A 60-year service

When a group of MIT professors started to design products in a garage in the 1930s, they had no idea that they were laying the foundations for a global business.

60 years ago, three professors from the Massachusetts Institute of Technology (MIT) in the US started a joint business venture to study the mechanisms and applications of high-speed photographic and stroboscopic techniques. From humble academic beginnings, PerkinElmer has now risen to become a global leader in health sciences and photonics, offering everything from genetic screening solutions to digital imaging instruments.

Harold Edgerton, Kenneth Germeshausen and Herbert Grier incorporated their company, EG&G, in 1947, 16 years after Edgerton and Germeshausen first started to design and build instruments in a Boston garage. PerkinElmer was finally established in 1999 when EG&G acquired the analytical instruments section of an optics design and consulting business founded by avid astronomers, Richard Perkin and Charles Elmer.  

Today, PerkinElmer employs about 8500 people around the globe and supplies scientific instruments, consumables and services to testing laboratories in over 125 countries. Its customers cover a range of disciplines including pharmaceuticals, environmental testing, forensics, academia, food and beverages, semiconductors and biofuels. Over the years, it has become synonymous with the development of precision instrumentation and now aims to expand on this to pioneer complete solutions in predictive diagnostics, personal medicine and environmental monitoring. 

Life begins at 60 

To coincide with its 60th anniversary, PerkinElmer opened a new corporate headquarters and technology centre in Waltham, Massachusetts in spring of this year. The centre houses a research and development facility for the advancement of the company’s drug discovery, cellular science and diagnostics businesses. 

’Things are going well,’ says Robert Friel, recently appointed president and chief operating officer of PerkinElmer. ’We have good momentum and we’re seeing some strong growth.’ 

The services and products that are designed, manufactured and marketed by PerkinElmer fall within one of two areas: life and analytical sciences or optoelectronics. The former generated over $1.1 billion (?550 million) in revenue in 2006 - equivalent to 74 per cent of total sales for the fiscal year. Optoelectronics generated about $402 million for the year.  

PerkinElmer’s total revenue for 2006, over $1.5 billion, represents growth of about 5 per cent over 2005 sales. In addition, the company reported a 13 per cent growth in revenue in the first quarter of 2007 and, in the second quarter, saw a 17 per cent increase in revenue compared to the same period in 2006. The firm attributes this growth to a broadening of theproducts and services it offers.  

’If you look at the three year outlook for us, we see it as a revenue growth of around 10 per cent a year made up of about 5 per cent to 7 per cent in the organic range and the rest being contributed through acquisitions,’ said Gregory Summe, chief executive officer and president of the company, at Deutsche Bank’s 32nd annual healthcare conference in Washington DC in early May. 

Finding a solution 

PerkinElmer is always on the look-out for possible acquisitions that will complement its existing product lines and provide a complete package for customers’ research and analysis endeavors. ’Technologies exist but they have to be translated to the applications,’ explains Daniel Marshak, vice-president and chief scientific officer of the company. ’I think PerkinElmer is very good at taking very high-level technologies that already exist and pulling them together into innovative systems and applications that allow the end-users, our customers, to fully realise the enormous untapped potential of those technologies.’ 

For instance, to build a world-leading franchise in cellular analysis, the firm has invested in three companies over the last eight months - gaining what a biomedical researcher might consider to be an ideal cellular analysis portfolio consisting of instruments, reagents, and analysis software.  

In January 2007, PerkinElmer bought Evotec Technologies - a German company known for its high-content screening instruments used to analyse the functions and interactions of cells. Such instruments are an increasingly essential tool for drug discovery. In that same month, PerkinElmer also acquired Euroscreen Products, the Belgium-based developer of a sensitive cellular screening platform based on luminescence technology. Finally, PerkinElmer snapped up UK-based Improvision in April of this year, a leader in live-cell imaging software with three- and four-dimensional image analysis capabilities. 

