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JP Morgan Healthcare Conference Day 2: Labcorp, Thermo Fisher Scientific, Abbott, Danaher, More

JPMorgan

NEW YORK – The 40th Annual JP Morgan Healthcare Conference is being held virtually this week due to the ongoing coronavirus pandemic. The first day was very busy for firms operating in the diagnostics and genomic tools markets, and our coverage of those presentations can be found here 

Below are brief reports on individual presentations webcast by the companies or through the JP Morgan conference portal on day two. 

Labcorp

Befitting a conference where all of the participants were virtual due to the COVID-19 pandemic, Adam Schechter, chairman and CEO of Laboratory Corporation of America, led his remarks with an update on the company's SARS-CoV-2 testing capabilities.

The Burlington, North Carolina-based firm currently has the supplies to do about 300,000 SARS-CoV-2 molecular tests per day, Schechter said, though he noted that staffing, not supplies, is "the biggest issue we face right now in running the tests."

He said Labcorp is averaging between 25,000 and 50,000 molecular tests per weekend day and between 125,000 and 175,000 per weekday with average turnaround time of two days or less. That is up from an average of 85,000 molecular tests per day in Q3 2021 and 54,000 per day in Q2. The company has performed more than 65 million COVID-19 tests since the beginning of the pandemic, he added.

Unlike molecular testing, serology testing has not seen a spike in orders in response to the Omicron variant, Schechter said. Volumes remain around 10,000 to 12,000 per day.

Labcorp also continues to sequence around 10,000 SARS-CoV-2 samples per week for the US Centers for Disease Control and Prevention.

Organic testing volumes have remained strong despite the Omicron variant, Schechter said, noting that as of the end of Q3 2021, organic growth was up over 3 percent versus 2019, before the pandemic, and the company has not seen "a significant change" since then.

He cited esoteric categories like infectious disease, toxicology, and endocrinology as areas of growth along with routine testing categories like general medicine and chronic disease.

Schechter also highlighted the results of the company's review of its capital allocation and structure that it embarked upon last year with the aim of boosting its stock price. Among the moves it is taking are initiating a quarterly dividend starting in Q2 2022 and authorizing a $2.5 billion share repurchase, with $1 billion of common stock to be repurchased on an accelerated schedule.

Labcorp had also considered potentially divesting its Covance Drug Development business but decided against the idea, with Schechter noting that the board "unanimously concluded that the company's structure is in the best interest of customers and patients and shareholders at this time."

Despite high valuations in the space, Schechter said that Labcorp plans to continue to target health systems and tuck-in laboratory acquisitions and added that this "pipeline is as strong as it has ever been."

Schechter also said the company was focused on areas including cell and gene therapy and liquid biopsy as sources of future growth. He cited Labcorp's move, announced last month, to acquire cancer genomics firm Personal Genome Diagnostics\d=cv x (PGDx) for $450 million in cash and $125 million in additional payments based on future performance milestones.

https://www.360dx.com/cancer/labcorp-acquire-personal-genome-diagnostics-575m-cash#.Yd5Z11jMLqs

He said the acquisition would strengthen Labcorp's oncology offerings by complementing and expanding its liquid biopsy capabilities and add to existing cancer sequencing products including its IntelliGEN panel for myeloid disorders, its clonoSEQ assay for minimal residual disease assessment, and its Resolution ctDx Lung assay for guiding treatment of patients with non-small cell lung cancer.

"We are trying to build an entire portfolio of personalized medicine," Schechter said.

Ortho Clinical Diagnostics 

Ortho Clinical Diagnostics announced in December that it is being acquired by Quidel for $6 billion, but the future is all about "these two organizations coming together," according to Chris Smith, Ortho's chairman and CEO.  

Ortho's search for a product that would enable it to enter molecular diagnostics was an important driver for the proposed transaction, he said. The firm is developing dry-dry technology for its immunoassay and clinical chemistry platforms, which would eliminate requirements for water and filtration for its future customers, but it will take another three years to launch it, Smith said. 

