Waters boosts position in thermal analysis market with Calorimetry Sciences acquisition

MILFORD, Mass.—Ina bid to capitalize on the relatively small but growing thermal analysis marketin life sciences, Waters Corp. recently acquired Linden, Utah-based CalorimetrySciences Corp. (CSC), a manufacturer of high-performance calorimeters. Thebusiness, which boasts annual sales of approximately $4 million, will becomepart of Waters' TA Instruments Division, based in New Castle, Del. The transaction is expected to beneutral to Waters' 2007 earnings.

Waters holds strong market positions in three analyticaltechnologies—liquid chromatography, mass spectrometry and thermal analysis—allof which the company considers complementary. These markets combined accountfor approximately $5 billion of the estimated $20 billion to $25 billionanalytical instrumentation market. Thermal analysis itself is the smallestslice among those three technologies, and Gene Cassis, vice president ofinvestor relations for Waters, puts the value of thermal analysis at no morethan half a billion dollars.

"It's very much a technical niche within this broader markerand mostly thermal analysis is applied to industrial uses, so the wholeapplication to biological systems is a relatively new trend," Cassis says.

One of these trends Waters executives have noticed recentlyis the increasing role of biologics in pharmaceutical discovery anddevelopment, Cassis notes. Much of this activity involves protein-based drugsor proteins within living systems that are used as biomarkers. The technologyin microcalorimetry, he says, is useful in understanding the three-dimensionalshape of protein molecules, which have a large impact on their biologicalactivity.

"The folding or the nature and kinetics of the folding—thatis, the rate at which the shape changes over time—can be an important parameterin understanding a disease state or potential therapy, and microcalorimetry hasbeen an increasing tool in understanding such parameters," Cassis says.

Broadly, he adds, the CSC acquisition fits with Waters'long-term plans to find companies and technologies that complement its existinglineup and will help the company meet research goals to better identify anddefine disease states.

"More tactically, we are taking our TA Instruments businessand expanding its reach more into life sciences," Cassis says. "Looking at lastyear's results for TA, the vast majority of that business was for industrialchemical applications and not life sciences, but we think there is a fit forcalorimetry technology in life sciences; it just hasn't yet been exploited andwe would like to be an agent of that change."

"The technologies and products from CSC will complement ourrecently introduced TAM microcalorimeter product line and will furtherstrengthen TA Instruments' industry-leading position in thermal analysis," addsTerry Kelly, president of TA Instruments, "while increasing our exposure to thegrowing adoption of microcalorimetry in life science research."

Key products developed and offered by CSC include theNano-ITC, an isothermal titration calorimeter designed to measureprotein-ligand binding, and the Nano-DSC, an ultra-sensitive scanningcalorimeter used for applications such as measuring the stability of proteinsand other macro-molecules in dilute solutions.