A very good morning, and welcome to Tecan's Capital Markets Day 2019. It's my sincere pleasure to welcome you all here in Männedorf, but also, of course, welcome everyone that listens live on the webcast and listens to the recordings afterwards. My name is Achim von Leoprechting. I'm the CEO of Tecan, and it's my sincere pleasure to be in that position. What we're trying to do today is give you an overview of Tecan as a company, but also as our market environment, and particularly give you some insights on how customers view the interaction with us now and potentially going forward. Maybe just quickly to go through the agenda of the day today, we will have three major segments in which we will talk about application focus and market segments that we're serving.
We're starting with the genomic applications, where we talk about our own capabilities and our own progress, but we will also have a presentation by Ambry Genetics that will talk about their experiences with laboratory automation and the workflows and our collaboration in their industrialization efforts. After the coffee break, we will talk about tissue and cell analysis and our offering. This will be presented by my colleague, Klaus Lun, who is with me here in the front this morning. Afterwards, we will talk about protein analysis. In the largest context, immunodiagnostics and mass spectrometry. Again, it's a first, we will talk about Tecan's capabilities and Tecan's strategy in that market segment, followed by a customer presentation, with a very exciting talk from The Binding Site and their CSO talking about deployment of mass spectrometry in a very new application field in oncology.
After the second coffee break, we will talk about enabling capabilities and our view on innovation, and this will be presented by Wael Yared, who is the designated CTO and Head of R&D, joined Tecan earlier this year. Afterwards, I will talk about operational excellence and our efforts to improve and continue our journey to build out a very capable and efficient operational network headed by Ulrich Kanter. Ulrich Kanter cannot be here today, unfortunately, because he's just flown to California to help with the integration and first steps of the integration productivity of our new site that we just acquired in California, and I will talk about this later in this presentation today. Later, I will then give an update on the partnering business, followed by my summary and closure, and then we will have time for Q&A before we break for lunch.
After lunch, for those who are with us today here live, we have set up a variety of demonstrations and live showcases where you get more hands-on insights on what we're doing and some of our innovation and new products that will come to market now and in the short-term future. With this, I probably wanted to start off with showing you again the cover of our most recent annual report that we titled, "Empowering the Century of Biology." This is truly what I and we as a team believe Tecan is capable of doing. This is what we're actually engaging in, and what we're driving forward in the years to come.
Tecan is benefiting actually from a variety of mega trends. I just wanted to take you a little bit through the background of our industries and some of the key drivers and enablers that are positive in our industry. First of all, we're looking at population growth across the globe, but also an aging population. That in itself, the latter point, of course, is a very positive event. However, it creates a lot of pressure on the healthcare system, demanding for better prevention systems, but also for clearer and more precise diagnostic systems that can be deployed more economically to capture this increased amount of people that will go into the healthcare systems. Secondly, there is high levels of investment in healthcare and life sciences in emerging regions and specifically in China.
When looking at the build-out of the healthcare system in China, it's fair to say that we're just at the beginning of really diagnostic and healthcare industry in China and also associated life sciences is growing at a substantial pace, particularly in China, but also other emerging regions. Thirdly, we are, of course, looking at the development of more targeted pharmaceuticals and the use of companion diagnostics. Just reflecting back at 2017, was a year where the FDA approved 46 new drugs. Out of which, we see increasing amount of immunotherapies, also going forward, what we can see the arrival eventually of genetic therapies that address some of the most important disease states.
Also very importantly, within these 46 drugs that were approved in 2017, more than 14 were novel drugs addressing cancer, which remains to be one of the most critical disease states that is being researched on and being kind of targeted for better therapies and diagnosis. We see an explosion of biological knowledge that derives from the life sciences industries and markets, but then rapidly transmits also into areas like food and environmental testing. For example, a lot of research is going on the microbiome and the gastrointestinal tract of humans and how they're affected by nutritions. There's a lot of research that is now moving over into the food industry, looking at better targeted nutritions that cope with allergies and intolerances of growing populations.