At the same time, Ortho has been "looking pretty hard at some of the molecular products that were out in the market," Smith said, adding that the launch of Quidel's Savannah multiplex real-time PCR testing platform, which is expected this quarter, became an important contributor to the rationale for the acquisition.  

Overall, there are many cost- and revenue-related synergies to gain through the acquisition, several executives from Ortho and Quidel said doing the presentation. Douglas Bryant, Quidel's president and CEO, said the transaction represents a "transformative event" for his firm.  

It "is super important that we get it right," he said, adding that his "number one priority is to do the integration, retain the talented people that exist in both organizations, [and] put together a strategy to grow this company organically." 

Bryant noted that he had been encouraged to look at Ortho as a potential acquisition candidate prior to Smith and his team joining the Raritan, New Jersey-based firm. "The progress that they've made in the last two or three years, particularly on commercial strategy and execution, has been super impressive," he said.  

"When you consider the geographic expansion that has occurred in [Ortho] over many years and their position in the marketplace" it became clear that the acquisition would become "more than just a Savannah play," he added. 

Quidel has a "reputation as a standalone company, as a group of people that has done pretty well from an R&D perspective and the products that we've produced are … among the better [products] in our space," Bryant said.  Nonetheless, the firm was probably "underdeveloped commercially, particularly on a global basis, and that was always going to hold us back," he added. 

Ortho's Michael Iskra, who will be chief commercial officer of the combined company, said their product portfolios are "really complementary," offering a broad range of products that serve centralized and decentralized customers including consumers, an area in which "Quidel is extremely well positioned." 

Further, about 50 percent of Quidel's business is in hospitals, which are the primary buyers of its products. Both companies have "strong presences" in US hospitals, providing opportunities to sell each other's products, he said. 

Outside the US, it may be necessary to address a different call point with hospital customers "but a lot of these decisions are tied to the central lab where Ortho is today, and that's going to give us a quick opportunity to drive synergies out of the gate," Iskra said. 

Ortho had announced preliminary financial results for the fourth quarter after the close of the market last Thursday, saying it expects total revenues of between $520 million and $522 million, up approximately 1 percent year over year from $517 million. 

Abbott Laboratories 

Chairman and CEO Robert Ford said Abbott has "plenty of capacity" to handle the Omicron surge and expects its position in the rapid diagnostic testing market as well as increasing acceptance of over-the-counter testing to ultimately lend itself to "an interesting strategic play" for the firm. 

Abbott plans to begin building a more sustainable rapid diagnostics business, Ford said, that can include direct-to-consumer sales as well as other channels outside the hospital.  

Ford deferred specifics on Abbott's financial results for the year — including "a pretty strong last couple months of testing" — to an upcoming investor day presentation. 

The firm aspires to merge health technology and consumer technology, in part by building out its diabetes biowearables business for non-diabetes glucose monitoring and things like keto, lactate, and alcohol sensing. 

In diagnostics, the ID Now base has grown significantly, Ford said, and the firm's service and support of those systems has helped build good relationships with new customers who may be interested in "a tailwind of upper respiratory infectious disease testing," he said, adding that Abbott has been developing new tests.  

Abbott launched the Alinity MDx system during the pandemic and it is still in its roll-out phase, Ford said. Abbott has had success winning accounts for the Alinity MDx in core labs, Ford added, and he continues to believe the win rate is sustainable.  

"The key thing is, how do you add more to that box ... the core lab is also about menu expansion and increasing the throughput of those systems," he said. "I think that is the key aspect of our strategy, not only to win the accounts and RFPs that are coming up but to get new assays put in through those boxes is a great strategy for us in terms of returns."  

Myriad Genetics 

In the first quarter of 2022, Myriad Genetics will launch a testing service, called Precise Oncology Solutions, that oncologists can use to simultaneously garner insights about a cancer patient's hereditary cancer risk as well as the drugs they'll likely respond to.  

The Salt Lake City, Utah-based company has been developing the testing service under a collaboration with Intermountain Health and Illumina that was announced last year. The service will allow doctors to order, at the same time, Myriad's myRisk germline test for hereditary cancer risk; its myChoice CDx for assessing homologous recombination deficiency in ovarian cancer patients and predicting response to PARP inhibitors; and a comprehensive tumor panel developed by Intermountain, called Precise Tumor, that is based on Illumina's TSO 500 assay and can identify treatment opportunities with a variety of targeted drugs and immunotherapies.   

