Beckman Coulter's Play for High Growth

Beckman Coulter Inc. 's decision in March to reorganize into three businesses instead of two formalizes a strategy it has been talking about publicly for months, to provide a "continuum of testing" from research through transitional to clinical diagnostics. In practical terms, the move separates the company's much larger but slow-growth clinical diagnostics business from its smaller but buoyant life sciences/drug discovery unit, which is riding the boom in genomics and proteomics analytical tools. Moreover, it provides a pathway for new research techniques and tools to find their way to larger, more lucrative clinical markets—a source of innovation that Beckman hopes will address the challenge of finding high-growth opportunities when more than two-thirds of its $1.9 billion of revenues comes from a mature, commodity-like business. The scenario is quite different from a few years ago, when the life sciences unit was a drag on earnings. It is now not only the fastest growing part of Beckman Coulter, but also a key to the company's future hopes in clinical diagnostics.

Most of the top diagnostics companies have efforts underway in genomics and proteomics, but Beckman's strategy, based on a mix of narrowly focused internal programs and small, but well-chosen alliances,...