 | |
- close
- close
|
|
Topic
Top news source/blog that we're missing
Why do you recommend this news source?
|
||
WIKI ANALYSIS
BioMérieux (EPA: BIM) is a French company that produces in vitro diagnostics for infectious diseases, cardiovascular emergencies, and cancer. Over half of 2007 revenues came from sales of tests used to identify and prescribe defenses against bacteria and other microbiological organisms. BioMérieux is the largest seller of microbiology tests, is a top 10 provider of immunoassay tests, and has growing segments in tests for industrial applications and molecular biology (including DNA and RNA) tests.[1]
The microbiology market, in which bioMérieux holds a 36.4% market share (of $1.85 billion)[citation needed], is a relatively mature market with expected growth rates of only around 3-6% annually.[2] BioMérieux's annual revenue growth rate from 2005 to 2007 of 3.4% reflects the maturity of its major market, while efforts to reduce costs and improve operating margins have resulted in a larger growth rate of operating income (9.6%) during that period,[3] bioMérieux management has stated it intends to increase its presence in higher-growth areas such as molecular biology, clinical tests, and theranostics (individually-tailored treatment).[4]
BioMérieux has an active business development department, and has made over a dozen acquisitions and collaborations from 2007-2008. On September 11, 2008, bioMérieux completed the acquisition of bioTheranostics, a molecular cancer profiling company, for $60 million.[5] While bioMérieux's strong presence in microbiology and immunoassays have brought in steady revenue from 2005-2007, growth in its emergent theranostic and molecular biology segments are important for bioMérieux's long-term outlook.
Corporate Overview
Business Financials
From 2005 to 2007 bioMérieux's revenue increased from 994 to 1,063 million euros (€), while operating income increased from €139 to 167 million for compound annual growth rates (CAGRs) of 3.4% and 9.6%, respectively. This corresponds to a growth in operating margin from 14% in 2005 to 15.7% in 2007.[7] BioMérieux attributes this sales growth to the launch of new diagnostic products in infectious diseases and high-value clinical diagnostic areas such as cardiovascular disease and cancer. In 2007 alone, bioMérieux launched 6 major products.[8]
In 2007, bioMérieux obtained 85% of its revenue from sales in clinical applications, such as microbiology (€534 million), immunoassays (€288 million), and molecular biology (€47 million), and 15% of its revenue from industrial applications (€154 million). In terms of product segments, bioMérieux obtained 82.5% of its revenue from reagent sales (€877 million), 12.7% from instrument sales (€135 million), and 4.7% from services and other types of sales (€51 million).[9]
At the end of FY2006, bioMérieux presented a 2007-2012 strategic plan containing financial and market-driven goals.[11] Financially, bioMérieux expects a 5-6% annual growth rate in sales from R&D in its own pipeline, a 1-2% growth from business development deals, and about 1% growth annually from sales optimization practices. Together, these correspond to an expected 7-9% annual growth rate in total sales for bioMérieux.[12] BioMérieux expects to keep its gross margin stable by offsetting lower prices on the market for its products with improved costs and distribution agreements.[13] Strategically, bioMérieux plans on shifting its focus from laboratory-focused tests to tests with high clinical value that may be used at the point-of-care.[14]
In the first half of FY 2008, bioMérieux posted sales of €528 million with an operating income of €84 million, representing an operating margin of 15.2% of sales. Both numbers correspond to a 7.6% increase over the first half of FY 2007.[15]
Major Product Segments
Microbiology (52% of sales in 2007)
The microbiology segment of bioMérieux consist of products that help laboratories diagnose and develop treatments for infectious diseases through tests on blood, urine, and tissue samples from patients.
The BacT/ALERT 3D system tests for the presence of disease-causing organisms in the blood of patients.[16]
The VITEK 2 system provides testing of infected patients for susceptibility of the invading bacteria to antibiotic treatments. By testing this, physicians can avoid creating resistant bacteria through treatment with antibiotics with less-than-ideal effectiveness.[17]
BioMérieux's ChromeID system provides a range of culture media with which to transport patient specimens for testing.[18]
Immunoassays (28% of sales in 2007)
Immunoassays use detectable antibodies that specifically bind to and detect the presence of bacteria and other disease-causing agents in patient specimens. BioMérieux develops high-performance immunoanalyzers for laboratory testing as well as quick and portable tests for rapid testing at the point-of-care.