Myriad CEO and President Paul Diaz noted that although myChoice CDx is currently only available to direct the use of PARP inhibitors for ovarian cancer patients, the test is being evaluated in more than a dozen clinical trials with drugs for breast, prostate, and pancreatic cancer, which together represent a $2 billion annual market opportunity for the test. Myriad is hoping to launch myChoice CDx in new indications starting in 2024.  

The company is also eyeing the liquid biopsy market, both for therapy selection and for measurable residual disease detection to track progression and cancer relapse. The company is in discussions with potential partners about developing a liquid biopsy therapy selection test that it hopes to launch sometime in 2023. For the MRD test, Myriad is hoping to leverage whole-exome sequencing and other technologies it has access to through existing partnerships and to develop a differentiated test for the market in 2024 or 2025.  

"We're going to go about it in a different way," Diaz said, recognizing that the MRD market is a crowded one. "A lot of people are ahead of us." But he noted that Myriad has a lot of in-house capabilities, as well as expertise and technologies it can leverage through its partnerships with Illumina and Intermountain, that will allow it to advance a differentiated MRD product.  

"We don't think we can take over the [liquid biopsy] market," he said. "But we think we can own our fair share of the market." 

Myriad is also making progress in its three-phase, multi-year restructuring plan to improve financials and capture the full market potential of its molecular diagnostics products. The company expects to enter 2022 with approximately $400 million in cash and no debt. Diaz projected that Myriad will grow organic revenues in the range of 9 percent to 12 percent between 2022 and 2023.  

The projection, he explained, does not factor in M&A activity or capital expenditure investments but is based on Myriad's confidence that it can stabilize the uptake of myRisk in a competitive market; maintain growth of the GeneSight pharmacogenetic test to guide use of mental health drugs; launch and drive adoption of a combined noninvasive prenatal screening and carrier screening test offering, called FirstGene; launch the integrated Precise Oncology Solution; and achieve other planned pipeline expansions.  

Lastly, despite continued uncertainty due to the COVID-19 pandemic, Myriad provided revenue guidance for 2022. The company is expecting revenues between $670 million and $700 million for the year and adjusted EPS in the range of $0 and $.20. 

Bio-Rad Laboratories 

Chief Operating Officer Andrew Last said Bio-Rad Laboratories supplied instrumentation to build capacity for COVID-19 testing throughout the pandemic. The firm now sees the market as saturated in developed countries and expects "a big tail off" of COVID-19 revenues going forward from the approximately $245 million it guided for this past year, even given "a bit of a curve ball" from the Omicron variant. 

CEO and President Norman Schwartz said that while COVID is subsiding, "the research market seems to be very robust, the biopharma market is strong, and there is a greater appreciation for diagnostics," and added, "I think we are in some very good areas at the macro level."  

The pandemic-expanded installed base of PCR instruments will allow Bio-Rad to capture additional consumable sales, Schwartz suggest, noting that the newer hospital lab base also opens new markets for a firm that has more traditionally played in academic labs.   

Bio-Rad will capitalize on a recent partnership with Seegene in this realm, and hopes to port that firm's assays to instruments in the hospital market for clinical lab use, Schwartz said. 

With a double-digit increase in funding proposed for the National Institutes of Health budget, Bio-Rad also anticipates growth in the research market, as well as continued advancement into the biopharma research market. Last said Bio-Rad has been "underpenetrated" in biopharma, so there is a room for growth particularly in protein therapeutics workflows and gene therapy applications.  

"These give us a high-value entre into the segment, and then we have the opportunity to sell other products ... so we do get a halo effect from just being simply present in the biopharma segment," Last said.   

Bio-Rad's Droplet Digital PCR system is also now positioned to take advantage of a market that the firm now sees climbing into "the many billions of dollars," Last said. Applications and end markets for the "highly quantitative" technology include academia, biopharma, cell and gene therapies, as well as diagnostics, liquid biopsy, and wastewater testing. 

