On Thursday, the U.S. Commerce Department implemented an immediate ban on exports to China of certain Liquid Chromatography / Mass Spectrometry (LCMS) and flow cytometry instruments, which could potentially be used for military purposes. TD Cowen analysts have noted the U.S. government's intent to restrict China's access to specific life science instrumentation, estimating that the revenue exposure to the ban is limited for affected companies, but additional bans could follow.
The ban specifically targets instruments used in 'top-down proteomics,' with Thermo Fisher Scientific's (NYSE:TMO) Orbitrap mass spectrometry franchise and Bruker (NASDAQ:BRKR) Corporation's (NASDAQ:BRKR) timsTOF mass spectrometry line being the primary technologies at risk.
While it is uncertain if high-resolution QTOF mass spectrometers, offered by companies like Agilent Technologies (NYSE:NYSE:A), Danaher Corporation (NYSE:NYSE:DHR), and Waters Corporation (NYSE:NYSE:WAT), fall under the ban, the analysts included their estimated revenue exposure as a precaution.
According to TD Cowen's analysis, Agilent's QTOF mass spectrometry products could represent a 0.6% revenue risk due to the 20% revenue exposure to China, assuming these products meet the criteria for the ban.
Bruker, known for its focus on proteomics, might face a 0.6% revenue risk, with the assumption that its timsTOF line, priced at around $300,000 per instrument, accounts for 3% of total sales and 15% of China exposure. Danaher's estimated revenue risk is about 0.2%, factoring in its Sciex QTOF mass spectrometry products and high-parameter cell sorters and flow cytometers.
Thermo Fisher Scientific, with instruments comprising 17% of total revenues, could see around 0.4% of revenues impacted, considering its LCMS segment, which includes the Orbitrap family, represents a significant portion of its instrument sales. Waters Corporation's management does not believe their QTOF mass spectrometry instruments are routinely used for top-down proteomics, which could imply zero exposure to the ban, despite an initial 0.6% revenue risk estimate.
The situation remains fluid, with further clarity needed from company managements and potential additional restrictions on the horizon. The analysts emphasize the importance of monitoring these developments as they unfold. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 10 additional ProTips and detailed financial metrics, including exclusive Fair Value calculations and growth forecasts, available through their Pro Research Report covering LAB and 1,400+ other US stocks.
For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 10 additional ProTips and detailed financial metrics, including exclusive Fair Value calculations and growth forecasts, available through their Pro Research Report covering LAB and 1,400+ other US stocks. The situation remains fluid, with further clarity needed from company managements and potential additional restrictions on the horizon.
The analysts emphasize the importance of monitoring these developments as they unfold. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 10 additional ProTips and detailed financial metrics, including exclusive Fair Value calculations and growth forecasts, available through their Pro Research Report covering LAB and 1,400+ other US stocks.
The situation remains fluid, with further clarity needed from company managements and potential additional restrictions on the horizon. The analysts emphasize the importance of monitoring these developments as they unfold.
In other recent news, Standard BioTools reported preliminary Q4 revenue of approximately $46.5 million, outperforming the consensus estimate of $42.3 million. This announcement followed a merger with SomaLogic, which aimed to create a more robust entity within the biotechnology tools sector. The company also announced the departure of its Chief Commercial Officer, Jeremy Davis, and the appointment of Alex Kim as the new Chief Financial Officer. These developments come amidst recent financial results which showed a 21% increase in quarterly revenue, despite a 5% year-over-year decline.
TD Cowen, an independent analyst firm, has adjusted the price target for Standard BioTools to $2.50, while maintaining a Buy rating on the company's stock. The company's future plans include an ambitious phase of expansion with a goal to close 4-6 growth-driving acquisitions from 2025-2026.
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