Agilent Technologies Inc. (A - Analyst Report) has won the patent for comparative genomic hybridization (CGH) methods in the U.S.
CGH methods facilitate the basic and clinical study of genetics and cancer. Being a method of studying genes, it can also help to detect other diseases like developmental delays, mental retardation and autism in children.
The study of genes has gained popularity in medical research because many so-called incurable diseases appear to have their roots in unfavorable genetics. The most important aspect of genome testing is that it can detect disease in its early stages, thus facilitating better diagnosis.
The genetic testing market is, therefore, entering an exciting era where it can play a vital role in detecting diseases like cancer, cystic fibrosis and Alzheimer’s and many other life-threatening diseases.
Agilent has been increasing its focus in the medial diagnostics segment because of the significant growth potential in the area. The company recently acquired a Danish cancer diagnostics company, Dako, for $2.2 billion. Dako deals in antibodies, scientific instruments and software used mainly in cancer-related diagnostic labs. It also collaborates with drug companies for the development of methods to identify patients likely to benefit from certain therapies.
In the health care sector, major players such as Abbott Laboratories (ABT - Analyst Report), Genomic Health Inc. (GHDX - Analyst Report), Life Technologies Corporation (LIFE - Snapshot Report) and others have all increased focus on the genetic testing market.
Agilent’s revenue in the third quarter was flat sequentially and up 1.9% year over year, short of management’s expectations for a 2-3% sequential increase ($1.77 billion to $1.79 billion). The Chemical Analysis segment generated 22.0% of third quarter revenue, down 8.8% sequentially and 7.0% year over year. The sequential decline was largely because of weakness in food testing, although chemical/energy was also down significantly and the forensics/environmental was flat. All three markets fared similarly when compared with the year-ago quarter. The newly- added Diagnostics and Genomics segment accounted for 6% of revenue in this quarter.
Currently, Agilent Technologies Inc. has a Zacks Rank of #3, implying a short-term ‘Hold’ recommendation.