Using digital PCR to support wastewater-based epidemiology testing is currently a small amount of the firm's total business, Last said, but "it's interesting, and it's certainly a growth opportunity." However, it is also "a price-sensitive market" that is somewhat dependent on federal funding, so for ddPCR to supplant qPCR will require pricing parity. 

Bio-Rad recently acquired Dropworks, in part to reach "the low end of the digital PCR market," Schwartz said. The technology is still in development and will take another 12 to 15 months to get to market, he said. Bio-Rad is also seeing uptake of ddPCR in the liquid biopsy testing space, Last said. 

Bio-Rad is also preparing to enter the single-cell biology market through technology obtained in its 2020 acquisition of Celsee. Last noted that the firm "lost a couple quarters" of development time through delays related to having to integrate the acquisition just as the pandemic hit. The firm expects the first-generation products for this market to debut in the second half of 2022.  

Bio-Rad also has "an increased appetite and focus" for a larger, potentially transformative M&A deal, either in life sciences or diagnostics, but there is "not a long list to choose from," Schwartz said. "We want to be careful that what we choose makes sense," he said, in terms of valuation, culture, and technology. 

Nevertheless, he added, "I would really hope that we could get something done in the next 12 to 18 months." 

Chief Financial Officer Ilan Daskal said Bio-Rad would like to spend between $1 billion and $5 billion on the low end for any transaction, "Which we believe we can finance with our strong balance sheet, continued generation of free cash flow, leverage ratio of up to 3x on a gross basis, and some additional equity." The deal could potentially be a "merger of equals" on the higher end, but Daskal reiterated that "there aren't many opportunities out there." 

Thermo Fisher Scientific 

Thermo Fisher Scientific President, Chairman, and CEO Marc Casper highlighted the upsides of the firm's $24 billion in recent acquisitions, including PPD, Mesa Biotech, Combinati, and others, adding cell sorting technologies as well as rapid and digital PCR systems to the firm's portfolio. 

The firm is "very excited" about the acquisition of contract research services provider PPD, which closed on Dec. 8, 2021, and expects it to contribute $1.50 in EPS for 2022, Casper said. 

Regarding the Mesa Biotech point-of-care rapid PCR system, Casper said the long-term strategy is to build up menu for the handheld device. 

"We looked at over 50 different technologies — there are a lot of interesting different technologies and startups — and what we loved about Mesa Biotech's rapid PCR is the quality of results is awesome, and the instrument is super low-cost," Casper said. 

Furthermore, Casper said, "The list price on the instrument is $300, which basically means you can have it everywhere, and it is super easy to use." 

Thermo Fisher reasoned that the COVID-related opportunity alone will likely pay for the Mesa acquisition, and the firm can then capitalize with new menu post-COVID. 

The company is now developing other molecular diagnostic tests for the system, including respiratory and other targets that could have utility in decentralized settings needing rapid turnaround times. 

"What we would expect is that by the middle of this decade you will see an impressive menu that will allow [spaces like] the pharmacy market to be able to offer rapid PCR tests," he said. 

The takeaway for the past year was, "2021 was awesome," Casper said. Entering 2022, "We are an incredibly well-positioned industry leader and we serve some very attractive markets, with a great financial track record and outlook," he said. 

Hologic

Hologic's preliminary fiscal first quarter revenues announced on Sunday were down 9 percent year over year but better than the company expected.

When it assembled its forecasts, the Marlborough, Massachusetts-based firm had not anticipated the emergence of the Omicron variant or the associated demand for its molecular tests, Hologic's Chairman, President, and CEO Steve MacMillan said Tuesday.

For Q1 2022, the company expects total revenues of approximately $1.47 billion. In November, it guided for Q1 revenues of $1.10 billion to $1.15 billion, and for full fiscal year 2022, it expected revenues of $3.75 billion to $4.00 billion.

Now, its full-year revenues estimates are probably also understated, MacMillan said, adding that with global testing demand at an all-time high, "there's clearly going to be meaningful upside to our original forecast for the year.

