Top Public IVD Companies Report Q3/Q4 2022 Earnings

Many firms looking beyond SARS-CoV-2, with testing demand generally dropping year over year

IT WAS A MIXED BAG OF THIRD QUARTER FINANCIAL RESULTS for the nation’s largest in vitro diagnostics (IVD) manufacturers, with COVID-19 testing volume a contributing factor. 

Fluctuating demand for SARS-CoV-2 testing proved perplexing, as some IVD companies saw an increase in sales of these tests, while some IVD firms reported a nosedive in related test earnings. Meanwhile, global supply chain challenges caused some businesses to delay instrument rollouts. 

Generally, IVD companies expect demand for COVID-19 diagnostics to level off, even as they experience growth in their sales pipelines for analyzers, tests, and associated products. 

Here is a summary of reported diagnostics sales, IVD industry challenges, company product launches, and projected growth plans for a post-COVID-19 pandemic market. 

Roche-logo

ROCHE: Diagnostics Division Grows 6% Thanks to Core Business 

Roche, in Basel, Switzerland, said its diagnostics division sales remained strong even as demand for COVID-19 testing fell sharply in Q3. Roche shared this data: 

Group sales grew 2% to 47 billion Swiss francs (CHF) (US $47 billion). 

Diagnostics division year-to-date sales increased 6% to 13.8 billion CHF (US $14 billion). 

COVID-19 tests sales were significantly lower at 600 million CHF (US $608 million) in Q3 as compared to one billion CHF (US $1.06 billion) in Q3 2021. 

“Group sales are up by 2% … in spite of the sharp decline we have seen with our COVID-related sales,” said Roche CEO Severin Schwan during an earnings call. “All of that was only possible because of the strong growth of the underlying business of our newer medicines and the strong performance of the base business in diagnostics.” 

During an earnings call, Thomas Schinecker, PhD, CEO at Roche Diagnostics, reported these year-to-date details on Q3 diagnostics sales: 

  • Core lab product sales increased 5% to 5.8 billion CHF (US $5.8 billion). 
  • Point-of-care sales went up 30% to three billion CHF (US $3.04 billion). 
  • Molecular lab sales decreased 8% to 2.7 billion CHF (US $2.7 billion). 
  • Pathology lab sales grew 10% to 975 million CHF (US $989 million). 
  • Diabetes care sales fell 3% to 1.2 billion CHF (US $1.2 billion). 

Since the onset of the pandemic, Roche has delivered 1.8 billion SARS-CoV-2 tests and sold approximately 2,000 Cobas 6800/8000 systems, which run automated PCR-based nucleic acid testing. 

“In the meantime, with the launch of [Cobas] 5800 at the end of last year outside of the U.S.—we’re still waiting for the U.S. approval—we’ve had more than 250 placements there as well,” Schinecker said. The compact Cobas 5800 runs real-time PCR molecular testing for low-volume labs. 

Schinecker also expressed confidence about the Elecsys amyloid plasma panel, which received breakthrough device designation from the U.S. Food and Drug Administration (FDA) in July to address early detection of Alzheimer’s disease. 

Becton-Dickinson-logo

BECTON, DICKINSON AND COMPANY: Revenue Down Slightly 

Becton, Dickinson and Company (BD) in Franklin Lakes, N.J., shared data for its Q4 ending Sept. 30: 

Revenue decreased 1.8% to $4.8 billion. 

Life sciences revenue, which includes diagnostics, was down 5.8% to $1.2 billion. 

“COVID-only testing revenues were $37 million [in Q4], which is an expected decline from $316 million last year,” Executive Vice President and CFO Christopher DelOrefice said during an earnings call. 

Commenting on the long-term view for labs and hospitals, Thomas Polen, President and CEO, noted external forces that will shape the future of the healthcare industry. “There’s an increasing need for digitalization and automation of healthcare processes as providers look for ways to increase efficiency and address labor and inflationary challenges,” Polen said.

Thermo-Fisher-logo

THERMO FISHER: Overall Revenue Up, but Diagnostics Down 30% 

Thermo Fisher Scientific in Waltham, Mass., reported these Q3 financial results: 

  • Revenue grew 14% to $10.6 billion. 
  • Life sciences segment revenue was down 12.2% to $2.9 billion. 
  • Laboratory products and services segment revenue increased 14.9% to $5.8 billion. 
  • Analytical instruments segment revenue was flat at $1.6 billion. 
  • Specialty diagnostics segment revenue fell 4.6% to $1 billion. 

“In diagnostics and healthcare, as expected, our revenue was approximately 30% lower than the prior year quarter,” said CEO Marc Casper in an earnings call. He tempered that news by adding, “We delivered good core business growth, led by our microbiology and transplant diagnostics businesses.” 

The company expects to take in $2.8 billion in total COVID-19 testing revenue by year’s end, but that number will drop significantly in the future based on current testing demand. COVID-19 testing revenue was $440 million in Q3. 