Lastly, I will talk about this a little bit more, is that emerging market of genetic testing for customers. This is something that has started just a few years ago. We see an exponential growth of a demand for consumer genetic testing. All of this, for us in our world, drives increased test volumes. As we are a laboratory automation company, that is, of course, beneficial. This drives need for increased productivity, reproducibility, Standardization, increased demand for precision in the execution of experiments, an increased demand for robustness and reproducibility of processes overall, but it also requires increasingly knowledge and capabilities in the areas of regulatory compliance, all of which drives adoption and penetration of laboratory automation in our view.
For those that remember the Human Genome Project, this is where I think you could probably credibly claim the century of biology really started. This was the largest global collaboration project ever conducted to uncover and unravel the human genome. As you are aware, this project started in 1990, actually. It was a consortium of research institutes that were venturing around this decoding of the human genome. There was a couple of steps in between. It took nine years actually to decode the first chromosome. Nine years of work and preparation. Then a year later, the first fruit fly organism was decoded, and subsequently, the first draft of the human genome was created. 2002, the first mammal, the mouse, was fully sequenced. It was not before 2003 when the first full human sequence was produced.
This, as you can clearly see, took 13 years and actually absorbed more than $3 billion in generating one human genome sequence and analysis. Now, the world around us has changed quite drastically, we see an accelerated adoption of similar technologies in areas, for example, like population sequencing programs that are conducted now in numerous countries. We see more than 50 programs aiming at substantially screening populations for the benefit of understanding rare disease diagnostics, improving specific aspects of drug discovery, looking at the carrier status of diseases in certain areas of the population, improved pharmacogenomics, also looking at population-wide susceptibilities of environmental factors and other elements.
For us, of course, that is probably one of the most fundamental events right now that is happening around us, you can see that in various countries, these programs are heavily funded and requiring a lot of products that fuel this upscale of sequencing capabilities in all these efforts that are being run. I mentioned before consumer genomics. That's been a pretty new venture for the industry, it all started off significantly in 2014, where you were looking at maybe 1 million consumers that sent their DNA for testing or did some spitting in a tube arrangements and sent it to companies to be sequenced. This proliferated already until 2018 to 12 million consumers that sent in their samples for testing.
You can see on this projection curve that is expected that this consumer genomic market will now rapidly grow and really accelerate beyond the kind of pace that you've seen before. This is all driven by areas like ancestry research. This is probably the most commonly known aspect that is used for today. We will see already today that most customers that send their DNA for testing consent already that this information may be used for research cases. As you can imagine, that this already drives a lot of increased understanding, for example, of genetic health risks, which is another area, of course, of interest. There is still regulatory debate on how this is going to be used, I think we've seen the first clearances of companies of 23andMe and others that are moving very fast in this direction.
Of course, this gives increased opportunities to more personal and more precise diagnose and see the predisposition of patients, for example, for breast cancer, looking at targets like BRCA1 or BRCA2 and other molecular markers that indicate susceptibility to these type of genetic health risks. Then there's, of course, other areas like wellness testing or carrier status to try to understand for certain inherited conditions of diseases like cystic fibrosis or sickle cell anemia and other areas of the healthcare disposition. Now where does Tecan fit in and where are we engaging in? Probably, I would like to start with describing the healthcare uses of what our customers try to do and are actually doing as we speak and will be doing going forward.
We engage in the healthcare uses of areas like cancer research and cancer diagnostics, infectious diseases, hereditary diseases, rare and orphan diseases, metabolic diseases. Virtually all the critical elements of the healthcare questions and conundrums that are being addressed and unraveled today, and of course, several more. We physically work with 3 main categories of clients in that environment. Firstly, we work with research institutes that try to understand disease mechanisms and patterns and disease origins. Secondly, we work of course with pharmaceutical industries where they use our products to upscale the efforts in drug discovery and drug development to address and tackle these type of disease modalities. Lastly, we're working with IVD companies that increasingly take novel technologies to better diagnose and on a more personalized and precision level, treat these patients with these new drugs that come to market.
