IVD Firms Grow During 2022, but COVID-19 Revenue Dropped

Point-of-care testing services appear to be a bright spot for in vitro diagnostics

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MOST MAJOR IN VITRO DIAGNOSTICS (IVD) MANUFACTURERS started strong in 2022 as their base businesses regained steam and made up for the significant falloff in COVID-19 diagnostic test revenue. 

During first quarter 2022 earnings calls with investors, leaders at publicly traded IVD companies said clinical laboratories are interested in expanding test menus on technology platforms previously used for COVID-19 testing. 

SARS-CoV-2 testing will continue to be needed, they said, but it will make significantly less contribution to bottom lines. The pandemic also has propelled some of the IVD companies to accelerate point-of-care (POC) testing outside of medical laboratories. This would be consistent with the trend of more consumers wanting to buy their own diagnostic tests. 

IVD manufacturers during quarter one were impacted by supply chain challenges and COVID-related lockdowns in China. Clinical laboratory directors and pathologists will note some common developments, based on the recent earnings reports: 

At-home testing for SARS-CoV-2 proved to be profitable. It is likely the public will continue to grow more comfortable testing themselves for a variety of infections and health conditions. 

Consolidation of the IVD market continues, with two companies in The Dark Report’s list of the Top Global IVD Companies involved in acquisitions during the last 12 months. 

Here is a summary of information released by 13 of the leading IVD companies. (For past coverage of the IVD market, see TDR, “IVD Companies Report Record Sales as 2021 Draws to Close,” Dec. 21, 2021, and “Rankings of the World’s Largest IVD Corporations,” Sept. 7, 2021.) 

Roche-logo

ROCHE: Diagnostics Revenue Up 24%, Huge Jump in POC Services 

Roche Group, in Basel, Switzerland, reported “good momentum” in Q1 2022: 

  • Group sales increased 11% to 16.4 billion Swiss francs (CHF) (US$10.7 billion). 
  • Diagnostics revenue climbed 24% to 5.3 billion CHF (US$5.4 billion). 
  • COVID-19 testing sales were $1.9 billion CHF (US$1.98 billion) and expected to fall later in the year. 

“We started the year with strong demand for our diagnostics base business, our broad portfolio of COVID-19 tests, and our new medicines,” said CEO Severin Schwan. 

During an earnings call, Thomas Schinecker, PhD, CEO at Roche Diagnostics, released these details on diagnostics sales: 

  • Core lab revenue increased 6% to 1.8 billion CHF (US$1.83 billion)—immunodiagnostics up 11% and clinical chemistry up 8%. 
  • POC services increased 82% to 1.4 billion CHF (US$1.43 billion)—POC immunodiagnostics up 107%. 
  • Molecular lab increased 19% to 1.1 billion CHF (US$1.12 billion)—POC molecular up 83%.
  • Pathology lab grew 13% to 318 million CHF (US$325 million)—advanced staining up 14% and companion diagnostics up 19%. 

Roche announced a molecular test aimed at differentiating SARS-CoV-2 Omicron variants “in hours versus a week for sequencing,” he explained. 

Also, Roche is collaborating with Bristol Myers Squibb on artificial intelligence (AI) and digital pathology patient treatments. (See TDR, “Intelligence: Late- Breaking Lab News,” April 25, 2022.) 

Thermo-fisher-logo

THERMO FISHER: Clinical Laboratory Products and Services Segment Soars 51% 

Thermo Fisher Scientific in Waltham, Mass., shared data on Q1 2022 revenue overall and for its business segments as compared to Q1 2021: 

  • Revenue increased 19% to $11.8 billion, compared to $9.9 billion. 
  • Laboratory products and services segment soared 51% to $5.4 billion from $3.5 billion. 
  • Analytical instruments revenue was up 9% to $1.5 billion from $1.3 billion. 
  • Life sciences revenue grew 1% to $4.2 billion. 
  • Specialty diagnostics revenue fell 8% to $1.4 billion from $1.6 billion. 

