Techne Corporation synthesizes proteins, antibodies and other tools are used by scientists within the medical community to develop methods of diagnosing and treating diseases. The company's hematology division also develops instruments that can be used to test the accuracy of blood testing equipment. Techne's largest customers include pharmaceutical companies universities and government research centers, and the company's research is guided by both proposals from its own scientists.
Techne Corporation has been able to capitalize on the growth in the health care sector during the past two decades. Techne also faces competition from larger companies such as Becton, Dickinson and Company (BDX) and Millipore (MIL), whose primary business is not in the biotechnology industry but who do have divisions actively researching areas concerning biotechnology.
The biotechnology division produces proteins and antibodies as well as kits for measuring the biochemical or immunological activity of a sample for research purposes while the hematology division develops instruments to test the accuracy of blood analysis equipment.
Techne's product catalog has over 11,000 products that are used for biological research throughout the world with 51.7% of sales domestically in the United States and 42.9% internationally.  Over 95% of Techne's revenue comes from products that are developed and manufactured in-house. 
Consolidated net sales for 2007 increased by $20.9 million (10.3%) to $223.5 million from 2006 with the biotechnology division accounting for 65% of the sales. Approximately $1.2 million of the increase in biotechnology net sales was the result of price increase with the majority of the rest of the increase due to higher sales to pharmaceutical/biotechnology and academic customers.  Gross margins, as a percentage of net sales, was 79.1% in 2007 with the biotechnology division again leading the way with a gross margin of 79.9% and R&D Europe and the hematology division lagging behind at 52.9% and 43.1%, respectively. Techne also paid off all of its mortgage debt of $13.8 million and currently has no debt and low liabilities of $14.80 million.
With $256 in cash and investments, Techne has the surplus cash necessary to both reinvest in their existing business and acquire new technology, products, and entire companies. It's most recent acquisition was in July 2005 when it acquired Fortron Bio Science, Inc. and BiosPacific. Techne also established R&D Systems China in late fiscal year 2007 to distribute biotechnology products there and provide better support for its Chinese customers. All orders from third-party distributors should be fulfilled from that facility beginning is the second quarter of fiscal year 2008.
Techne also announced in November a stock stock repurchase authorization of $150 million.
|Research and Development Expenses for 2007 (in thousands)|
Techne Corporation operates in a relatively specialized market in which there are high barriers for entry due to the technological nature of their research. They are an established and respected research company having been in existence since the 1980s, and with the requirement for accuracy needed for medical research, institutions and universities are more likely to buy from a reputable company. Competitors to Techne include Invitrogen, BD Biosciences, and Millipore.
|Comparison of Techne and Its Competitors|
|2006 Revenue (in Millions US$)||Percentage Growth Over Previous Year||2006 R&D Expenses (in Millions US$)||% Revenue Spent on R&D|
Techne is the leading US supplier of cytokines with 50% of the market share. It acquired its largest competitor in the cytokine market in 1998, a division of Genzyme (GENZ), which had a 10% market share. Techne is also the third largest supplier of hematology control products behind Beckman Coulter (BEC) and Streck.