to reduce costs. Hence, increasing numbers of these companies are outsourcing their work to firms like CRL. So, to meet this need and to complement its own current portfolio of services, CRL acquired Accugenix last year to boost its endotoxins and microbial detection capabilities. And just this week CRL completed its acquisition of Vital River, which provides research models (animal models) and services in China, one of the world's most rapidly emerging biotech markets. According to Foster, additional acquisitions might be on the way.

    Also, Bill Sullivan, CEO of Agilent, told the J.P. Morgan audience that Agilent's main focus is to become the top firm in measurement science. Pointing out that Agilent is already number one in liquid chromatography and number three in mass spec technologies, Sullivan noted that 10% of Agilent's R&D budget is devoted to measurement science. He also pointed out that most of the company's cash is generated outside the U.S.

    Sullivan, like many other speakers at the conference, sees diagnostics as one of the main growth areas for his company. Along those lines, he cited Agilent's acquisition of Dako, a Danish cancer diagnostics company, as a major move in strengthening Agilent's expertise in diagnostics. Agilent will be looking for more acquisitions this year, he added. Sullivan called pharma, biotech, and forensics testing as main areas of interest for Agilent, and explained that the next-generation sequencing market is one of the most rapidly growing for the company.

    Nick Roelofs, president of Agilent's life science group, took the podium after Sullivan. Again echoing other conference speakers, Roelofs sees huge potential in the clinical LC/MS market where Agilent is already strongly positioned. He added that as more plant and animal genomes are sequenced the ability of companies like Agilent to develop expertise in integrative biology techniques will be critical, along with advances in sample prep procedures.

    Pointing out that diagnostics is the company's fastest growing market, with molecular diagnostics emerging rapidly, Roelofs predicts 10–12% long-term growth here. He said that he company was focusing on anatomical pathologists as significant potential users of molecular diagnostics—an area, according to Roelofs, in which China is underrepresented.


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