Recently, Life Technologies Corporation (LIFE) launched LifeScope genomic analysis software to overcome the problem of data overload from next-generation sequencers. A next-generation sequencing instrument can generate about 200 gigabytes of genomic data per week. LifeScope software will be better placed to analyze this huge data to find patterns indicated by rare diseases. This will be of immense benefit to life scientists and bioinformaticists for conducting their research studies.
Moreover, LifeScope has been developed so that it can be integrated with Life Technologies' 5500 Series Genetic Analyzers. It can also be used with Ion Personal Genome Machine (PGM).
The Genetic Systems division of Life Technologies includes sequencing systems and reagents, including capillary electrophoresis (CE) and the SOLiD system, as well as reagent kits developed specifically for applied markets, such as forensics, food safety and pharmaceutical quality monitoring.
During the first quarter of 2011, this division recorded revenues of $228 million, representing a 4% decline. Organic revenue declined 8% owing to delayed shipment of the new 5500 sequencer. This was driven by the disaster in Japan and slower-than-average sales of the SOLiD 4 System as customers delayed purchasing in anticipation of the 5500 launch.
Moreover, sales of CE instruments and consumables declined in the low-single digits during the quarter due to a difficult year-over-year comparison. Excluding the impact of these comparables, the CE business grew in the low-single digits. Maintaining the previous trend, sales of the PGM were strong and the company expects significant contribution from Ion Torrent in the second half of 2011.
Life Technologies enjoys a strong position in the life sciences market and we believe robust performance from its core business along with new product launches will help drive revenues going forward. The company is increasing its focus on emerging markets, which bode well for long-term growth. We are also impressed by Life Technologies’ acquisition of Ion Torrent, which is expected to contribute significantly to the top line going ahead. Moreover, the company is adopting several strategies, which are expected to improve its operating efficiency going forward. However, the company faces stiff competition from players like Qiagen (QGEN) and Illumina (ILMN) among others. Moreover, Life Technologies earns more than 50% of its revenues from international operations thereby exposing the company to unfavorable currency movement.
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