Bio-Rad Laboratories Annual Report 2000

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FY2000 Annual Report · Bio-Rad Laboratories

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t o o u r S H A R E H O L D E R S

T H E

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2 0 0 0 marked an extraordinary beginning to the Twenty-first Century at Bio-Rad

BSE (Mad Cow) test in 2001. The Clinical Diagnostics Group experienced its strongest year ever with

Laboratories. We broke the $700 million mark, with revenues up more than 30 percent from last year, we

increased sales in diabetes monitoring, quality control management, and autoimmune technology. The group is

experienced record sales of new products, and celebrated a 40 percent gain in the value of our stock.

also beginning to see promising gains in the areas of genomics, near-patient testing and bioinformatics.

Additional accomplishments included the sale of the company’s Semiconductor

Measurements Division and the sale of our facility in Cambridge Massachusetts. We

strengthened our core businesses by refocusing attention on research and development

in the life science market, and by successfully completing the integration of Pasteur

Sanofi Diagnostics (PSD), a restructuring initiative that more than doubled the

profitability of the former PSD business. We expanded our global markets, adding

new subsidiaries in Eastern Europe, Mexico, Brazil, and Africa, and now rank among

The year 2001 will bring with it a new era of growth and leadership as founders and longtime executives

are succeeded by a new generation of management. First, Bio-Rad Laboratories will say farewell to Vice

President Burt Zabin who is retiring after serving the company for more than 30 years, more than half that

time as Group Manager of the Life Science Division. Additionally, the two of us are beginning our own

personal succession plans as we contemplate a change of roles during the next year or so.

We invite you to join us in welcoming the next generation of leaders into Bio-Rad’s highest ranks. They will

David Schwartz and James J. Bennett

the top five life science companies and top ten clinical diagnostics companies in the

continue to carry on the company’s long tradition of innovation, customer service, and scientific excellence, and

world. This dynamic year has strengthened Bio-Rad’s position at the center of scientific discovery, and has

we are confident that their contributions will generate increased profitability and further global expansion

also set the stage for advancement and growth within the company and the industries it serves.

for Bio-Rad Laboratories.

In 2000, the Life Science Group experienced more than a 13% gain in revenues due to the excellent

performance of their laboratory and imaging products, and new products for use in the burgeoning areas of

DNA amplification and proteomics. The group will also see an increase in the distribution of its PLATELIATM

David Schwartz
President

James J. Bennett
Chief Operating Officer

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m a r k e t P O S I T I O N I N G

Bio-Rad Laboratories has remained at the center of scientific

Throughout the past four decades, the company’s product

discovery for more than 40 years by providing a broad range

portfolio has increased substantially, as has its expanding

of innovative tools and services to the clinical diagnostics

customer base and global reach. Bio-Rad now manufactures

and life science research markets. The company is world

and distributes thousands of products that incorporate

renowned among hospitals, universities, major research

a wide range of technologies including electrophoresis,

institutions, biotechnology and pharmaceutical firms for its

imaging, immunoassay, chromatography, microbiology,

commitment to quality and customer service. It has built

bioinformatics, and transfection. By capitalizing on its

strong customer relationships that advance research and

expertise and quality reputation, Bio-Rad Laboratories will

development efforts and support the commercialization of

continue to strengthen its leading roles in both existing

new technology, especially in the high-growth fields of

and niche markets, and maintain its position at the center

genomics, proteomics, biopharmaceutical discovery, food

of scientific discovery.

safety and biotechnology education.

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Life science is the study of the characteristics, behavior, and structure of living

organisms and their component systems. Bio-Rad is positioned at the center

of discovery in life science, drug development and biotechnology, and provides

research laboratories with tools critical to the scientific discovery process.

