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Agilent Technologies | Delivering Complete Scientific Outcomes for Labs and Business | WELL

Company 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 [1].

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 [2].

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 [3]:

  • 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 faster.
  • 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 [4].

Increased Investment in Biology-Based Research?

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 [5].

Acquisitions

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 [6]. 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 [7]. 

What does the Future Hold for Agilent Technologies?

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) [8]. Furthermore, according to Moody’s, Agilent’s debt level is serviceable and the company’s debt has not been downgraded.

Find out more about the HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)

Read our WELL Whitepaper "Beyond Big Pharma | Investing in the Future of Healthcare" here

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. 

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