The Acquity QDa forms part of Waters’ product line for chromatography - often used as part of the downstream purification process in biomanufacturing - and, according to the firm, brings mass spectrometry to the benchtop chromatographer.
Speaking at this week’s J.P. Morgan Healthcare Conference in San Francisco, CEO Douglas Berthiaume, said traditionally benchtop chromatographers used UV absorption to do most of the activity as mass spectrometry was inconvenient due to its size, and therefore this technology has the “opportunity to change the game.”
His optimism continued due to the demand for the product from from large biopharma since its launch in October. These companies have been struggling to find resources to deploy in this sector of late, he said, but the uptake for the Acquity QDa was much faster than Waters’ predicted.
the pharma industry accounts for 60% of the firm’s revenue and though demand has been disappointingly low over the last few quarters, ISI analyst Ross Muken said in a note the Acquity QDa “is a major advancement and should drive a new leg of growth.”
Struggling Pharma Demand
Furthermore, Berthiaume said the recent issues were coming from its large pharmaceutical clients and mostly related to decreased demand in small molecules services, though this was turning around.
Waters has “seen interest from large pharma accounts in the biologicals arena where more large pharma is investing in large molecules vs small molecules,” he said, adding there had also been increased demand from the emerging pharma sector and small biotechs.
Back on Track and not looking to buy
The firm saw about an 8% growth rate between 2002 and 2010, but this has dropped significantly in the last two years partially due to the sluggishness in the broad pharma industry worldwide. However, Berthiaume said he expects the firm to come out of this period as “there is pent up replacement demand” from large pharma.
Berthiaume also told stakeholders and potential investors Waters would not be following the M&A strategy other biopharma services companies have undertaken to strengthen growth.
“In these days of low interest rates a number of companies are aggressively investing to get a creed of growth but in the end still have to live with what they buy and have to grow off that expanded base,” he said.
“We believe the long-term benefits in the chromatography and mass spectrometry markets offer us the opportunities to continue to grow over at that high single-digit rate, and we are better off staying focused on that part of our marketplace rather than expanding to potentially lower growth opportunities outside of that.”