“We’re assuming in the fourth quarter that we’re at an endemic level of COVID- 19 testing,” Casper said. “So, that’s $100 million of revenue in the quarter. And if that plays out in that way, then I think that’s a reasonable assumption per quarter for next year.” 

During the earnings call, an analyst asked about raised prices for products and services because of inflation. “We’re passing through an appropriate level of pricing to reflect real cost increase, and we’re helping our customers through this period of time,” Casper responded.

Danaher-logos

DANAHER Corp.: Sales Leveling Off after ‘Red-Hot Pandemic’ 

Danaher in Washington, D.C., reported its Q3 results: 

  • Sales grew 6% to $7.7 billion. 
  • Diagnostics segment revenue was up 9.5% (specific dollar amounts were not given). 
  • Molecular diagnostics revenue grew 10%. 

Beckman Coulter is part of Danaher. “Beckman Coulter Diagnostics delivered solid results, with mid-single-digit core growth despite ongoing COVID-19 headwinds in China,” said Danaher CEO and President Rainer Blair during an earnings call. Rainer credited a May platform launch from Leica Biosystems, another Danaher company, for healthy initial interest from customers. 

“As customers seek to improve productivity with their labs, we’re seeing strong early momentum for Leica’s recent [release of] Bond-Prime—a fully automated advanced staining platform,” Blair added. Danaher’s genomics business also enjoyed another quarter of double-digit core revenue growth. 

In response to an analyst’s question about growth potential, Blair described orders coming within the context of a major market readjustment. 

“What we’re seeing now is the normalization of the marketplace coming from a red-hot pandemic, where orders ramped up significantly,” Blair explained. “Now, orders are normalizing, and customers are adjusting their order cadence. And the COVID-19 volumes are down. But we also see the strength of the non-COVID-19 market. That is much larger market, and currently it is growing at well over 20% as there is a backlog.” 

Abbott-logo

ABBOTT LABORATORIES: Diagnostic Sales Down 6%, Demand for COVID- 19 Rapid Tests Continues 

Abbott in Abbott Park, Ill., released these Q3 numbers: 

  • Total sales decreased 4.7% to $10.4 billion. 
  • COVID-19 testing sales were $1.7 billion, down from $1.9 billion a year earlier. 
  • Diagnostic sales fell 6.2% to $3.6 billion. 
  • Core laboratory sales were down 5.6% to $1.2 billion. 
  • Molecular sales plunged 47% to $183 million. 
  • Point-of-care sales decreased 5.6% to $127 million. 
  • Rapid diagnostics sales were up 0.1% to $2.1 billion. 

“Inflation continues to be a stubborn force globally, but we’ve started to see some moderating impacts in certain areas of our businesses compared to earlier in the year,” CEO Robert Ford said during an earnings call. “COVID-19 remains an unpredictable as ever with intermittent surges continuing throughout the world. And, lastly, global supply chain dynamics and staffing shortages continued to impact our healthcare markets.” 

He noted less demand of laboratory-based COVID-19 tests, while sales of rapid tests were strong and consistent with Q3 2021. However, Ford anticipated COVID-19 to continue its path to endemic status in Q4 and 2023. 

“Excluding COVID-19 testing revenues, sales of routine diagnostic tests grew 6% in the quarter overall and even faster internationally, fueled by the continued global rollout of our Alinity instrument for immunoassay, clinical chemistry, and molecular testing,” he noted. 

Some of the company’s declined earnings stemmed from the temporary closure of an Abbott infant formula factory earlier this year. The FDA investigated the facility over concerns of contamination, which led in part to a shortage in the U.S. 

PerkinElmer-logo

PERKINELMER: Diagnostics Revenue Down 39%, Company Split Coming 

PerkinElmer in Waltham, Mass., reported results for its Q3: 

  • Company revenue dropped 17% to $712 million. 
  • Diagnostics revenue fell 39% to $399 million. 

During a presentation to investors, company leaders said the drop off in diagnostics revenue was due to COVID- 19 testing decline as well as lockdowns in China. 

Meanwhile, the company is in the midst of selling its applied markets, food, and enterprise services businesses to private equity firm New Mountain Capital, for $2.45 billion. The move will allow PerkinElmer to focus on its diagnostics and life sciences divisions, which will operate under a new, to-be-announced company name. 

“The energy and excitement among our employees in all our businesses remains exceptional as we continue to prepare for the upcoming split into two separate companies,” said company President and CEO Prahlad Singh. 

Bio-Rad-logo

BIO-RAD LABORATORIES: Faces Supply Chain Hurdles, Alludes to Possible Merger 

Bio-Rad Laboratories, in Hercules, Calif., reported Q3 financial results: 

  • Sales were down 8.9% to $680.8 million. 
  • COVID-19 related revenue was $17 million compared to $57 million in the same period last year. 
  • Clinical diagnostics segment sales fell 2.8% to $361.9 million (when excluding impact of decreased COVID-19-related sales, sales increased 3.7%). 
  • Life sciences segment revenue was down 14.9% to $317.9 million (excluding COVID-19-related sales and legal settlements, revenue increased 9.4%). 

