IVD Sector Update

Biggest IVD Manufacturers Report Robust Third Quarter Earnings

Growth in core lab testing is modest compared to the molecular, genetic, and tissue segments

In a time of shrinking lab budgets and falling prices for lab tests in the United States, how are the larger in vitro diagnostic (IVD) manufacturers doing? A look at third-quarter financial reports provides useful insights as to which segments within the IVD industry are doing better than others.

In alphabetical order, here’s a quick snapshot of the third-quarter earnings of several of the major IVD companies.

Abbott Laboratories

Abbott Laboratories announced Q3-2018 earnings on Oct. 17. Its diagnostics business posted revenue of $1.8 billion, which was an increase of 7.5% over revenue of $1.3 billion in the same quarter the previous year. During third quarter, these diagnostics segments grew as follows: core laboratory sales up by 6% to $1.19 billion; molecular sales up by 5% to $121 million; and point-of-care sales up by 4% to $136 million.

Danaher Corporation

Danaher Corporation has acquired a string of IVD companies in recent years and now is one of the major players in diagnostics. In its Q3-2018 earnings report issued on Oct. 17, it said that core diagnostics revenue grew by 3.5%, to $1.5 billion.

Among the divisions, revenue at Beckman Coulter grew “in the low single digits,” Radiometer and Leica Biosystems were both up in “high-single digits,” and Cepheid “delivered double-digit core revenue growth.”

Roche Diagnostics

On Oct. 17, Roche Holding AG reported that, during Q3-2018, revenue at Roche Diagnostics grew 6% over Q3-2017, to US$3.1 billion, compared to US$3.0 bil- lion in Q3-2017. Company officials said that business revenues at the centralized and point-of-care solutions grew by 8%; molecular diagnostics increased by 6%; and, tissue diagnostics went up by 9%.

Siemens Healthineers AG

Earlier this year, Siemens AG spun off its imaging and diagnostics businesses into a new company called Siemens Healthineers AG. The company’s initial public offering raised $5.2 billion on March 15.

Siemens Healthineers is scheduled to report its third-quarter 2018 earnings on Nov. 5. In its second-quarter 2018 earnings, it said that diagnostics revenue for that period was $1.2 billion. This was a decline of 4% from the $1.05 billion revenue total for the same quarter in 2017.

It is no surprise that core lab revenue at these companies is in the low single digits. These tests are mostly automated and run at high-volumes. Growth rates are much stronger in point-of-care, molecular, and genetic testing segments, due to expansion of precision medicine services.

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