"The biggest thing we keep seeing is there are going to be new variants and we've conditioned the public around the world to pay more attention to these things. … It is going to create a stronger business for us over time."

Additionally, ongoing labor shortages are likely to push up placements of its highly automated Panther molecular diagnostic systems and tests, MacMillan said.

A question he has "heard repeatedly over the last couple of years" is whether many of the Panther instruments placed worldwide during the pandemic "are going to be sitting idle when COVID comes down," MacMillan said. "Our Panthers are going to be used because right now they're seeing extreme demand, and in a labor-constrained world, we think they're going to be even more important going forward."

About a year ago, as more individuals began receiving COVID-19 vaccines, people thought testing was going away, and when antigen tests were approved, some said molecular testing would go away, MacMillan said. Neither one happened and, in this pandemic, "molecular testing, the gold standard, will be here for the long run and we are going to be here with it," he said.

Last summer, MacMillan noted, Hologic announced a top-line organic growth rate target of 5 to 7 percent, though its pre-pandemic annual organic growth rate approached 5 percent. The company is ahead of its target, posting 12 percent organic growth in Q4 2021 and 9 percent organic growth in Q1 2022, he said.

Its molecular business, international sales, and recent acquisitions are the main contributors to organic growth, MacMillan added.

"Because our core businesses are so strong now, it gives us the luxury of being patient and selective as we scan the universe of what is out there" for capital deployment, MacMillan said. "It's giving us the opportunity to be opportunistic as we were last year with Biotheranostics, Diagenode, [and] Mobidiag."

PerkinElmer  

During the past few years, the company has focused on what it considers high-growth markets, and during his presentation PerkinElmer President and CEO Prahlad Singh noted the benefits of the strategy, saying that the firm now projects total revenues of at least $4.5 billion in 2023, a $500 million increase from its estimate six months ago, driven by stronger than expected organic growth and the addition of BioLegend to its portfolio. 

The Waltham, Massachusetts-based firm previously anticipated 5 to 7 percent core organic growth, but with recent acquisitions becoming part of its core business during the next 12 months, that range has been increased to 7 to 9 percent, Singh said, adding the new estimate excludes all contributions from its COVID-19 business. 

Of the firm's Diagnostics segment, he noted that it brought in about $3 billion in revenues in 2021, about half of which was not COVID-19-related. Since 2015, the diagnostics business has nearly tripled from about $450 million in revenues, he added. 

A year ago, PerkinElmer acquired Oxford Immunotec for $591 million, which has allowed the firm to broaden its presence in the infectious disease market. Additionally, its acquisition of Immunodiagnostic Systems last May for $155 million allowed it to increase its offerings in autoimmune diseases, Singh said. 

Further, he said that PerkinElmer is building a complete workflow around Oxford Immunotec's latent tuberculosis test to optimize the throughput and turnaround time. Leveraging its in-house technologies in liquid handling, sample preparation, and laboratory services, PerkinElmer will create a workflow for which it is currently seeking regulatory approvals globally, including in the US, which the company expects "in a few months," Singh said.  

"Longer term, we see even more potential to leverage other pieces of the company with Oxford in the form of new content development from BioLegend," as well as with PerkinElmer's Explorer workstations, "which will bring in even higher levels of automation and throughput to Oxford's offerings," he added. 

On PerkinElmer's Discovery & Analytical Solutions segment, Singh said that he expects it to achieve high-single digit revenue growth by 2023. Within the segment, life sciences is already growing at a double-digit clip. Meanwhile, growth is expected in food safety and applied markets, as well, he said. 

Companywide, PerkinElmer has made nine acquisitions during the past year, Singh noted, and on a pro forma basis, revenues from those acquisitions rose greater than 20 percent in 2021. 

Also, early on Tuesday, PerkinElmer released its preliminary Q4 revenues, saying it anticipates total revenues to decline 1 percent year over year, which would still beat its prior guidance.  

For full-year 2021, the firm said early Tuesday that it anticipates $5.0 billion in total revenues, including $1.5 billion in COVID-19-related revenues. 