BioMérieux's VIDAS system is a fully automatic immunoanalyzer that can test patient specimens for 85 different pathogens, including HIV, Hepatitis, ToRC, and D-dimer. The VIDAS systems provide high-throughput testing services for laboratories in hospitals. BioMérieux has also developed the miniVIDAS, which can be used in smaller emergency settings.[19]
BioMérieux's DAVINCI QUATTRO screening system provides high volume screening for 8 common infectious diseases: HIV, Hepatitis B, Hepatitis C*, CMV, HTLV, Syphilis, Chagas and EBV.[20]
Rapid diagnostic immunoassays are small hand-held disposable tests that give quick and reliable test results, albeit with less sophistication than larger lab tests. To service this market bioMérieux has developed the QUICKVUE and VIKIA tests. These tests are capable of giving test results in less than an hour for common diseases such as influenza, HIV, and strep.[21]
Industrial Applications (15% of sales in 2007)
BioMérieux develops several products to address the industrial testing market segment. This segment includes Food Safety Testing, which involves testing new food products for contamination, and Pharmaceutical Quality Testing, which involves testing pharmaceutical manufacturing facilities for contamination sources.[22]
For food safety, BioMérieux offers the DiversiLab™ system, for testing microorganisms, such as Salmonella, MiniBags culture media that provide a greater degree of safety when they are used in industrial microbiology laboratories, and the chromID™ Sakazakii culture medium for the detection of bacterium present in infant milk powder.
In pharmaceutical quality, BioMérieux offers the DiversiLab™ system for identifying potential contamination sources in pharmaceutical production facilities, the TSA 3P™ Pack +, a culture media, used for air quality monitoring in manufacturing facilities, the Count-Tact™ 3P™ Pack +, culture media to monitor surface quality, and the QUANTISWAB™ by Copan, used to perform quantitative environmental control in pharmaceutical manufacturing facilities.
Molecular Diagnostics (5% of sales in 2007)
Molecular diagnostics uses the concept of nucleic acid (i.e. DNA or RNA) amplification and detection to diagnose the presence of foreign organisms or genetic mutations. In this segment, bioMérieux has developed the NucliSENS testing kit.[23]
Trends and Forces
Diagnostics transitioning from laboratory to clincal tests
BioMérieux's management has stated that it intends to change its focus from laboratory-oriented tests to those designed for point-of-care use by clinicians.[24] Such a move involves marketing products to physicians rather than laboratory technicians and developing products that suit different needs. Whereas laboratory tests focus more on high precision testing for high initial costs, point-of-care tests focus more on speed and portability for lower initial costs.[25] BioMérieux's ability to make the transition from laboratory tests to clinical tests affects its ability to fulfill its own strategic plan and grow in the future.
BioMérieux's aims to expand in international markets
BioMérieux has set a revenue growth target of 7-9% annually despite its revenue growth from 2005-2007 reaching only 3.4%.[26] One of the ways in which bioMérieux plans to achieve such growth is through expansion and optimization of its sales force overseas. BioMérieux created a Global Commercial Operations Department to facilitate this expansion and has selected the United States and Japan as target markets outside of Europe through which it may expand.[27] BioMérieux's ability to reach these markets and grab market share from incumbent players impacts its growth.
The rise of Personalized Medicine in health care affects bioMérieux's theranostics division
Pharmacogenomics is the study of how genetic codes, or markers, in the DNA of a patient correspond to the efficacy and toxicity of potential therapeutics. Personalized medicine is the use of pharmacogenomics to guide prescription, and even development of such therapeutics. Analysts predict that personalized medicine will become a part of mainstream practice in medical care within 10 years.[28]
As personalized medicine becomes a standard practice in the medical community, physicians will need genetic analyzers, such as those that bioMérieux develops in its molecular testing division, to make prescribing decisions. In addition, BioMérieux's theranostics division focuses on creating tests for personalizing cancer medicines to individual patients.[29] The extent to which personalized medicine becomes prevalent in medical use affects the success of bioMérieux's higher growth areas - molecular testing and theranostics.