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Bio-Rad Laboratories is one of the leading providers of tools

biotechnology research, and in the pharmaceutical industry.

for the life science market, and maintains a solid reputation

In 2000, the Life Science Group achieved $270 million in

for quality and innovation. It ranks among the top life

sales, representing a growth rate of more than 13 percent.

science companies worldwide, providing a broad range of

This increase was driven primarily by the introduction of

products for research in molecular biology, biochemistry,

new products for use in the areas of DNA amplification

microbiology, genetics, immunology, and chemistry. The

and proteomics, two fields in which Bio-Rad remains at

group serves a growing base of customers in academic and

the center of discovery.

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The state-of-the-art iCycler iQTM instrument is used for “real time”

PCR (Polymerase Chain Reaction) detection, a powerful molecular

biology technique used for creating millions of copies of relevant

DNA and providing quantitative information about that DNA.

This product is distinctive in its simplicity, speed and reliability, and

has redefined the standard for laboratory devices, opening up a

wealth of opportunity for life science research.

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270

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214

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37%

The Bio-PlexTM protein array system is a

revolutionary new product line. It will allow

researchers to extract more data from smaller

samples, and can significantly decrease the amount

of time it takes to assess the effectiveness of

therapeutic candidates in the drug discovery process.

Bio-Rad invests in science education.

The company’s Biotechnology ExplorerTM

program provides high schools and colleges

with a whole new generation of inquiry-

based biotechnology curriculum supported

by classroom kits, lab equipment and

supplies. These teaching tools complement

existing biology and integrated science

course work, and give students direct

classroom experience with the latest in

laboratory technology designed for real

life, problem-centered applications.

Bio-Rad’s highly accurate screening test for BSE,

or Mad Cow Disease, has been used extensively

throughout Europe to protect the food supply. The

company began delivering tests during the fourth

quarter of 2000, and is well positioned to meet a

significant demand in 2001. The test detects the

presence of an abnormal form of protein or “prion”

using monoclonal antibodies in an ELISA format.

The year 2000 was one of continued growth for Life

These innovative technologies place Bio-Rad’s Life Science

Science products. Strong demand, driven by growing

Group at the center of the proteomics revolution, a market

markets and a record number of new product introductions

that has only begun to show its potential – especially in the

combined to help fuel growth. Late in the year, the group

areas of disease and drug discovery. The future focus will

introduced a BSE (Bovine Spongiform Encephalopathy)

be on functional genomics, the study of the function of genes

test which has quickly gained strong acceptance in Europe,

and proteins and how they effect biological processes.

helping to ensure the safety of the food supply.

Bio-Rad’s Life Science Group will continue its lead as an

The coming year will be highlighted primarily by the demand

for the company’s proteomics products, which are designed

to meet the needs of a new breed of protein researchers.

innovator, providing the tools necessary to bridge the gap

between the genomic sequence and the cellular functions

that drive all aspects of life.

In a global alliance, Bio-Rad and Micromass Ltd.

have developed the ProteomeWorksTM system, a

completely integrated system for protein discovery

and proteomics analysis. It combines 2-D electro-

phoresis with high-throughput tools for image

analysis, automated protein excision and digestion,

mass spectrometry analysis, and bioinformatics.

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The Clinical Diagnostics Group manufactures, sells and supports an array

of products used for medical screening and diagnosis. The group specializes

in quality control systems, blood virus testing, toxicology, in vitro and genetic

disorders testing, specialty chemistry, molecular pathology, and internet-based

software. It is recognized worldwide as the “gold standard” in diabetes monitoring,

broad-spectrum drug screening, and hospital epidemiology.

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Bio-Rad’s Clinical Diagnostics Group entered the millennium

The year 2000 was one of significant accomplishments.

a more powerful competitive force, and has expanded its

Bio-Rad successfully integrated the former Pasteur Sanofi

resources for a decided advantage in the healthcare market.