Becton Dickinson 

BD currently makes 45 billion devices per year and serves customers in 190 countries while funneling approximately $1 billion back to its research and development programs. It expects to launch more than 100 new products by 2025 with an increasing mix of "higher-growth transformative solutions," as well as to accelerate tuck-in mergers and acquisitions, CEO Tom Polen said. 

Polen expects BD to leverage its durable core business with a $45 billion total addressable market in FY 2021, in order to expand in an area it calls transformative solutions, growing the total addressable market in this realm from $15 billion in 2021 to $25 billion by 2025 through investment in future-looking opportunities with higher returns. 

BD completed 16 M&A transactions since FY2020 and expects to have capacity for up to $2 billion in tuck-in M&A per year going forward.  

The Velano Vascular acquisition is an example of M&A to reinforce the durable core business, he said, while the Scanwell Health acquisition marks an example of the 80 percent of M&A investment now going to transformative solutions. 

Many of the recent acquisitions had "little to no revenue" when they were acquired by BD, but revenues in 2021 from deals closed in FY20 and FY21 were approximately $100 million, Polen noted. "We expect the revenue from these same deals to organically grow 2x in FY22," he added.  

After R&D allocations, BD expects to have $18 billion through 2025 to invest. "After investing organically and returning value in the form of dividends, there is going to be enough capital to support both tuck-in acquisitions and share repurchases with an average of about $2 billion in cash available annually," Polen said. 

Finally, "In FY21 we strengthened our strategic position and also played an essential role in addressing COVID-19," Polen said. He noted that the firm's professional and at-home tests are in higher demand relative to previously communicated guidance, while demand for vaccination devices is as expected.  

"Antigen test pricing, while it is in line with our expectations, is much lower than when the testing first launched, and there are now over 40 rapid antigen tests with [Emergency Use Authorization] in the US market," he noted.  

Overall, BD is "well positioned to create long-term value," Polen said. "Our reliable and strengthened growth profile is supported by a strong core with leadership positions in key categories that will be enhanced by innovation pipeline and tuck-in M&A strategy that is balanced but very purposely indexed towards higher growth areas." 

Agilent Technologies 

Agilent Technologies CEO Michael McMullen highlighted multiple high-growth areas of focus for the company in a Tuesday afternoon session. 

Since fiscal year 2015, Agilent has grown its yearly revenues to $6.3 billion from $4.0 billion and 70 percent of that $2.3 billion difference is attributable to a focus on the high-growth pharma, diagnostics, and research markets, McMullen said. 

"Almost 60 percent of the company's businesses are in pharma, diagnostics, or research markets," he said. These markets are large and continuing to grow for the company. 

McMullen estimated the total addressable market (TAM) in pharma at $19 billion, which is growing at a rate of 5 percent to 7 percent. In fiscal year 2021, revenues from this market totaled approximately $2.2 billion, or 35 percent of revenues. Biopharma, specifically, accounts for about a third of that. 

Cell analysis revenues have grown to more than $375 million and grew by approximately 25 percent, year over year, in 2021. And the $315 million Agilent has invested into oligonucleotide manufacturing has paid off, with more than $225 million in revenues in FY21. "There were lots of questions about whether RNA-based therapeutics would ever go beyond orphan drugs and small patient populations," he said. "Now, there's no doubt there's going to be large on-market commercial demand down the road." 

Diagnostics and clinical, a $17 billion TAM growing at the same rate as pharmaceuticals, drove about $900 million in revenues, or 15 percent of the company's totals. 

And the academic and government market, a $13 billion TAM, is growing at a rate of 3 percent to five percent. In fiscal year 2021, Agilent recorded approximately $600 million from this market, or 9 percent of total revenues. 

During the Q&A session, McMullen said a recent distribution deal signed with Avantor to sell liquid chromatography consumables might help Agilent to "do a better job expanding coverage, especially in academia and government. We've done well historically on instruments; not as well on the aftermarket business." 

Agilent CFO Bob McMahon also noted that the firm has seen "nice growth" for the firm's clinical liquid chromatography and mass spectroscopy business in China. 

