NEW YORK – With the adoption of its new name, Revvity, the former PerkinElmer life sciences and diagnostics business said it is evolving into a key partner for developers of clinical therapies from biomarker discovery through clinical tests.
In March, the Waltham, Massachusetts-based firm completed its $2.45 billion divestiture of its applied, food, and enterprise services to New Mountain Capital, and this week, it announced the remaining pure-play diagnostics and life sciences firm is adopting a new identity to reflect a mission of accelerating transformation in healthcare.
Alan Fletcher, senior VP of life sciences for Revvity, said the Revvity name — an amalgam of "revolutionize" with the Latin "vita," meaning "life" — helps describe the company's goals of "revolutionizing next-generation scientific breakthroughs that create a healthier future." The 11,000-employee company will be a low-double-digit top-line growth company with operating margins north of 30 percent, he said.
Along with its new name and identity, the firm announced Thursday that for the first quarter ended April 2, revenues declined 30 percent year over year to $674.9 million from $963.2 million in the year-ago period, falling short of the consensus Wall Street estimate of $751.0 million. The firm said that when COVID-19 products were excluded, it had 6 percent organic revenue growth from continuing operations.
In early Thursday trading on the New York Stock Exchange, Revvity's stock was down 7 percent to $115.83. Revvity begins trading as RVTY May 16.
On a conference call, Revvity CEO Prahlad Singh said the renamed company intends to advance science by helping customers invent the next groundbreaking therapeutics and support them on their path to clinical trials.
"Challenging limits and reimagining the impossible are key to advancing science," he said. "But being able to do so rapidly, whether in the R&D lab or in the clinic, can have profound impact on the development of a new drug or the next treatment for a patient."
Singh said the company has shifted from an instrument-heavy business to a more reagent-based model, and it is investing in digital development with the expectation that electronic commerce is going to be a big revenue driver.
Yves Dubaquie, senior VP of diagnostics, said in an interview ahead of Thursday that Revvity is working closely with customers who are developing new therapies from the early stages of R&D, giving "insight into what the next treatments will be, what the next hot areas of science are." That knowledge will inform the company's diagnostics development pathways.
"Think of us as a collection of translational technologies that are highly differentiated," Dubaquie said. "So, we can really analyze the cell, we can analyze proteins, we can analyze genes with our technology platforms, and those differentiated products and services then can be deployed either in research use or in diagnostics."
Dividing the company revitalized its diagnostics and life sciences technologies, with the help of technologies added within the last two years through acquisitions, Fletcher said. The changes have also allowed the diagnostics and life sciences businesses to better share capabilities across its core platforms.
"Think of us as a translational platform company that serves two customer bases" in clinical medicine and research, including customers in academia, biotech, pharma, contract research, and clinical diagnostics, he said.
Fletcher, in an interview, said Revvity's customers are asking for support toward assay development at earlier phases of research into therapies, particularly in the rapidly evolving field of cell and gene therapies. The speed of diagnostic test development during the pandemic has also changed expectations of how quickly other diagnostic tests can be shepherded through regulatory processes.
"I don't think we're going back to the traditional 'It'll take you many, many years to get approval,'" he said. In terms of personalized cell and gene therapies, he said, those rules are still being written and Revvity plans to help customers understand what they need.
The company aims to advance its omics technologies in research and clinical medicine, particularly through services that will help customers understand the biomarkers of disease and provide early detection, Fletcher said. Within the firm and its subsidiaries, Revvity can help researchers modify genes, deliver them to targets, and analyze downstream proteins to see changes in gene expression and determine whether a candidate therapy is working. It can also support them by making companion diagnostics for upcoming therapies.
"The same antibodies that we would use for research tools can go into the diagnostic tools," Fletcher said. "The same platform technologies that we use in research will also potentially be used for new kits that can be developed and licensed."
Revvity also offers automation and informatics services to help low- and high-throughput customers, he said.
Dubaquie said the recent US Food and Drug Administration authorization of the company's Eonis SCID-SMA assay kit for the detection of spinal muscular atrophy and severe combined immunodeficiency in newborns is an example of such a partnership. The real-time PCR test was created in collaboration with Novartis, which makes the gene therapy Zolgensma (onasemnogene abeparvovec) for newborns with SMA.
