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Agilent: Description and History
With a long history of innovation, Agilent Technologies is a global leader in life sciences, diagnostics and applied
chemical analysis markets.
Employing over 15,000 people
globally, the company was established in 1999, as a spin-off from
Hewlett-Packard’s (HP) “Medical Products and Instruments Group”, including
instrumentation, chemical analysis, electronic components, and medical
equipment product lines. The split was predicated on the difficulty of growing
HP’s revenue stream and on the competitive vigor of smaller, more agile
companies. The resulting Initial Public Offering (IPO) of Agilent stock was the
largest in the history of Silicon Valley at the time .
In 2013, Agilent announced its
decision to separate into two publicly traded companies, Agilent – a life
sciences, diagnostics, and applied markets companies and Keysight Technologies
– an electronic measurement company .
Serving Six Key Markets
Agilent Technologies provides
analytical instruments, software, services and consumables for the entire
laboratory workflow. Agilent focuses its products and services on the following
six key markets :
- Food: helping ensure global food supply is free of contaminants. Customers
include government regulators and labs that control food safety, as well as
private companies that produce, package and sell food to the public.
- Environmental and Forensics: from pesticides
to pharmaceutical residues to trace metals, Agilent provides fast, accurate and
sensitive methods for monitoring contaminants affecting quality of life.
- Pharmaceutical: Agilent has
one of the broadest solutions portfolios of any company serving the
pharmaceutical industry. The firms’ solutions provide precise answers for every
segment of the pharmaceutical industry, from disease research and drug
discovery to drug development, manufacturing and quality control. The
start-to-finish solution set means that customers can get products to market
- Diagnostics: Agilent gives
doctors a head start in the fight against cancer and other diseases. The company's solutions help pathology laboratories deliver fast, accurate information to the
doctors, hospitals and medical centres they serve.
- Chemical and Energy: Agilent’s
helps customers maximise their production and predict failures in their
refineries before they happen. Agilent also helps energy researchers
investigate biofuels, renewable fuels and other forms of alternate energy.
- Research: Most life
sciences and diagnostics research is done at universities, with funding from
governments around the world. Agilent is helping researchers learn more about
cancer, cardiovascular diseases, diabetes, Alzheimer’s, Parkinson’s, autism and
other ailments. The company’s’ instruments, software and sample preparation
solutions help scientists conduct faster, more accurate research.
US/China Trade Tensions
The lab equipment and services provider has
recently been hit by US-China trade tensions. Sales revenue in Chinese market
faced head headwinds in the first three months of 2019, as government-run food
science labs, tasked with performing quality control measures, reduced purchases of machines from Agilent. The
country’s government-run quality control and food testing labs, were until
recently, a significant buyer of the company’s equipment, but the food market
hasn’t fully recovered from a recent slowdown .
Increased Investment in Biology-Based
Small-molecule drug research is
losing market share to the rise of biologic drug research, such as gene
therapies and cancer immunotherapies, and although, Agilent Technologies serves
both parts of these markets, the company currently has a larger presence in
small-molecule pharmaceuticals. With this shift taking place in the market, it
is likely to accelerate Agilent’s investments in biology-based research .
Agilent has made various
acquisitions in recent years. The latest, is the firms acquisition of BioTek
Instruments for $1.17 billion, which has boosted Agilent’s rapidly growing cell
analysis franchise .
It is expected that the combination of these two
companies will accelerate the company’s multi-year growth strategy - an example
of Agilent investing in high-growth segments of the life sciences market .
What does the Future Hold for Agilent
Although Agilent Technologies faces
headwinds, the company showed solid performance in fiscal 2018, with generated
revenues totalling $4.91 billion. Additionally, Agilent has shown impressive
growth in its Earning Per Share (EPS), growing it by 35% per year, compound, in
the last three years (2016-2019) . Furthermore, according to
Moody’s, Agilent’s debt level is serviceable and the company’s debt has not
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As of 6th August 2019, the HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL) held 3.33% of its weight in Agilent Technologies.
Article Date: 7th August 2019.