During an earnings call, Chief Operating Officer Andrew Last described the effect of supply chain disruptions on instrument placements. 

“Improvement in product supply in the quarter was slower to materialize than we expected, which negatively impacted sales across several product lines, and we continue to carry a significant order backlog,” he said. 

CEO Norman Schwartz addressed the Wall Street Journal’s previous reporting that Bio-Rad was in potential merger discussions with molecular testing firm Qiagen. (See TDR, “Reports Say Qiagen and Bio-Rad Discussing Potential IVD Merger,” Oct. 31, 2022.) 

Schwartz noted that over the last few years Bio-Rad Laboratories has made “smaller acquisitions which have contributed to about one-third of our growth … and we now feel we could acquire and absorb a larger and more transformational opportunity if it met our strategic and financial metrics.” 

Siemens-logo

SIEMENS HEALTHINEERS: Diagnostics Faces Significant Cost Cutting by 2025 

Siemens Healthineers in Erlangen, Germany, shared results for its Q4 ending Sept. 30: 

  • Overall revenue increased 6.8% to €6 billion (US $6.02 billion). 
  • Diagnostics revenue increased 5.8% to €1.44 billion (US $1.49 billion). 

During a presentation, CEO Bernd Montag, PhD, said the company “had a strong finish in a more than challenging year.” 

He explained diagnostic growth was driven by rapid COVID-19 antigen sales, which were €232 million (US $235 million) in Q4, compared to €160 million (US $162 million) in Q4 2021. 

However, the COVID-19 test revenues overcompensated for higher logistics and supply chain costs. Those factors, among others, have resulted in Siemens taking next steps to cut €300 million (US $309 million) in costs through 2025. 

Biomerieux-logo

BIOMÉRIEUX: Sales Down 5%, Microbiology Shows Life 

bioMérieux, in Marcy-I’Étoile, France, released these Q3 numbers: 

  • Total sales of €902 million (US $915 million) fell 5.3%. 
  • Clinical applications (about 84% of sales) decreased 7.4% to €763 million (US $774 million). 
  • Molecular biology sales decreased 11.8% to €333.5 million (US $338.4 million). 
  • Microbiology sales increased 8.8% to €311.8 million (US $316.5 million). 
  • Immunoassays sales were down 20.2% to €101.4 million (US $102.9 million). 

There was less demand for COVID-19 tests, but also a rebound of core services. 

Hologic-logo

HOLOGIC: Diagnostics Revenue Down 35% Due to Less COVID-19 Testing

Hologic in Marlborough, Mass., reported on results for its Q4 ending Sept. 24: 

  • Revenue decreased 25.6% to $953.3 million due to lower COVID-19 assay sales and supply chain challenges. 
  • Diagnostics revenue was down 35.6% to $520.9 million (without comparison to Q4 2021 COVID-19 assay revenue, diagnostics revenue was up 11% in Q4.) 
  • Molecular diagnostics revenue, within diagnostics, declined 41.3% (excluding COVID-19 revenue, it grew 17.2%). 

The company emphasized that comparing Q4 2022 against Q4 2021 is misleading because the prior year saw the Delta variant heavily increasing demand for SARS-CoV-2 testing. 

CEO Stephen MacMillan noted that consumers want to know more about diseases that infect them, which will benefit IVD companies in the long run. MacMillan cited respiratory syncytial virus (RSV) as an example. 

“I’d argue that 99.9% of the public had never heard of RSV [before this fall],” he said. “We’re getting into these levels of granularity that people want to know more about what [infections] they have, and we think that will be a positive.” 

The company is also pinning hopes on continued expanded use of its Panther automated assay system. The company has 3,250 Panthers operating globally, up from about 1,700 at the end of fiscal 2019. 

Sysmex-logo

SYSMEX CORPORATION: American Testing Demand Has Resurgence 

Sysmex in Hyōgo, Japan, reported financial results for six months ending Sept. 30 of its 2023 fiscal year: 

  • Sales were up 15% to ¥194 billion yen (US $1.3 billion). 
  • Sales in the Americas increased 37.6%. 

Sysmex saw a resurgence in testing demand in the Americas and increased sales of instruments, reagents, and maintenance in hematology and urinalysis. 

Quidel-Ortho-logo

QUIDELORTHO: Focus on Integration of Two Companies 

QuidelOrtho in San Diego, named for the consolidation earlier this year of Ortho Clinical Diagnostics and Quidel, reported: 

  • Combined Q3 revenue went up 54% to $783.8 million due to the merger. 
  • Point-of-care and donor screening product lines drove revenue growth. 

The company said instrument revenue was negatively affected by global supply chain challenges and that “labs softness was due to continued challenges in China and instrument supply chains.” 

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