He said the company can help companies from biomarker discovery through research and development of a therapy to creation of screening or diagnostic tests to identify patients who would benefit from the treatments.
"I think it really puts us into a unique category of life science companies by having all of these different technologies together and being able to offer them in this continuum from research all the way to, ultimately, the cure," Dubaquie said.
Fletcher said these abilities are a product of the company's recent life science expansion through M&A since late in the pandemic.
"This has been Prahlad's vision … and all of the skill sets and capabilities that we added to the portfolio have really led to the point where we are today," Fletcher said.
Singh said on Thursday's call that Revvity has also transformed its internal operations to improve its operating efficiency, R&D productivity, talent diversity and development, and company culture. He also said the company also has a robust pipeline of product introductions slated for the rest of 2023 across its businesses.
In the transition, Revvity is also paring back on old brand names from previous acquisitions.
The firm's Cisbio, Horizon Discovery, Nexcelom Bioscience, Omni International, Oxford Immunotec, Sirion Biotech, and SonoVol will retain their product names but otherwise become Revvity products, the company said in a press release.
Fletcher said certain product lines well recognized in their customer bases will adopt Revvity's branding but retain their own distinct identities within the company. The firm is keeping the franchise names for its BioLegend, Euroimmun, Tulip Diagnostics, and ViaCord lines.
The firm has also renamed its PerkinElmer Genomics business Revvity Omics to reflect a change in not only the company name but also the types of platforms and technologies offered.
Prior to the pandemic, the company had touted its Vanadis NIPT screening platform. Dubaquie said Revvity has been investing in the continued global expansion of that platform and it is gaining good traction. Singh similarly said on Thursday's call that the company is seeing good momentum with the Vanadis product line.
Dubaquie also noted that the company launched in 2022 its research-use tabletop BioQule NGS System for fully automated next-generation sequencing library preparation, which he said is a critical new product introduction because it helps decentralize NGS testing by reducing laborious and difficult steps in library preparation. That instrument could become part of the workflow in diagnostics and processing of NGS panels.
Fletcher said the company also predicts many companies will want to adopt its Pin-point base editing technology that he called "CRISPR to the next level" because of the ability to modify individual bases and reduce the risks of side effects of gene therapies. The firm licensed the technology from Rutgers University and is currently working on proof-of-principle studies as it develops a portfolio of applications.
Q1 Dx revenues retreat 47 percent
On Thursday, the company reported that its Diagnostics segment plunged 47 percent to $346.6 million from $657.3 million as COVID-19 revenues shrank more than 99 percent to $3 million in Q1 2023 from $310 million one year earlier. The firm's immunodiagnostics business grew in the mid-single digits but were weighed down by a decline in non-acute testing revenues in China, although the firm predicts testing in the country will recover in the second half of 2023. Reproductive health diagnostics revenues were flat during the quarter as gains in neonatal testing offset declines in the genomic lab business.
The firm's Life Sciences rose 7 percent to $328.4 million from $306.1 million in the prior year's quarter.
Revvity CFO Max Krakowiak said on Thursday's call that 75 percent to 80 percent of the life sciences segment's revenues come from pharma and biotech, where the business is predominantly focused on preclinical R&D workflows.
"In the first quarter, we saw continued strength in this earlier-stage R&D across our large- and mid-sized customers that make up the vast majority of our revenue," he said, adding that the company saw softening sales to smaller pre-revenue customers that represent about 5 percent of total company revenue.
The firm's research reagents and specialty pharma services, as well as its instruments and related services, both grew in the low double digits during the quarter while informatics revenues declined in the mid-single digits as expected because of the timing of multiyear contract renewals.
Revvity reported net income for Q1 2023 of $569.5 million, or $4.50 per share, compared to $177.0 million, or $1.40 per share, in the year-ago quarter. It also reported an adjusted EPS from continuing operations of $1.01, short of the consensus Wall Street estimate of $1.06.
The firm had $2.27 billion in cash and cash equivalents and $194 million in marketable securities as of April 2.
Revvity forecast revenues of $2.90 billion-$2.94 billion for full-year 2023, compared to analysts' average estimate of $3.15 billion, and adjusted EPS of $4.85-$5.05, compared to analysts' average estimate of $5.16 per share.
"From a profitability perspective, we continue to expect 30 percent operating margins this year, unchanged from our previous guidance," Krakowiak said on the call.