This article has been updated from a previous version to include comments from Bio-Rad's earnings call.
NEW YORK (GenomeWeb) – Bio-Rad said after the close of the market Thursday that its third quarter revenues increased 5 percent year over year.
For the three months ended Sept. 30, the Hercules, California-based life science research and clinical diagnostics firm tallied sales of $535.0 million compared to $508.7 million in the year-ago period, beating analysts' average estimate of $508 million. On a currency-neutral basis, net sales grew 3 percent in the quarter.
Life Science segment sales were $193.6 million in Q3, up 9 percent from the year-ago period. On a currency-neutral basis Life Science sales increased 8 percent.
Growth in this segment was driven by sales of Droplet Digital PCR, food safety, and gene expression products, as well as sales from RainDance Technologies, which Bio-Rad acquired in February for approximately $75.2 million after originally announcing the deal in January. Bio-Rad said growth in this segment was somewhat offset by a decline in process chromatography media sales.
On a call following the release of the company's financial results, Bio-Rad CFO Christine Tsingos noted that the RainDance acquisition was technology- and intellectual property-driven, but that there may also be sales opportunities in that RainDance had a "good base business," with the vast majority being a single customer, Myriad Genetics.
Clinical Diagnostics sales grew 3 percent year over year in Q3 to $338.0 million. On a currency-neural basis, Clinical Diagnostics grew 1 percent. Currency-neutral sales growth was primarily driven by increases in blood typing, immunology, and quality control product lines.
The firm has seen good traction with the IH-1000 blood typing instrument, Tsingos said. The instrument has been commercially available since 2016 and was recently cleared to run with software enhancements. The firm did not provide placement numbers, but Tsingos noted placements were ahead of its internal forecasts and the companty expects more of an impact in 2018.
Bio-Rad's net income in Q3 was $27.4 million, or $.91 per share, compared to $18.4 million, or $.62 per share in year-ago period. The company did not provide an adjusted EPS figure. On average, analysts had expected EPS of $.38.
Net income was favorably impacted by a higher gross margin and lower SG&A expenses, which included a decrease in contingent consideration, professional services, and legal settlement expense. Net income was also somewhat offset by $8.4 million of additional expense associated with the company's closure of the GnuBio research program.
"We were spending in the low $20 million a year on [the GnuBio] operation," Tsingos noted. "There will be some savings in fourth quarter, but the bolus of the savings will come in 2018," she said, adding that the firm plans to redirect some of that spending into areas like liquid biopsy.
Bio-Rad's Q3 R&D expenses grew 23 percent to $61.4 million from $49.9 million, while its SG&A expenses dropped 2 percent to $196.8 million from $201.5 million.
Bio-Rad finished the quarter with $328.9 million in cash and cash equivalents and $392.1 million in short-term investments.
For the fourth quarter Bio-Rad anticipates net sales of $615 to $625 million, which includes sales from RainDance and assumes using current foreign exchange rates.