’As we think about going into an area, we want to make sure we’re providing a total solution, not just individual products,’ says Friel. ’By acquiring those three companies, we can offer proven, leading edge technologies in detection, reagents and software capabilities.’ 

The scientists that PerkinElmer supplies certainly seem to value this comprehensive approach. Following the relatively recent acquisitions that led to the expansion of its product portfolio in the area of advanced cellular sciences, the company took top honors in the 2007 Life Science Industry Awards for high-throughput screening. The winners of these awards, sponsored by The Scientist  magazine, are selected on the basis of an independent survey of over 3000 scientists from around the world. 

Digital revolution 

Another growing area is the firm’s genetic screening business, which specialises in analytical tools to test for inherited disorders in newborns and to assess risk during pregnancy. PerkinElmer recently expanded this business to include tools for prenatal screening with the acquisition of NTD Laboratories, the owner of a leading prenatal marker for chromosomal defects. Just months after this acquisition was announced, the American College of Obstetrics and Gynecologists issued a new recommendation that all pregnant women - not just those over 35 years of age - be offered first trimester screening for disorders, specifically Down’s syndrome. 

’I think there’s a recognition that the testing is simple, easy to do, doesn’t do any harm, is inexpensive, and therefore brings important information relative to the pregnancy,’ Summe explained to the Deutsche Bank conference delegates. 

On the optoelectronics side of diagnostics, PerkinElmer holds about 25 per cent of the estimated $400 million market in digital x-ray detection. It is a leading supplier of amorphous silicon digital x-ray detectors, which improve the resolution of images for radiography, cardiology, angiography and cancer treatments - replacing traditional film and allowing x-rays to be viewed immediately. 

’The analogy is what’s happening with the camera as people are going from film to digital. Exactly the same transition is occurring in x-rays. They’re going from film x-rays to digital x-rays and we provide the flat-panels for analysis that allow that to happen,’ says Friel. 

Environmental awareness 

But there are even more markets PerkinElmer could tap into, according to Friel. The company will continue to stay competitive in the cellular sciences, neonatal and prenatal genetic screening, and digital x-ray technologies, while at the same time developing environmental monitoring and energy usage. 

’We’re going to focus this business more and more on specific applications,’ says Friel. ’We’ll go into areas like material characterisation. Air, water and food quality will be a key area for us.  

The other area of interest is energy usage,’ he continues. ’This includes analysis and detection of impurities in biofuels such as biodiesel and used oil. Those analyses require some additional competencies and technologies, which we are aggressively supporting.’ 

Summe sees growing environmental awareness and the resulting pressure on the industry as an opportunity. It is also an important area for the company as it moves to expand internationally. The exploding health sciences and environmental monitoring markets in developing countries such as India and China promise the possibility of huge growth for technology companies. To capitalise on this, PerkinElmer recently established a wholly-owned subsidiary of the company in India and invested in a technical centre in China.  

’We’re putting a big emphasis on investing in developing areas of the world because we think they’re going to have disproportionately higher growth,’ says Friel. 

Besides expanding technologically and geographically, PerkinElmer will continue to build on the company’s service offerings. ’We probably have one of the best service capabilities in the industry,’ says Friel. ’We have about 1200 service engineers around the globe, which gives us a great capability not only to service our own products but to service our competitors’ products as well.’ The company started its service offerings as a separate company a couple of years ago. ’It’s been a successful aspect of our business. We’re getting good traction now, particularly in the pharmaceutical industry, and we’re starting to branch out more into areas like food and consumer products,’ says Friel. 

For now, the company plans to stick with the growth strategy it has followed for the last 12 to 18 months - to acquire product and technology lines that meld with its businesses and continue to expand its capabilities. ’We have a very strong cash flow, a strong financial position, so we will continue to be able to invest in the company from an R&D perspective as well as make acquisitions,’ says Friel. ’It’s an exciting time.’ 

Jessica Ebert is a freelance science writer based in Minnesota, US