Client forum – Beckman Coulter Inc.

Beckman Coulter, Inc. is a leading provider of instrument systems and complementary products that simplify and automate laboratory processes. From general chemistry, haematology and immunoassay analyzers to integrated laboratory automation solutions, from centrifuges and blood analyzers to diagnostic rapid-test kits, the company's products are used throughout the world in all phases of the battle against disease. Annual sales for the company totaled $2.06 billion in 2002. Beckman Coulter has activities in 130 countries around the world. HBS consulting, which is currently working alongside Beckman Coulter, spoke with Marcel van Kasteel, European Marketing Director Commercial Operations based in Nyon Switzerland to discuss the focus of Beckman Coulter in the immunodiagnostics market. This has specifically led to the launch of the high throughput immunochemistry analyzer the UniCelÔ DxI 800 during the Euromedlab event this year and will be demonstrated at Medica in Dusseldorf in November 2003.

HBS Consulting: Can you give us an idea of the immunodiagnostics market in Europe and what kind of role Beckman Coulter Europe currently plays within this sector?

M Van Kasteel: 2002 surveys indicate that the total European immunoassay systems market is a $1.5 billion opportunity and growth within this market is running at about 3% per year. At this moment in time Beckman Coulter has a market share of 4% and holds a top 10 position.

HBS Consulting: The market size is a clear indication of the company’s interest in this area but are there other reasons why Beckman Coulter is investing heavily in the immunodiagnostics market ?

M van Kasteel: Growth is a key element - the oxygen - for the company’s success. As Beckman Coulter is already the world market leader in haematology and clinical laboratory automation and the second player in chemistry, we were naturally looking for new growth opportunities. The decision to enter the immunodiagnostics market was made by Beckman several years ago with the Hybritech acquisition followed by the Access product line from Sanofi Diagnostic Pasteur. The reason for this was that the immunodiagnostic market is a growing and profitable market where significant laboratory process improvements could be made. Our goal is to be a major player in this market and become a top 3 player by 2007.

HBS Consulting: What do you see as the key success factors for companies in this particular market?

M van Kasteel: To be a successful company you must offer a broad menu of tests to be able to reduce the number of instruments in the lab. Today, labs are still using two, three or even more different systems to run their tests. By reducing the number of instruments and standardizing technologies, you lower the service costs, reduce inventory and training costs and improve laboratory processes.

Another key factor is to offer a complete solution for small, medium and large hospitals. The reason behind this is that European hospital laboratories are consolidating. The hub-spoke-satellite laboratory network concept is becoming more established. It is a clear benefit to such networks to standardize reagents, user interfaces and instrument technologies. Beckman Coulter provides a family of immunoassay analyzers for all laboratory sizes with the same chemiluminescent technology, same menu, same reagents, same protocols and same results. The user interface is very powerful and is similar on all the systems, thus reducing the training requirements for laboratory technicians.

HBS Consulting: Why do you think Beckman Coulter will be successful in this market knowing you have a small market share in Europe?

M van Kasteel: It is of course a challenge to become a major player in the immunoassay market but we are convinced of the need to propose the right solutions to our customer base. First of all, our current customer relations and proven track record in the diagnostic market will give us the first push. We have demonstrated our capability to be very successful in focusing on improving our customer’s laboratory processes and this will be part of our strategy in immunodiagnostics as well. By using the same reagents for all our immunodiagnostic systems such as Access2 for small to medium size laboratories, SYNCHRON LXÒi 725 for medium size laboratories looking to consolidate general chemistry and immunoassay on one single platform, and the UniCel DxI 800 for large laboratories we have a unique differentiating advantage on the market.

We are contributing to significantly reducing training time and expenses and allowing technicians transversal moves in different labs by using a similar user interface. Last but not least, we facilitate ordering process and inventory management and contribute to reduce inventory costs by providing identical assay reagents for all platforms.

Another key reason for success is that we will not lose any time to develop platform specific reagents. All assays are indeed identical whatever the system they are run on i.e. Access2, SYNCHRON LXi 725 or UniCel DxI 800. To be specific, we have 47 tests available today on all our immunoassay platforms. There is no other example in the immunoassay industry of a new platform - such as UniCel DxI 800 - to be launched on the market with such a comprehensive menu.

We are committed to developing our menu further by about 20 new assays within the next two years and will maintain our aggressive development plans beyond that timeframe. Assay developments will be done internally and externally. Regarding our external co-operations, we have recently signed an agreement with Biosite to manufacture BNP (with the assay to be sold by Biosite on Beckman Coulter immunoassay systems) which is expected to become a $500 million market in the next five to seven years.

We have signed an agreement with R&D Systems to develop automated cytokine assays with a view to further address the unmet needs of diagnostic laboratories.

An agreement with Hycor is focused on the development of autoimmune tests for a very fast growing market where many laboratory process improvements can be made.

Finally, Beckman Coulter and Bio-Rad have entered an agreement to expand Infectious Disease and Blood Virus testing development. This dual development approach in combination with the 3 different platform solutions using the same technology and menu will enable us to become a major player in the immunodiagnostics market.