During the first quarter earnings call, Chief Financial Officer Stephen Williamson told investors growth in clinical diagnostics was strong. “In the first quarter, we saw a strong underlying growth in our healthcare market channel, transplant diagnostics, and clinical diagnostics businesses, which was [enough to] offset lower COVID-19 testing revenue versus the year-ago quarter.” 

Thermo Fisher plans to pursue precision medicine, said CEO Marc Casper during the call. “We signed an agreement with precision diagnostic company, Oncocyte, to develop two new assays … to improve cancer tumor profiling and advanced precision medicine,” he said. 

In response to an analyst’s inquiry, Casper said China’s COVID-related lockdowns and customers’ closed businesses are impacting revenue from that nation. “We’re predicting that in the back half of the year Q3 and Q4 are normal in China,” he said. 

Daneher-logos

DANAHER Corporation: Diagnostics Jumps Nearly 22% as Patients Resume Screenings 

For Danaher in Washington, Q1 2022 shaped up well year over year: 

  • Sales grew 12% to $7.6 billion. 
  • Life sciences revenue rose 9.5% to $3.8 billion. 
  • Diagnostic revenue increased 21.5% to $2.6 billion. 

“The clinical diagnostic market volumes remain at healthy levels in most geographies as patients are returning for wellness checks, routine screenings, and other elective procedures,” said CEO Rainer Blair during an earnings call. 

Danaher foresees customers using the company’s technology for other tests as COVID-19 transitions to an endemic disease. Customers, including some who purchased Danaher’s COVID-19 instruments, have expressed interest in expanding their test menus, Blair noted. The company also wants to sell more of its POC molecular testing products. 

Becton-Dickinson-logo

BECTON, DICKINSON AND COMPANY: Base Business Earnings Up, COVID-19 Revenue Down 

For Becton, Dickinson and Company (BD) in Franklin Lakes, N.J., the period ending March 31 marked the end of the company’s second quarter (Q2). BD released the following financial data:

  • Revenue increased 2.1% to $5 billion in Q2 from $4.9 billion in Q2 2021 due to growing revenue from base business amid COVID-19 testing declines. 
  • COVID-19 testing revenue fell to $214 million from $474 million in Q2 2021. 
  • Revenue in life sciences, which includes diagnostics services, was down 6.4% to $1.4 billion in Q2 from $1.5 billion in Q2 2021. 

“We delivered another quarter of strong growth across our base business through continued, focused execution despite a dynamic and challenging macro environment,” said CEO Thomas Polen. 

BD managers told investors during an earnings call that the company experienced higher than anticipated demand for its new flu/COVID-19 combination test and strong demand for specimen management products by labs resuming pre-COVID-19 workflows. 

Abbot-logo

ABBOTT LABORATORIES: COVID-19 Testing at $3.3B, Diagnostics Sales Climb 32% 

Abbott in Abbott Park, Ill., shared data on the company’s performance during Q1 2022: 

  • Total sales increased 13.8% to $11.9 billion. 
  • Diagnostics sales soared 31.7%, up to $5.3 billion. 
  • Global COVID-19 testing sales were $3.3 billion mostly due to at-home rapid testing products. 
  • Excluding COVID-19 testing-related sales, core laboratory diagnostics and molecular diagnostics sales increased 2.4% and 24.8%, respectively. 

During an earnings call, CEO Robert Ford attributed Q1 performance to solid laboratory instrument sales and growing test menus. In response to a caller’s question about the company’s future momentum, Ford said Abbott has an opportunity to escalate POC testing. “COVID-19 has allowed us to further accelerate what we believe was a key trend in diagnostics, which is the expansion and decentralization of that testing outside of the lab into pharmacies, into people’s homes, and it being connected,” he added. 

