Top 20 R&D Spenders among Tool and Tech Companies

Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

These Businesses Invested the Most toward Developing Instruments for Innovative Life Science Research

Biotech tool and technology companies are seeing the same cost spiral and consolidation wave that has reshaped drug developers in recent years. On the cost side, the lowest-ranked firm on this year’s GEN List of Top 20 R&D Spenders among Tool and Tech Companies spent $48 million-plus, which is $10 million more than the number-20 company spent in 2013 (see GEN’s 2014 List). Three companies failing to make the latest top 20 (Fluidigm, Luminex, and Sartorius Stedim Biotech) all spent more on R&D than the $38 million-plus reported by the bottom company for 2013. Fluidigm’s $43.423 million in 2014 is more than double its R&D spending a year earlier.

Sartorius Stedim Biotech made our top-20 R&D spending list published last year for the years 2012 and 2013. And the company actually spent 7.1% more last year (€38.563 million, or $42.450 million) compared to 2013. But the Euro’s value has fallen significantly since then, explaining the company’s absence from this year’s list. All companies reporting their results in Euros saw a year-over-year dropoff when their figures were converted to dollars. The other company that appeared in our list in 2014 that does not appear this year, Sequenom, cut its R&D spending to $25.005 million in 2014, which is 25% below its 2013 level, as part of a companywide restructuring that included layoffs.

Only four top-20 companies reduced R&D spending between 2013 and 2014—and to be fair, two of those four cut their budgets by less than 2%. That contrasts with the drug development world, where companies increasingly pursue R&D through external collaborations or acquisitions rather than in-house.

As for consolidations, the wave continues in tools/tech. This year’s list is likely to be the last hurrah for two tools companies that are being bought by larger suitors—Sigma-Aldrich (being acquired by Merck KGaA) and Pall Life Sciences (part of Pall Corp., being acquired by Danaher). In a similar vein, the 2013 list marked the final appearance for Life Technologies (acquired by Thermo Fisher Scientific) and Complete Genomics (acquired by BGI Shenzhen).

Below are 20 publicly-traded life science tool and technology providers listed in ascending order by R&D spending as disclosed in regulatory filings, annual reports, and/or press announcements. Listings include R&D spending for 2014 and 2013, and the percentage difference between the two years.

#20. Pacific Biosciences

2014 R&D spending: $48.230 million

2013 R&D spending: $45.217 million

% Change: 6.7%

#19. Affymetrix

2014 R&D spending: $50.227 million

2013 R&D spending: $47.670 million

% Change: 5.4%

#18. Integra Biosciences

2014 R&D spending: $51.596 million

2013 R&D spending: $52.088 million

% Change: -0.1%

#17. Sigma-Aldrich¹

2014 R&D spending: $65 million

2013 R&D spending: $66 million

% Change: -1.5%

#16. Pall Life Sciences^2,3

2014 R&D spending: $65.594 million⁴

2013 R&D spending: $61.483 million⁴

% Change: 6.7%

#15. Cepheid

2014 R&D spending: $96.851 million

2013 R&D spending: $80.197 million

% Change: 20.8%

#14. Waters

2014 R&D spending: $107.726 million

2013 R&D spending: $100.536 million

% Change: 7.2%

#13. PerkinElmer

2014 R&D spending: $121.141 million

2013 R&D spending: $132.400 million⁵

% Change: -8.5%

#12. Mettler-Toledo International

2014 R&D spending: $123.297 million

2013 R&D spending: $116.346 million

% Change: 6.0%

#11. Qiagen

2014 R&D spending: $163.627 million⁶

2013 R&D spending: $146.070 million

% Change: 12.0%

#10. Bruker

2014 R&D spending: $174.2 million

2013 R&D spending: $190.5 million

% Change: -8.6%

#9. Merck Life Science⁷

2014 R&D spending: $179.0 million (€ 162.6 million)

2013 R&D spending: $175.9 million⁸ (€ 159.8 million)

% Change: 1.8%

#8. Bio-Rad Laboratories

2014 R&D spending: $220.333 million

2013 R&D spending: $210.952 million

% Change: 4.4%

#7. Illumina

2014 R&D spending: $388.055 million

2013 R&D spending: $276.743 million

% Change: 40.2%

#6. Danaher Life Sciences & Diagnostics⁹

2014 R&D spending: $507 million

2013 R&D spending: $476 million

% Change: 6.5%

#5. BD (Becton, Dickinson & Co.)

