Life Technologies Corporation (LIFE) has introduced Ion OneTouch system, an automated sample preparation system for the Ion Personal Genome Machine (PGM) sequencer. The company will begin shipment of the product in late June.
The Ion OneTouch system, with an introductory price lower than $5,000, is expected to reduce complexity and time required making things more convenient for researchers.
In December 2010, Life Technologies launched Ion PGM sequencer, the first product to use semiconductor sequencing technology. Ion Torrent has brought to market a new semiconductor device that helps converting chemical signals directly into digital information for the first time.
We are encouraged to note that PGM sales are off to a good start (at the end of the fourth quarter), and the company expects significant contribution from Ion Torrent in the second half of 2011. Moreover, several vendors are developing technologies that streamline workflows both up and downstream at the PGM system, making the technology more attractive to scientists who don’t have the resources to invest in expensive and more complex next-generation sequencing technologies.
Life Technologies’ Genetic Systems division 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 fourth quarter of 2010, this division recorded revenues of $246 million, representing 11% growth. Organic revenue growth was 11% driven by strong double-digit growth in next generation sequencing and forensics and 4% growth in CE instruments and consumables.
Recommendation
Life enjoys a strong position in the life sciences market and we believe robust performance from its core business along with new product launches to help drive revenues going forward. Meanwhile, lower expenses and cost cutting along with increased revenues should drive the bottom line.
We are also impressed by Life’s acquisition of Ion Torrent, which is expected to contribute significantly to the top line going ahead. However, the company faces competition from players such as Thermo Fisher Scientific (TMO), Qiagen (QGEN), Illumina (ILMN), among others.
We are currently ‘Neutral’ on the stock, which also corresponds to the Zacks #3 Rank (hold) in the short-term.
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