Bio-Rad-logo

BIO-RAD LABORATORIES: Sales Down Slightly, World Events Impacting Earnings 

Bio-Rad Laboratories, in Hercules, Calif., shared these Q1 2022 results: 

  • Sales of $700.1 million were down 3.7% to $726.8 million. 
  • COVID-19 testing revenue was $45 million, compared to $94 million in Q1 2021. 
  • Clinical diagnostics sales fell 1.9% to $351.8 million. 
  • Life sciences sales were down 5.3% to $347.2 million. 

CEO Norman Schwartz noted effects of world events on the company’s financial indicators. “We are encouraged by the underlying strength of our core business as COVID-related contributions subside,” he said. “We continue to monitor key macro issues, such as pandemic-related lockdowns in China, the Russia invasion of Ukraine, and the supply chain environment—all with an eye to managing accordingly.” 

Siemens-logo

SIEMENS HEALTHINEERS: Diagnostics Gets 37% Boost from Rapid Antigen Tests 

Siemens Healthineers reported on the period ending March 31. The company in Erlangen, Bavaria, Germany, released the following Q2 figures: 

  • Revenue growth of all segments grew to €5.5 billion (US$5.81 billion), which was 15.8% over Q2 2021. 
  • Diagnostics revenue grew to almost €1.8 billion (US$1.9 billion), a 37.2% jump. 
  • Rapid COVID-19 antigen tests earned nearly €680 million (US$718.5 million),compared to €190 million year over year. 

Much of the overall revenue growth was attributed to the sale of rapid at-home tests, the company stated. 

“Despite the macroeconomic and geopolitical challenges, comparable revenue growth was excellent at 16%,” CEO Bernd Montag told investors in an earnings call. “This was driven by outstanding 37% growth in diagnostics, including €680 million of rapid antigen test sales.” 

However, supply chain restrictions remained a concern for company executives, as did prolonged lockdowns in China. “The lockdowns in China at the end of the quarter impacted revenues, mostly in the diagnostics business,” said CFO Jochen Schmitz, PhD. 

bioMerieux-logo

BIOMÉRIEUX: Business Environment Evolves, Microbiology Sales Grow 

For bioMérieux, in Marcy-I’Étoile, France, microbiology and industrial applications growth made up for lower results in other areas during Q1 2022: 

  • Sales fell 0.9% to €837 million (US$879 million) compared to Q1 2021. 
  • Clinical applications sales (84% of company sales) decreased 6.3% to €703.7 million (US$741.5 million). 
  • Molecular biology sales decreased 6.7% to €319 million (US$335 million). 
  • Microbiology sales were up 4.9%, to €266.8 million (US$281.2 million). 
  • Immunoassay sales were down 15.9% to €104.5 million (US$110.2 million). 
  • Industrial applications, including reagent sales, grew 6.1% to €133.4 million (US$140.6 million). 

“Sales growth was particularly solid in both microbiology and industrial applications and in line with our expectations on molecular biology and immunoassays,” said CEO Alexandre Mérieux. 

Sysmex-logo

SYSMEX CORPORATION: Sales Up 22% During Nine-Month Reporting Period 

Sysmex in Hyōgo, Japan, reported financial results for nine months of its fiscal year ending March 31: 

  • Sales of ¥258.9 billion (US$1.9 billion) were up 22.2% as compared to 2021. 
  • Sales in North America grew 31.7% to ¥55,848 million (US$429 million). 

During an earnings call, a Sysmex spokesperson said, “In the hematology field, sales increased by double digits due to a recovery in the number of tests that had declined due to the impact of the coronavirus, growth in instrument sales in the Americas, and an increase in reagent sales.” 

Sysmex announced plans to pursue regulatory review and market its automated hematology analyzers outside of Japan. 

