Millipore Corporation (NYSE, S&P 500: MIL) provides products for bioscience research and biopharmaceutical manufacturing. The company assists pharmaceuticals with the drug production process by providing tools and expertise to optimize their manufacturing productivity, ensure the quality of their drugs, and increase production of drugs that are hard to manufacture. Millipore also helps scientists carry out their research by providing pre-made laboratory kits and filters and tests that can be used to separate substances for analysis and eliminte impurities. Millipore's largest customers include research departments at biotechnology and pharmaceutical companies, research laboratories, universities and governmental institutions. The company now employs approximately 5,800 employees in more than 47 offices worldwide.[1]
Millipore is investing significant resources in expanding its Asian operations. In 2006 the company is opened a new training facility in China and has also significant increased its sales number of sales reps in the region.
[edit] Business Financials
In 2005, Millipore began a new strategic plan to expand its Bioscience Division, which makes laboratory products, while maintaining its leadership with its biopharmaceutical customers.[2] With the recent acquisition of Serologicals in 2006, the Bioscience Division is able to offer more products is growing markets such as stem cell and drug discovery research.[3] The revenue for the division grew at 10 percent in 2006, the highest growth in the past five years, and it currently contributes to 40% of consolidated revenue for Millipore.[4] Gross profit margins also increased in 2006 to $629.8 million, which was realized due to the company's ongoing focus on producing more of its high margin Bioscience Division laboratory water products.[5]
In 2006, revenue in the Bioprocess Division, which helps biopharmaceuticals with the drug manufacture process, grew by 24.7 percent to $749.8 million due to business acquisitions and higher sales volumes.[6] The continued increase in biopharmaceutical production helped to boost demand for Millipore’s core products remained strong, and acquisitions made in 2006 also helped to increase revenue.[7] Excluding these acquisitions, revenue in the Bioprocess Division increased $48.2 million or 8.0 percent.[8]
Regionally, 45 percent of Millipore's sales occur in America, 39 percent in Europe, and 16 percent in Asia/Pacific.[9] The primary drivers for the growth of Millipore in the upcoming years will be in the global expansion of laboratories, particularly in Asia.[10] Continued research into drug development has led to increased demand for Millipore's products as they help to save time and efficiency for research scientists.[11]
Millipore revenue and net income for the past five years.
[12]
Breakdown of revenue by division for Millipore Corporation.
[13]
Breakdown of net sale by region for Millipore Corporation.
[14][edit] Trends and Forces
- Increased Research in Life Science - Due to rising public health concerns and an aging population in the United States and Internationally, there has been an increased emphasis on life science research.[15] The largest area of expenditure for many countries is now health care, and that figure is only expected to increase in the coming years. Concerns about bioterrorism is also leading to more research funding for virus research, and the growth in clinical tests worldwide and improvements in clinical diagnostics technology is increasing the demand for consumable products such as the ones produced by Millipore.[16]
- FDA Approval of Drugs - A high number of approvals for antibodies, vaccines, and other protein-based therapeutics have led to a higher increased demand for Millipore's Bioprocess solutions since these products are separation-intensive and complex to produce.[17] Millipore also provides products that can be used in small-scale drug production and consumable products that enable the production of therapeutic drugs, and the increase in drug approvals has also led to more demand for these products.[18] Its recent acquisition of Serologicals also positions the company well to gain better customer access and to further their customers' productivity.[19]
- International Expansion into China and India - Millipore has continued its expansion into high growth Asian markets, especially China and India by increasing the number of sales representatives and distributors in Asia.[20] The company has also opened a dedicated Chinese training facility function to help enter the market further.[21] The increases in international sales in recent years were driven by increased orders from China and India.[22]
- Research and Development - Due to the nature of the industry, Millipore must invest heavily in research and development. This present both opportunities and challenges to Millipore as the changing laboratory research markets require new techniques and products that it can provide.[23] The purchase of Serologicals is intended to increase their product development capabilities and will help expand their product catalog.[24] Millipore also just finished a $50 million research and development facility and are in the process of optimizing their development choices and allocation of resources.[25] In 2006, Millipore spent $86.6 million on research and development, which amounted to 6.9% of sales.[26] However, due to the great number of technologies that they introduce every year, Millipore is subject to patent lawsuits and licensing fees. These lawsuits are costly and divert management's focus form business matters.[27].
