Bio•IT World: PerkinElmer has made a number of interesting acquisitions lately. Why all the recent activity?
Dan Marshak: We’ve been doing a lot of acquisitions and divestitures for the last 10 years. We divested our fluid sciences business in 2006, and then last year the Illumination and Detection Systems (IDS) business, which was quite different than many of our other business-to-business health science-related products.
We were able to take that cash and reinvest it in a number of different areas. We’ve decided to focus on human health and environmental health. Our legacy business in analytical chemistry is now focused on specific end markets, particularly in environmental laboratories and environmental testing—industries that need to have strong analytical chemistry to preserve the environment. We also are the leader in inorganic analysis—heavy metal analysis in water samples. We’ve been very active in food testing as well. Environmental health is about half our business, including instruments, reagents and software.
About 25% of our business is in services—instrument repair or maintenance services, or validating for FDA purposes. Typically a scientist isn’t qualified to strip [an instrument] down, move it to another building or continent and reassemble it, get it tested and working and revalidate it.
Your most recent acquisition is Caliper Life Sciences. What is the rationale for buying Caliper and how will it complement the existing technology portfolio?
Caliper Life Science’s focus on next-gen sequencing workflow is an ideal fit with PerkinElmer’s NGS service as well as our Geospiza software. The LabChip is essential to ensuring the quality of the samples prior to sequencing. The combined offering will supply unmatched value in providing high-quality samples to the rapid speed required by sequencers as well as the informatics needed to analyze the massive amounts of data generated. The LabChip also allows the separation and purification of small quantities of biological contaminants within food and water testing…
Caliper’s differentiated platforms for animal and tissue imaging will enable PerkinElmer to offer scientists in translational medicine the ability to understand at molecular, cellular, tissue and animal levels what a biomarker or drug target is doing. We are very excited about being able to offer our fluorescent biomarkers to Caliper’s IVIs customers. By combining Caliper’s and PerkinElmer’s expertise, researchers will be able to multiplex fluorescent and bioluminescent in the same experiment as well as at different times in the same animal to better understand disease mechanisms.
Where is your focus in the human health side of the business?
About two-thirds of that is diagnostics, one third is in the research products area, which supports both the pharmaceutical and biotech industries as well as academics funneling new discoveries into drug discovery.
In diagnostics, we manufacture some of the world’s fastest, highest contrast digital X-ray detectors. We’re one of the leaders in amorphous silica flat panel X-ray detectors, sold for medical purposes to GE. In oncology, we make very fast detectors that are used in therapeutic oncology devices… We recently acquired Dexela, a UK company that does CMOS X-ray detection. So we do both CMOS and our classic amorphous silica X-ray detectors in diagnostics.
The central part of our diagnostics business is around pregnancy and birth—newborn screening, cord blood banking, prenatal/maternal health. We’re a leader in prenatal testing for Down’s syndrome and other disorders. Probably 80% of all the newborn Guthrie heel-stick blood spot cards are done through PerkinElmer systems. We recently acquired a company that produces these filter cards, all the way to the puncher and the instruments to do multiple testing of different types of analytes. Some of our most advanced areas are in the software for doing statistical analysis of the data. It’s easy to measure something and produce a number. What’s difficult is to know whether that number is significant, so a physician can say whether a child has a disorder or needs further testing.
On the DNA side, we acquired Signature Genomics, which has proprietary content on Roche NimbleGen array kits. They do a service of prenatal and newborn arrays for further diagnosis of genetic disorders. They have a database they provide through unique software for genetic disorders called Genoglyphics. This year, we launched the first foray into using those chips in oncology for hematological malignancies, called Oncoglyphics…
We’ve expanded our diagnostics through acquisition of SYM-BIO Life Sciences two years ago in China. SYM-BIO is a leader in the high sensitivity test for hepatitis, HIV, and some STDs. There are 100 million carriers of Hep-B in China. We’ve been able to fill that niche and we’re expanding that business significantly.
What is the over-arching goal or strategy to these acquisitions?
Up to the 1970s, PerkinElmer was the leader in introducing new instruments—we introduced the first infrared spectrometer, the first GC mass spec, a lot of firsts in analytical chemistry. In those days, the learning curve, the technology curve was very much in the hardware. The field has matured in the last 30 years and a lot of companies have entered the field. Ours is still outstanding technology, but the differentiator for the customer is not as much in the box as in other parts.
Also, the users have changed... [Customers] need help on sample preparation and getting it to the instrument; on the other side, it’s about understanding the data coming out, turning that data into information and then using other resources to turn the information into knowledge. They want the complete solution from one vendor: so samples, instrument, reagents, consumables, and the software, and the analysis, and training and service support from one source. We’re trying to provide that.