Fiscal year 2022 should also be strong, as the company reiterated guidance of total revenues between $6.65 billion and $6.73 billion, representing growth of 5.5 percent to 7 percent year over year, and adjusted earnings per share between $4.76 and $4.86. For Q1 2022, Agilent expects revenues between $1.64 billion and $1.66 billion, representing growth of 5.9 percent to 7.2 percent year over year, and adjusted earnings per share between $1.16 and $1.18. 

Danaher

With exceptionally high growth rates, the Cepheid point-of-care molecular diagnostics business now contributes more than 10 percent of Danaher's overall annual revenues, the firm's President and CEO Rainer Blair said Tuesday.

Cepheid's revenues have grown to $3.5 billion per year, he noted, a fivefold increase from 2016 when Danaher acquired the Sunnyvale, California point-of-care molecular diagnostic company whose installed base has quadrupled since 2016 and doubled since 2019.

The Cepheid business had been growing at a double-digit rate prior to the pandemic, and Danaher anticipates it will grow at a low double-digit pace off of a larger base in a post-pandemic world, Blair said, adding that in the fourth quarter of 2021, based on preliminary estimates, the business had "better-than-expected" respiratory and non-respiratory revenues.

Cepheid shipped almost 60 million tests in 2021, three times more than in 2020, and shipped 19 million tests in Q4, exceeding an earlier estimate of 16 million tests.

In Q4, it saw a pickup in demand for its 4-in-1 test for SARS-CoV-2, influenza A/B, and respiratory syncytial virus, Blair said, adding that about 65 percent of Cepheid's placements are with current customers looking to add capacity and the rest are with new customers looking to expand their test menus.

JP Morgan analyst Tycho Peterson said in a research note on Tuesday that the point-of-care molecular diagnostics market "continues to present a long runway for further penetration" by Cepheid.

Overall, based on its preliminary estimates, Danaher "had a very strong finish to 2021," Blair said. Its fourth quarter core revenue growth is expected to be in the "high teens and materially better than our expectations of low-to-mid teens," he said, adding that the company saw strong performance across all of its business segments.

SomaLogic 

In 2021, proteomics firm SomaLogic launched a new commercial assay that can measure 7,000 human proteins in a single sample, grew its commercial team and customer base, and shifted its business model to one that's much more customer centric, according to CEO Roy Smythe. 

The Boulder, Colorado-based firm on Tuesday also announced preliminary financial results for full-year 2021, saying it expects revenues of more than $79 million, which would top its previously announced full-year 2021 revenue guidance of $77 million to $79 million. 

The company last week announced an exclusive partnership with Illumina to create multiplexed, high-throughput proteomics assays with next-generation sequencing-based readout. According to Smythe, the partners will "develop a cobranded NGS-deployed solution to measure and identify proteins leveraging [SomaLogic's] proteomics platform and Illumina's global infrastructure." 

SomaLogic's SomaScan assay uses aptamer-based affinity reagents, called Somamers, to measure different proteins in a patient sample. Illumina will integrate the aptamer-based protein counting technology with its NGS and bioinformatics platforms. 

"The agreement includes upfront royalty payments, as well as … other revenue considerations for SomaLogic moving forward over time," Smythe said, adding, "It's important to note that this is not simply an agreement to enable the use of our technology on Illumina's platform … This deployed kit solution will be sold by Illumina into its worldwide installed base." 

The collaboration also moves SomaLogic closer to its objective to become "a comprehensive provider of proteomics solutions across both life sciences and clinical diagnostics," Smythe said, adding that over time it plans to "offer both protein identification and measurement capabilities on a variety of platforms and to run our growing diagnostic portfolio of products on these platforms as well." 

He noted that the company has established the Proteomics for Precision Medicine program with five US health systems to evaluate its SomaSignal high-plex pattern recognition diagnostic tests. Last November, SomaLogic announced that it had entered a collaboration with University Hospitals Cleveland Medical Center to evaluate the impact of the tests on managing diabetic patients at high risk of cardiovascular disease. The collaboration added to previously announced agreements around SomaSignal with Emory University, Intermountain Healthcare, CommonSpirit Health, and UCHealth. 

"Our initial efforts have focused on cardiovascular disease, and in 2022, we will add tests to evaluate the risk of neurologic, oncologic, and renal conditions," Smythe said. 