Diagnostics (PSD) operations centered in France into

Today, the company maintains leadership positions in blood

vertically-integrated businesses focusing on sales and

virus testing, autoimmune disorders, diabetes monitoring, and

profitability in the blood virus and clinical microbiology

quality control management. It also provides the clinical

markets. Sanofi’s sales organization was also integrated

laboratory with a broad range of additional products and

into Bio-Rad’s worldwide subsidiary structure, thereby

services, along with an assortment of innovative “generation-

expanding overall distribution resources and eliminating

next” technologies. Bio-Rad is well positioned in the clinical

organizational redundancy. These initiatives more than

diagnostics market, and is poised for sustainable and profitable

doubled the profitability of the PSD business.

growth throughout the coming years.

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The fully automated VariantTM II system

is used for diabetes monitoring. It surpassed

1000 customer placements less than two years

after introduction, making it the most successful

system introduction in the group’s history.

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The synergies created by the integration of PSD resulted in

eliminates costly labor hours. This innovation was made

a more diversified product portfolio, increased research

possible through the use of the two new UNITY Plus™

and development capability, and enhanced global reach.

and UNITY Pro™ software products.

These expanded capabilities, in combination with Bio-Rad’s

broad laboratory experience, position the company to take

advantage of the growing market sectors within the In Vitro

Diagnostics industry.

The group’s leading markets of diabetes monitoring, quality

control management (QC), and autoimmune diagnostics

technology also experienced growth. The group maintained

its lead in clinical laboratory QC management innovation,

for example, with the introduction of the Hands-Free QC™

system, a connectivity-based solution that integrates

the laboratory’s information system with Bio-Rad’s data

management services – an approach that completely

automates QC data input, transmission, and analysis, and

Through acquisition and organic growth, the group achieved

a sales increase of 62% compared to 1999, with segment

profit up 35% over the prior year.

The year 2000 saw expanded use of new technology for

Bio-Rad’s diagnostics operations in the areas of genomics,

near-patient testing, parallel processing and Internet

technologies.

In the area of genomics, the company was awarded a patent

on novel proprietary DNA amplification technology,

“Linked Linear Amplification.” With this enabling tech-

nology, Bio-Rad is in a position to integrate DNA sample

preparation, amplification, and detection with its existing

portfolio of molecular diagnostic assays.

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56%

Bio-Rad also launched the first DNA-based kit in the U.S.

for detecting gene mutations related to one of the most

common genetic disorders, hereditary hemochromatosis, a

condition resulting in the excessive accumulation of iron

in the body. Bio-Rad’s patented technology enables the

detection of the genetic trait for this disorder carried by

nearly 32 million people nationwide.

Today, advanced technology for high-throughput screening

is used for accelerated drug discovery, and will be used for

clinical diagnostic testing. Bio-Rad’s most recent strategic

partnership with Luminex Corporation for the commercial-

ization of the LabMAP™ multiplexing technology will address

both research and healthcare applications. The company’s

investment in this and other leading-edge technology will

shape the future of the clinical diagnostics market, and place

Bio-Rad at the center of innovation.

Bio-Rad is a worldwide leader in the detection of HIV.

The new GENSCREEN® PLUS HIV AG-AB test was

introduced to the overseas market in 2000. Clinical

laboratories and blood screening centers use the test to

detect HIV antigens and antibodies simultaneously.

In early 2000 Bio-Rad

introduced the first Internet-

based information access

system of its kind to the

clinical laboratory, the

Clinical Systems NetworkTM

(CSNTM), which speeds up

the release of diagnostic

test results to physicians,

and dramatically improves

communication among

clinical laboratories.

Bio-Rad responded to the increased demand for point-of-care tests with

two new products for diabetes monitoring, the MICROMAT ™ II HbA1c

system, for use in physician’s office labs, and the TOX/See™ multi-drug

screen panel, a rapid test platform for drug abuse testing. In the fall, the

MICROMAT ™ II was selected for use in the Action to Control Cardiovascular

Risk in Diabetes trial (ACCORD). The National Heart, Lung and Blood

Institute (a division of the National Institute of Health) sponsors ACCORD.

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