Hologic-logo

HOLOGIC: Omicron Leads Women to Postpone Routine Diagnostic Visits 

Women’s health company Hologic in Marlborough, Mass., announced its Q2 earnings ending March 26: 

  • Revenue decreased to $1.4 billion for Q2, 6.6% less than Q2 2021. 
  • Diagnostics revenue decreased 7.3% to $987.1 million. 
  • COVID-19 revenues, including assay revenue of $584.1 million decreased 13.8%. 
  • Excluding COVID-19 earnings, diagnostics saw a 2.8% increase in revenue year over year. 

“The [diagnostic] division’s results early in Q2 were negatively impacted by the Omicron COVID-19 variant,” CFO Karleen Oberton noted in an earnings call. “Our base diagnostics business is inversely correlated to spikes in the pandemic, as women tend to postpone office visits when COVID-19 cases surge.” 

For example, female patients likely postponed cytology and perinatal appointments during the Omicron spike. 

“Our cytology and perinatal businesses were essentially flat compared to the prior year as these segments were also impacted by COVID-19’s influence on women’s wellness visits,” Oberton said. 

Quidel-logo

QUIDEL: Q1 Revenue Surges to $1b, Ortho Clinical Deal Finalizing 

San Diego-based Quidel released these Q1 results: 

  • Revenues increased 167% to $1 billion from $375.3 million year over year. 
  • Sales of COVID-19 products increased 211% to $836.1 million, from $269.1 million. 
  • Sales of influenza products were $89.1 million compared to $16.4 million. 

Quidel reported its revenue increase was largely due to soaring sales of at-home COVID-19 tests, which were lightly affected by decreased sales of cardiometabolic immunoassays and molecular diagnostic products. 

Meanwhile, flu-related sales show there is demand for traditional seasonal illness testing, CEO Doug Bryant noted during an earnings call. 

“This highlights the importance of diagnostic testing and the significance of having a differentiated menu, which is part of our post-pandemic strategy to widen our point-of-care footprint and introduce our full portfolio of assays to both patients and healthcare providers,” Bryant said. 

Quidel is expected to close on its $6 billion acquisition of Ortho Clinical Diagnostics at the end of May. (See TDR, “Ortho Clinical Diagnostics to Be Acquired by Quidel,” Jan. 10, 2022.) 

This acquisition will give Quidel a higher ranking on the list of the world’s largest IVD manufacturers. 

Ortho-logo

ORTHO CLINICAL: Steady Earnings Despite Supply Chain Mishaps 

Separately, Ortho Clinical Diagnostics, in Raritan, N.J., released these Q1 2022 financial results: 

  • Revenue decreased 0.9% to $495 million from $499.3 million in Q1 2021. 
  • Revenue in the Americas was down 1.2% to $310.3 million from $313.9 million in Q1 2021. 

“We believe revenue growth would have been two to three percentage points higher if we had been able to ship all the products that had been negatively affected by supply chain challenges,” said CEO Chris Smith. 

During an investor presentation, Ortho Clinical noted other highlights: 

  • Clinical lab revenue declined 4% but grew 1% year over year excluding COVID-19 testing. 
  • Transfusion medicine grew 11% with gains in immunohematology. 

DiaSorin-logo

DIASORIN: Serology and Molecular Diagnostics Boost Revenue 

DiaSorin in Saluggia, Italy, intends to strengthen its molecular diagnostics market via its acquisition of Luminex, a biotechnology testing firm in Austin, Texas. 

DiaSorin—a new addition to The Dark Report’s top IVD companies reporting— released these Q1 results: 

  • Revenue grew 34.1% to €358 million (US$377 million) compared to Q1 2021. 
  • COVID-19 serology and molecular tests decreased 5.2% to €97 million (US$102 million). 
  • Molecular diagnostic revenue (without COVID-19 testing) grew 137.6% to €46.3million (US$48.8 million) due to the Luminex inclusion. 

During an earnings call, CEO Carlo Rosa noted that DiaSorin is growing its business in U.S. hospital labs. 

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