The Boulder, Colorado-based company went public last September in a $630 million merger with a special purpose acquisition company. 

Sophia Genetics 

Bioinformatics firm Sophia Genetics gave 2022 guidance for the first time, saying that it expects full-year revenues of $51.5 million to $54 million, in line with the consensus analyst estimate of $53.2 million. Sophia did not provide preliminary estimates for its pending 2021 fourth quarter and full-year results.  

CFO Ross Muken said that the company expects 2022 growth to come from a mix of new customers and an increase in average selling price due to demand for more detailed data. "This push toward richer and richer analytics per patient will benefit us," he said. 

Sophia added 16 new customers in Q4 that have not yet begun to generate revenue for the company, according to CEO and Cofounder Jurgi Camblong.  

While the North American market represents just slightly more than 10 percent of Sophia's business, Muken said that revenue from the US and Canada has been more than doubling annually since the firm started selling its technology outside Europe in 2019. The greatest growth in the last three to four months has come from North American specialty laboratories, he noted, particularly in oncology. 

Camblong said that North America will eventually be the firm's biggest market but did not give a timeframe. 

Sophia, which has dual headquarters in Saint-Sulpice, Switzerland, and Boston, still gets about 80 percent of its business from oncology, though it is active in other areas including cardiology and rare disorders, according to Camblong. Over the past couple of years, the firm has been branching out from its initial focus on genomic data into proteomics, digital pathology, spatial genomics, transcriptomics, and metabolomics. 

The company created a record 66,000 new genomic profiles in Q4 and 240,000 for the full year, and it had 920,000 patient profiles in its database at the end of 2021, Camblong said. The volume of patient profiles has grown at an average annual rate of 63 percent since the Sophia DDM technology platform launched in 2016. 

Sophia also provided a first update on DEEP-Lung-IV, a multimodal study of metastatic non-small cell lung cancer that it announced at the Radiological Society of North America conference last month. The company is partnering with research institutions to conduct deep learning-based analysis of clinical, biological, genomic, and radiomic data to find and validate markers that might predict immunotherapy response.  

Plans are to follow 4,000 patients at 30 sites worldwide. Sophia said it has signed up 12 sites in five countries so far, including the Carbone Comprehensive Cancer Center at the University of Wisconsin and Assistance Publique-Hôpitaux de Paris in France.  

Cue Health

The COVID-19 pandemic has underscored how important it is for people to be able get accurate diagnostic information in a convenient and timely way, said Cue Health CEO Ayub Khattak.

"Consumers and healthcare workers need to be able to access timely health information for a range of different infectious diseases and manage chronic diseases more effectively," he said, adding that the accuracy and ease-of-use of its COVID 19 test available for home use is one reason it is being adopted by many customers across healthcare enterprises and sports leagues.

The company offers the Cue Health Monitoring System, which consists of a portable reader with a single-use test cartridge and a sample collection wand. Its COVID-19 Test Kit received Emergency Use Authorization from the US Food and Drug Administration in 2020 for use by CLIA-certified labs or at the point of care. The test also received EUA for home and over-the-counter use in March 2021, making it the first molecular test authorized by the agency for home use without a prescription.

Khattak further said that the firm is seeking "to pioneer the digital transformation of healthcare, beginning with diagnostics."

The digital connectivity of its COVID-19 test "is an aspect that we have leveraged to introduce significant new functionality onto the platform, including integrated virtual care with verified results sharing, and the most integrated solution for supervised testing for travel," Khattak said.

For healthcare providers, its test results are integrated into EMR systems, and for public health professionals the firm has enabled automated, epidemiological reporting, he noted

In recently announced preliminary financial results, Cue said it grew from $23 million of revenue in full-year 2020 to $613 to $618 million for full-year 2021, with Q4 revenues coming in at $188 million to $193 million.

"This rapid growth is a result of our ability to ramp production capacity to meet the high demand for Cue," company CFO John Gallagher said, adding that the firm has a strong balance sheet with $412 million of cash and equivalents at year end, including $230 million of gross proceeds obtained in its initial public offering in September.