Our application areas and our application focus, which is also the theme for the day today, is really centered around genomic applications, protein analysis in the broadest sense, including immuno and mass spec applications, but also cell and tissue analysis. All of which are very complementary and critical to understand these healthcare uses and disease states. Our suite of detection and assay technologies includes supporting sequencing workflows, including next-generation sequencing, novel workflows, but also traditional like PCR and qPCR, areas like mass spectrometry, immunoassays, imaging, advanced staining, and several more. These applications and assay technologies are very core to what Tecan is able to automate and facilitate within the customer base that I just described earlier. What do we bring to this equation? What has Tecan built up over the last nearly four decades of experience and market presence?
We have a wider range of experiences around these workflows and applications. We bring, I think, a comprehensive suite of robotics and automation products, including increasingly software and informatics products. We have a lot of experience in detection and imaging, of course, we have the origin in the area of precision handling of liquids and increasingly engaging also to complement our instrumentation workflows and offerings with reagents and consumables that help to drive the productivity and the utilization of these applications forward. All this, of course, is built on a very solid foundation of our product development and system integration experience. Our area of particular strength, I would call out, is in addition to the engineering capabilities and operational footprint, the regulatory and quality experience that we bring to this equation.
I will explain later why that is so critical in the positioning of Tecan in that dynamic market environment. Of course, we, I think, leverage and run on a very efficient operational footprint. Just to illustrate this a little bit further, Tecan today is around 1,800 employees, increasingly globally distributed and looking at a very, I would say, important and capable skill set of people that come with the distribution of 10% of our employees being PhDs, 33% or 31% having advanced scientific grades, and 29% of our employees are actually trained engineers. I think we have a very capable and very motivated and great workforce that helps us in this venture to grow the company and build new and novel technologies going forward.
In this set of 1,800 professionals, we have more than 550 employees that would raise their hand to say, "I'm expert enough in a given application area like genomics, like cell biology, or like mass spectrometry," to train a class on this application area. I would say we have a remarkable pool of people that are looking at it from either personal or private experience, or training in university or industrial settings that have practical experience in all the things that we want to do. In aggregate, we spend per year approximately 85,000 hours to support our clients with setting up their applications and delivering the productivity of the systems that we ship and install in their facilities. From our distribution of clients, today we are approximately looking at 60% of our clients being in the clinical diagnostics space and 40% being in the biotech, pharma, and academic base.
We see that as a very good distribution of clients around the kind of value axis that I just explained to you before. Lastly, we're very proud to innovate and drive innovation and IP generation forward. We're looking right now at a portfolio of more than 600 patents that substantiate our position in the market and of course, help us to defend pricing and share gains in the markets where we engage in. That being said, we look back, I think, at a very good performance over the last couple of years in terms of the revenue growth that we were able to drive in the markets that we engage in. I think we clearly benefit from all the megatrends and the market conditions and surroundings that I explained to you.
You can see, starting out in 2013, the revenue base grow by more than 50%, and we also, in the same time frame, were able to capture and generate quite a good flow of operating profit and net profit in the same time. I think that positions us really well for future growth and the expansion of the business in the market segments of interest. Just to illustrate a little bit more where this growth came from and what basically made up this growth acceleration that started after a period of, I would say, top-line stagnation with the new team coming on board in 2012 and 2013, where we, I think, executed a new strategy and the deployment of that strategy in a very consistent and clear way.
Sales total went up, as I said, more than 50%, and about two-thirds of this growth were actually coming from organic investments and organic contribution, and one-third came through M&A. We've seen major new platform launches that, of course, helped us to drive growth and market share in the markets of interest. We've seen a very good and sustainable regional expansion, particularly in China, where now we're looking at more than 110 professionals that work both on the life science side but also on the partnering side to grow our franchise in China directly from several facilities and support centers that we have installed in China.
We see, of course, the recurring revenues that have grown, and I would show you later on how important that is for us in the context of our growth journey, and we are offering more and more complete solutions for the workflows and applications of interest. Just to highlight a few of these growth contributors and elements of this growth journey. The first callout here is the Partnering Business, which saw growth from 2013 to 2018 in an aggregate growth at around 9% over that period, and now contributing to 45% of the total revenue of Tecan.