[edit] Competition
Due to the wide array of products that they offer, Millipore has a large number of competitors ranging from large manufacturer offering a broad portfolio to specialized companies that operate in niche markets.[28] For its Bioprocess Division, competitors include GE Healthcare, Pall (PLL), and Sartorius.[29] For its Bioscience Division, competitors include Invitrogen (IVGN), Qiagen N.V. (QGEN), Thermo Fisher Scientific (TMO), Sigma-Aldrich (SIAL), Techne (TECH), Bio-Rad Laboratories (BIO), Becton, Dickinson and Company (BDX), Whatman, Pall (PLL), and Sartorius.[30]
- Pall (PLL) - Pall Corporation is the largest filtration, separations, and purifications company in the world.[31] Its products are used to remove pathogens from blood, water and food, purify biotech drugs, and clean water supplies.[32] Its business is divided into a Life Sciences Division, which accounts for 23 percent of its sales, and an Industrial Division, which accounts for 77 percent of its sales.[33] Thus, unlike Millipore, Pall does not focus exclusively on the life sciences industry, and indeed a majority of its sales comes from such industries as machinery and equipment, fuels and chemicals, and municipal water.[34]
- Invitrogen (IVGN) - A global company with offices in over 70 countries, Invitrogen provides products and services to pharmaceuticals, biotechnology companies, and academic and government research institutions.[35] Its catalog includes over 25,000 products ranging from protein identification to drug discovery and process development products.[36] Thus, the company competes directly with Millipore's Bioprocess Division, but it does not produce the filtration products that Millipore is best known for. Invitrogen is also heavily reliant on NIH funding for its research.
- Qiagen N.V. (QGEN) - Qiagen is a leading provider of sample technologies used to isolate DNA, RNA, and proteins as well as assay technologies used to make specific target biomolecules for subsequent analysis.[37] Their products are sold to academic research markets as well as pharmaceutical and biotechnology companies, and they have offices in over 30 locations worldwide.[38] Like Millipore, Qiagen is trying to increase its foothold in the Asian market having set up their Asian headquarters in China and a subsidiary in Korea this past year.[39] The focus of the company, however, is different from Millipore's as it provides tools to separate the components of a sample.
| | Comparison of Millipore and Its Competitors
|
| | 2006 Revenue (in Millions US$) | Percentage Growth Over Previous Year | 2006 R&D Expenses (in Millions US$) | % Revenue Spent on R&D
|
| Pall[1] | 2,016 | 6.0% | 57.4 | 2.85%
|
| Invitrogen[2] | 1,263 | 5.4% | 107.6 | 8.52%
|
| Qiagen[3] | 466 | 16.8% | 41.6 | 10.1%
|
| Millipore[4] | 1,255 | 26.6% | 86.6 | 6.9%
|
[edit] References
- ↑ Millipore Quickfacts
- ↑ 2006 Millipore Annual Report Page 4
- ↑ 2006 Millipore Annual Report Page 5
- ↑ 2006 Millipore Annual Report Page 5
- ↑ 2006 Millipore Annual Report Page 60
- ↑ 2006 Millipore Annual Report Page 59
- ↑ 2006 Millipore Annual Report Page 59
- ↑ 2006 Millipore Annual Report Page 59
- ↑ 2006 Millipore Annual Report Page 57
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 56
- ↑ Millipore 10 Year Summary
- ↑ Deutsche Bank Initating Coverage of Millipore Corporation
- ↑ 2006 Millipore Annual Report Page 58
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 56
- ↑ 2006 Millipore Annual Report Page 23
- ↑ 2006 Millipore Annual Report Page 23
- ↑ 2006 Millipore Annual Report Page 59
- ↑ 2006 Millipore Annual Report Page 34
- ↑ 2006 Millipore Annual Report Page 34
- ↑ 2006 Millipore Annual Report Page 35
- ↑ 2006 Millipore Annual Report Page 61
- ↑ 2006 Millipore Annual Report Page 45
- ↑ 2006 Millipore Annual Report Page 36
- ↑ 2006 Millipore Annual Report Page 36
- ↑ 2006 Millipore Annual Report Page 36
- ↑ Pall Company Profile
- ↑ Pall Factsheet
- ↑ Pall Corporate Brochure
- ↑ Pall Corporate Brochure
- ↑ Invitrogen Who We Are
- ↑ Invitrogen Area of Focus
- ↑ Qiagen What We Do
- ↑ Qiagen What We Do
- ↑ 2006 Qiagen Annual Report Pages 8 and 9
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