2014 R&D spending: $550 million¹⁰

2013 R&D spending: $494 million¹⁰

% Change: 11.3%

#4. Thermo Fisher Scientific

2014 R&D spending: $691.1 million¹¹

2013 R&D spending: $395.5 million

% Change: 74.7%

#3. Agilent Technologies

2014 R&D spending: $719 million¹²

2013 R&D spending: $704 million¹²

% Change: 2.1%

#2. GE Healthcare¹³

2014 R&D spending: Approx. $1 billion¹⁴

2013 R&D spending: Approx. $1 billion¹⁴

% Change: Unchanged

#1. Roche – Diagnostics Division¹⁵

2014 R&D spending: $1.596 billion  (CHF 1.515 billion)

2013 R&D spending: $1.138 billion¹⁶  (CHF 1.081 billion)

% Change: 4.0%

¹ On September 22, 2014, Sigma-Aldrich agreed to be acquired by Merck KGaA for $17 billion. “Both companies continue to work toward a closing date of mid-2015,” Sigma-Aldrich said June 15, in its announcement that the acquisition won conditional clearance from the European Commission. Previously, the deal won approvals from authorities in the U.S., China, Japan, Russia, Serbia, South Africa, Taiwan, and Ukraine.
² Pall Life Sciences is one of two business groups of Pall Corp., and accounted for more than half of the parent company’s total $102.601 million recorded in R&D spending for 2014.
³ On May 13, Danaher disclosed plans to acquire Pall for about $13.8 billion, then split into two independent, publicly-traded companies.
⁴ Pall’s fiscal years encompass the 12 months ending July 31
⁵ Figure restated from the $133.023 million reported for 2013 last year in a Form 10-K filing, and published by GEN in last year’s List. The restatement reflects the subtraction of R&D expenses from discontinued operations. See Note 3, page 68 of Form 10-K filing for 2014.
⁶ Qiagen is headquartered in Venlo, The Netherlands, but reports its financial results in U.S. dollars on its Form 20-F annual filing with the U.S. Securities and Exchange Commission.
⁷ Merck Life Science is the division of Merck KGaA that supplies products and services for the life science industry. The division comprises three business areas: Bioscience, Lab Solutions and Process Solutions, as well as multiple specialized business fields.
⁸ 2013 dollar figure differs from the $217.4 million published in last year’s GEN List of Top 20 R&D Spenders Among Tools and Technology Companies, reflecting currency fluctuations since then.
⁹ Life Sciences & Diagnostics is the segment of Danaher Corp. that provides tools for biopharma research. Danaher’s life sciences business offer research and clinical tools used by scientists to study cells and cell components. Danaher’s diagnostics businesses offer analytical instruments, reagents, consumables, software and services used by hospitals, physician’s offices, reference laboratories and other critical care settings.
¹⁰ BD’s fiscal years encompass the 12 months ending Sept. 30.
¹¹ 2014 figure reflects Thermo Fisher’s acquisition of Life Technologies, announced April 13, 2013, and completed Feb. 3, 2014.
¹² Agilent’s fiscal years encompass the 12 months ending Oct. 31.
¹³ Includes GE’s drug discovery and biopharmaceutical manufacturing technologies businesses, as well as businesses focused on medical imaging and information technologies, medical diagnostics, and patient monitoring systems. In March 2014, the company finalized its acquisition of Thermo Fisher Scientific's cell culture, gene modulation and magnetic beads businesses for $1.1 billion.
¹⁴ 2014 and 2013 figures furnished to GEN by a company spokesman.
¹⁵ Includes Roche’s Professional Diagnostics, Diabetes Care, Molecular Diagnostics, and Tissue Diagnostics businesses. On April 23, 2013, Roche announced that the Applied Science business area’s portfolio of products would be integrated within the division’s other business areas. The polymerase chain reaction technology (PCR), the nucleic acid purification (NAP) and biochemical reagents lines are now managed by Molecular Diagnostics. The Custom Biotech portfolio has moved to Professional Diagnostics. A dedicated unit has been established to focus solely on sequencing.
¹⁶ 2013 dollar figure differs from the $1.210 billion published in last year’s GEN List of Top 22 R&D Spenders Among Tools and Technology Companies, reflecting currency fluctuations since then.