NEW YORK (GenomeWeb) – Bio-Rad Laboratories said after the close of the market on Thursday that its fourth quarter revenues decreased approximately 1 percent year over year.
For the three months ended Dec. 31, 2018, the Hercules, California-based firm reported $617.5 million in revenues compared to $621.3 million in the year-ago period. On a currency-neutral basis, quarterly revenues increased approximately 2 percent year over year. On average, analysts had expected revenues of $609.0 million for the quarter.
Life science segment sales were $239.6 million in Q4, on par with the same quarter last year, and up 2 percent on a currency-neutral basis, which the company said reflected sales of Droplet Digital PCR, gene expression, cell biology, and antibody products, and growth in the Americas and Asia Pacific.
Bio-Rad CFO Christine Tsingos said on a call to recap the earnings that growth in the life sciences division during the quarter was partially offset by an expected decrease in the firm's process media product line and an expected reduction of sales of RainDance products. "The combined decline in sales of RainDance and process media products totals more than $8 million in the fourth quarter," Tsingos said, later adding that the decline was split roughly evenly between the two product lines.
Bio-Rad's clinical diagnostics segment revenues were down approximately 1 percent in the quarter to $373.7 million. On a currency-neutral basis, the segment grew 2 percent due to sales in the immunology, quality control, and infectious disease product lines particularly in the Americas and Asia Pacific.
Bio-Rad's net loss for the quarter was $833.1 million, or $27.88 per share, compared to a net income of $82.7 million, or $2.75 per share, in the year-ago period. On a non-GAAP basis, EPS in Q4 2018 was $2.13 and beat the analysts' average of $1.70.
Bio-Rad said that Q4 net loss was significantly and negatively impacted by the recognition on the income statement of changes in the fair market value of equity securities reflecting a decrease in value of $814.1 million during the fourth quarter of 2018, primarily related to its holdings of Sartorius. Inclusion of these equity investment changes in valuation was the result of new accounting standards that became effective in 2018. Also included in Q4 net loss was an impairment of goodwill of $282 million as well as $18.5 million of other long-lived assets, the company said.
The company's R&D spending during the recently completed quarter was trimmed 30 percent year over year to $53.1 million from $76.0 million, while its SG&A costs were up 5 percent to $212.5 million from $201.7 million. Tsingos noted that the sequential increase when compared to the third quarter of this year is the result of higher employee-related expenses as well as "a significant increase in litigation costs as we vigorously defend our key intellectual property."
For full-year 2018, Bio-Rad's revenues rose 6 percent to $2.29 billion from $2.16 billion in 2017, slightly above the consensus Wall Street estimate of $2.28 billion. On a currency-neutral basis, revenues were up 5 percent year over year.
"This growth reflects strength across many products and regions for both life science and diagnostics," Tsingos said.
Life science segment sales were $861.7 million in 2018, an increase of about 10 percent compared to 2017, and 9 percent on a currency-neutral basis. The growth was driven by continued strong demand for Droplet Digital PCR and growth in cell biology and food safety, with all three areas growing in the double digits for the year, Tsingos said. The firm also saw double-digit growth in life science sales in the US and China.
Full-year clinical diagnostics revenues were $1.41 billion, up almost 4 percent compared to 2017, or 3 percent on a currency-neutral basis. Tsingos noted that the growth was driven by continued momentum in quality controls, blood typing, and autoimmune testing products. "During the year we placed more than 2,000 new instruments around the world, which bodes well for higher consumable sales in the years to come," she added.
Company highlights in 2018 included receiving 510(k) clearance from the US Food and Drug Administration for blood typing instruments, and the launch of the Bio-Plex Pro Human Cytokine Screening Panel, a high-performance multiplex assay that can identify and quantify 48 different analytes linked to heart disease, autoimmunity and allergy, cancer, and other conditions.
In the year the firm also provided an early access launch of its scATAC-Seq solution, a single-cell assay for transposase-accessible chromatin using sequencing. Bio-Rad was also awarded a contract for its iQ-Check real-time PCR pathogen detection test kits and the iQ-Check Prep Automation System from the United States Department of Agriculture’s Food Safety and Inspection Service.
During the call, John Hertia, president of the clinical diagnostics group, noted that traction for blood typing products in the US has been strong, adding that the firm has also submitted its IH-500 blood typing instrument to the FDA in Q4.
Annette Tumolo, president of the life science group, said that the FDA clearance of the firm's QXDx ddPCR instrument and assay for CML in Q1 of 2019 is "really the first important step" in building the firm's oncology menu focused on liquid biopsy and emphasized that users can develop lab-developed tests on the QXDx instrument as well. Bio-Rad expects a follow-on effect for people adopting the platform putting their own content on it, she said. Additionally, "We've talked a little bit about our next-generation [ddPCR] platform where we are integrating the full workflow inside of one instrument, and we are on track to get that product released and available for sales by the fourth quarter of this year," Tumolo said. The firm is also working on two new next-generation single-cell products, she said.
Bio-Rad's 2018 net income was $361.0 million, or $11.94 per share, compared to $122.2 million, or $4.07 per share in 2017. Non-GAAP EPS was $5.84 and beat the analysts' average estimate of $5.42 per share.
The company's R&D spending shrunk 20 percent year over year to $199.2 million from $250.2 million. It's SG&A increased 3 percent to $833.3 million from $806.8 million.
Bio-Rad exited 2018 with $431.5 million in cash and cash equivalents.
The company anticipates currency neutral revenue growth of approximately 4.0 to 4.5 percent for the full year 2019.
Shares of Bio-Rad climbed 18 percent to $48.11 in early Friday morning trading on the Nasdaq.