The success of the bioMérieux's recent collaborations and acquisitions will impact its valuation
BioMérieux has an active business development strategy. In 2007, bioMérieux made 10 major deals or acquisitions.[30] In the microbiology segment, bioMérieux acquired Biomedics, a bacteria culture manufacturer,[31] and signed partnerships with Sysmex, Eiken, and Labtech Systems. In molecular biology, bioMérieux signed deals with AdvanDx and Cepheid (CPHD) for the commercialization of diagnostic tests for sepsis. For its industrial testing segment, bioMérieux acquired BTF and signed an agreement with Copan to distribute a pharmaceutical testing device.[32]
In September 2008, bioMérieux acquired bioTheranostics (formerly AviaraDx), a molecular cancer profiling company, for $60 million.[33] BioTheranostics develops diagnostic tests to classify cancers and help physicians provide medications that are personalized for individual patients.[34] BioTheranostics currently operates at a loss ($8 million EBIT in 2008), and bioMérieux doesn't expect the acquisition to benefit its income until after 2012.[35] In addition, BioMérieux intends to make more acquisitions in the U.S. and Asia in 2009. Stephane Bancel, Chief Executive Officer of the company said: “We are in talks with numerous parties.”[36]
In a 2006 survey by Accenture of company executives, less than 50% said that their most recent deals achieved the expected cost-saving synergies.[37] The ability of bioMérieux to integrate its acquisitions and collaborations into its infrastructure impacts bioMérieux's bottom line and future success.
Competition
BioMérieux competes with several companies in the diagnostics market, including Roche Pharmaceuticals (RHHBY), Abbott Laboratories (ABT), Becton, Dickinson and Company (BDX), JOHNSON & JOHNSON (JNJ) and Beckman Coulter (BEC).
| Income Data, in millions USD | bioMérieux[38] | Abbott Laboratories (ABT) | Roche Diagnostics | JOHNSON & JOHNSON (JNJ) | Becton, Dickinson and Company (BDX) | Beckman Coulter (BEC) | ||||||
| 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |
| Net revenue | $1,673 | $1,633 | $25,914 | $22,476 | $9,350 | $8,747 | $61,095 | $53,324 | $6,360 | $5,738 | $2,761 | $2,528 |
| Net income | $154.5 | $166.0 | $3,606 | $1,716 | $1,648 | $1,422 | $10,576 | $11,053 | $890.0 | $752.3 | $211.3 | $186.9 |
| R&D as % of sales | 12.4% | 12.5% | 9.7% | 10% | 8.4% | 8.0% | 12.6% | 13.4% | 5.7% | 5.3% | 9.9% | 10.5% |
| Return on Assets | 9.8% | 11.2% | 9.1% | 4.7% | N/A | N/A | 13.1% | 15.7% | 12.1% | 11.0% | 5.9% | 5.7% |
| Return on Equity | 16.3% | 18.9% | 20.3% | 12.2% | N/A | N/A | 24.4% | 28.1% | 20.4% | 19.6% | 14.7% | 16.2% |
Microbiology Market Share
The total market for microorganism identification and resistance tests was $1.85 billion in 2007, according to Kalorama information. In this market, bioMérieux earned $672.7 million in 2007, amounting to 36.4% of the total market for microbiology.[39] Other major players in this market include Becton, Dickinson and Company (BDX) and Siemens AG (SI). Market share information is included in the table below:
| Rank | Company | Revenue ($ million) | Market Share |
|---|---|---|---|
| 1 | BioMérieux | 673 | 36.4% |
| 2 | Becton, Dickinson and Company (BDX) | 450 | 24.3% |
| 3 | Siemens AG (SI) | 200 | 10.8% |
| 4 | Others | 527 | 28.5% |
Immunoassay Market Share
In 2007, BioMérieux maintained a 5.8% market share in the $7 billion immunoassay market, with $363 million in revenue, placing it 7th among its competitors. Market share information is included in the table below:
| Rank | Company | Revenue ($ million) | Market Share |
|---|---|---|---|
| 1 | Abbott Laboratories (ABT) | 2100 | 33.3% |
| 2 | Siemens AG (SI)/Dade Behring Holdings (DADE) | 825 | 13.1% |
| 3 | Siemens AG (SI)/Bayer AG (BAYRY) | 750 | 11.9% |
| 4 | Beckman Coulter (BEC) | 596 | 9.5% |
| 5 | Siemens AG (SI)/DPC | 595 | 9.4% |
| 6 | Roche Pharmaceuticals (RHHBY) | 575 | 9.1% |
| 7 | BioMérieux | 363 | 5.8% |
| 8 | Fujirobio | 299 | 4.7% |
| 9 | Ortho Clinical Diagnostics | 200 | 3.2% |
References
- ↑ Kalorama Information. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 6th Edition. May 2008, p. 402
- ↑ Kalorama Information. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 6th Edition. May 2008, p. 781
- ↑ BioMérieux 2007 Annual Report, p.6
- ↑ BioMérieux 2007-2012 Strategy, p.17
- ↑ Yahoo! Finance - BioMérieux buys AviaraDx for $60 mln
- ↑ BioMérieux 2007 Annual Report, p.6
- ↑ BioMérieux 2007 Annual Report, p.6
- ↑ BIM 2007 Annual Report, p.7
- ↑ BioMérieux FY2007 Results, p.5-6
- ↑ BioMérieux FY2007 Results, p.5-6
- ↑ BioMérieux 2007-2012 Strategy
- ↑ BioMérieux 2007-2012 Strategy, p.22
- ↑ BioMérieux 2007-2012 Strategy, p.30
- ↑ BioMérieux 2007-2012 Strategy, p.17
- ↑ BioMérieux First-Half FY2008 Results
- ↑ BioMérieux - BacT/ALERT 3D
- ↑ BioMérieux - VITEK 2
- ↑ BioMérieux - ChromeID
- ↑ BioMérieux - VIDAS
- ↑ BioMérieux - DAVINCI QUATTRO
- ↑ BioMérieux - Rapid Tests
- ↑ BioMérieux 2007 Annual Report, p.12
- ↑ BioMérieux - Molecular Diagnostics
- ↑ BioMérieux 2007-2012 Strategy, p.17
- ↑ BNET: Point-of-care testing versus central lab costs
- ↑ BioMérieux 2007 Annual Report, p.6
- ↑ BioMérieux 2007-2012 Strategy, p.19
- ↑ Personalized Medicine: The Emerging Pharmacogenomics Revolution. PriceWaterhouseCoopers. Feb 2005.
- ↑ BioMérieux FY2007 Results, p.36
- ↑ BioMérieux FY2007 Results, p.5-6
- ↑ bioMérieux Press Release
- ↑ bioMérieux Press Release
- ↑ Reuters: BioMérieux buys AviaraDx for $60 million
- ↑ bioTheranostics - Homepage
- ↑ BioMérieux Presentation: AviaraDX Acquisition, Sep 2008
- ↑ Business Week Company Snapshot: BioMérieux
- ↑ Accenture Newsroom: Executives Report that Mergers and Acquisitions Fail to Create Adequate Value, June 2006.
- ↑ Note: Numbers reflect conversion from Euros to US Dollars using the exchange rate on March 17, 2008, when bioMérieux annual earnings were released
- ↑ Kalorama Information. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 6th Edition. May 2008, p. 781
- ↑ Kalorama Information. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 6th Edition. May 2008, p. 781
- ↑ Kalorama Information. The Worldwide Market for In Vitro Diagnostic (IVD) Tests, 6th Edition. May 2008, p. 402
| ||||||
|
|