So it’s about providing a more holistic data to knowledge solution?
Moving from data acquisition to knowledge is not trivial and it’s not simply laboratory information management. It’s really using the new tools of the Web 3.0 and cloud-based tools to understand what else is out there to collaborate or interact within or outside the facility.
Some of the software no longer needs to be tied to the instrument. It’s really software-as-a-service in some cases—software that enables the customer to take their information and turn it into solutions.
Some years ago, we bought Evotec Technologies, which had cell-based screening for high content screening. The accompanying software actually runs on its own—it’s very useful for sample analysis and image analysis either from our instrument or from open sources, and in general for analyzing cellular imaging. Our high-end instrument is called Opera, and there’s a lower-end instrument called Operetta.
The software (with a graphical user interface) is called Harmony, but the central software that’s used for analyzing the data and moving to a knowledge-based architecture is called Acapella—because it is without an instrument! We’ve now launched Acapella on our Columbus Conductor Workstation, which allows you to analyze image files and understand what is going on to build models…
CambridgeSoft is the leader in electronic lab notebooks, enterprise wide but also for the individual researcher. They also have ChemDraw and other applications on that platform… There are tools linked to instruments but there are also tools that scientists will use independently and then these systems like electronic lab notebooks (ELNs) or workstations that pull data together and allow knowledge creation. That goes along with Signature Genomics and the Genoglyphics and Oncoglyphics software. Whether we do the service, use our array chips or our Luminex system, or clinical sequencing, we’re still developing an information and knowledge solution for the customer using the software.
How will this help researchers down the road?
We’d like the researcher of the future to be able to sit at a terminal or on an iPad and access all these things, and understand better what (s)he needs to do next, to call on service support or collaborators as needed, to reorder reagents and consumables as needed, to reserve data for FDA purposes and make sure things stay in the right place. It’s more than laboratory information management—it is knowledge creation and solving problems for customers.
There are some very highly data intensive systems now. Mass spectrometry, imaging and DNA sequencing generate very large bodies of data. So you do the experiment quickly and then you spend your time analyzing. This has happened in physics, too. There is the ability to analyze that data more quickly in very large data sets. We have customers with petabyte storage devices because they have so much data. Even our Conductor workstation is sold with 24 terabyte storage. So being able to manipulate large data sets, and share them with your collaborators in Europe or China, maintaining security, and to manipulate the information to garner the desired results, is very important.
What does the acquisition of Geospiza say about your interest in next-gen sequencing?
Our DNA strategy is still a work in progress. I mentioned Signature Genomics for array analysis and Luminex as a platform to develop bead-based assays. This year we acquired Chemagen Biopolymer Technologies in Germany, which is a magnetic bead-based nucleic acids purification system, and competes with the likes of Qiagen on methods for isolating DNA.
Downstream, the Geospiza deal was terrific for us because they had some of the best technology for DNA sequence analysis and managing sequence information. We’ve set up a DNA sequencing service. Our goal was not to enter the field of DNA sequencing technology per se. We’re providing sequencing services at a very high level of automation, accuracy, service and security, as well as the Geospiza software for analysis. There are still some gaps from sample acquisition and processing all the way down through analysis of the results. We hope to fill those gaps and have a more complete DNA strategy, both in the service and product offering.
Why did you decide to get into the sequencing service business?
We heard from a lot of customers that there was a demand, both in pharma and in academia. One of the leading providers of these services is BGI in China, but we heard a lot of interest in finding a domestic supplier of high quality services, and we thought there was an opportunity for us to enter this market.
We typically use Illumina instruments, but we are methodology agnostic and will go where the field needs in terms of technology. We want to provide—from sample to knowledge—that complete continuum to the customer to try and solve their problems, and allow them to back away from having to be experts in every technology.
Dick Begley, previously the president of 454 and at Agilent before that, is running the business. We’re trying to provide very high quality service, very good data capabilities, but we’re starting slowly. Rome wasn’t built in a day and neither is our DNA sequencing.
Are you planning more acquisitions?
Well, a) you’re never done and, b) we still have plenty of money and debt capacity to do more investment. So no, we’re not done! We’re still very interested in acquisitions of significant size that may be somewhat transformational but we continue to consider ‘bolt-ons’ for the existing businesses.
Some of the areas of overlap between human health and environmental health include things like pathogen detection, not only for infectious disease but also in food and water. So you can see where technology is sort of agnostic to what you use it for, and we could use nucleic acid testing technology as well as immunoassay, imaging and other things to help us cross that frontier. •
This article also appeared in the November-December 2011 issue of Bio-IT World magazine. Subscribe today!