We've seen China grow from 6% to 10%, always keeping in mind that the revenues that we report in China are only the products that we directly ship into China and exclude all the Partnering Business products that we ship to European or U.S. locations that eventually then also find their way into Chinese laboratories and in clinical settings. The recurring revenues increased from what was 2013, 34%, to now in 2018, already 42%. We're very happy with the expansion of that very important growth area for us. Within the Life Sciences division, just to give you some illustration of the genomics market that I talked about before, the genomics within the Life Sciences segment grew from what was 17% in 2017 to already a third of our revenues being generated in the broader genomics context in the Life Sciences division in 2018.
Now to continue and deploy the corp strategy going forward. Some of you have seen this slide before, but I just want to give you some more illustration on what we're aiming at and where our expansion capabilities are. This slide illustrates the market segments that we're interacting with, the Life Sciences segment and the diagnostic segment, each of them being characterized at a size, total market size, at around CHF 55 billion to CHF 60 billion, depending on the reports that you're reading, with an underlying CAGR at around 3%-5%. When looking at our organizational structure and the divisional structure, you see underneath that our Life Sciences division pretty much lines up with the Life Sciences market segment and the Partnering Business with the IVD market segment.
There's a bit of a crossover where in life sciences, we of course sell some products into clinical and regulated market, and in the Partnering Business, we sell some products into the life sciences or applied markets. I think looking at the market segment themselves, you can also see that the distribution between reagents and instrumentation is vastly different between life sciences and diagnostics. We participate predominantly in the instrument segmentation of both market segments, where we have a very good presence in laboratory automation and the outsourced part of the diagnostic system where we capture the OEM capabilities in the diagnostic arena. We see continued growth opportunities in that market, both through organic but also inorganic consolidation in that space of interest, and we're very, of course, happy with that market that we're serving in that regard.
Secondly, we see continued opportunity to expand our reach and indicated by the arrow on number two in additional technologies that we can be commercializing into the life sciences segment. Today, we have a very capable range of technologies that we can supply and support, but I think there's substantially more that we can capture and credibly own and support in that segment, and this will predominantly come from M&A activities. Lastly, as I said before, we have a high interest in capturing more recurring revenues and more reagents and consumable, so we're very actively looking both at internal but also M&A opportunities to expand our completion of products that we can put on our systems and capture more of the reagent and consumable revenues that go through the installed base. In all, you see there is, I think, a very dynamic environment overall.
I think there's a lot of opportunity for us to grow into, both organically and inorganically, and we have, of course, a specific focus on growing the pillar 3, as we call it, in regards to reagents and consumables. Now moving on to the application areas and the three elements of genomics and protein analysis and cell and tissue analysis that I mentioned to you before. I just want to illustrate with this slide or representation, one of the, I think, particular strength of Tecan in these three application areas. As we are serving with our Life Sciences division, mainly the individual workflows of the application areas that we're interested in, and through the Partnering Business sample-to-answer systems through our IVD partnering channel.
I think in particularly the application areas that I highlighted before that are on that journey from transitioning from research into clinical diagnostics, we are particularly strong and well-positioned to be that chaperone of transition for technologies like next-generation sequencing, advanced mass spectrometry, application and sample preparation methods like liquid biopsies or the analysis of circulating tumor cells and various others, including areas like tissue pathology, enhanced immunodiagnostic tools, and so on. I think we as a company have a great footprint in the research environment. We work with a lot of companies that use these emerging technologies in what is called the laboratory developed tests market.
Basically that market where large lab chains offer clinical services on self-validated systems, many of these technologies are on that migration into the more regulated and captured IVD space where we talk about the generation and development of a sample to answer result system. I think we as a company have a very credible foot and path to be that chaperone in that journey. Just to maybe come to the next sequence of the presentation, we will highlight to you now our views and our strategy around the genomic market in particular. I would like to have Klaus Lun come up now to give you the next section of the presentation, highlighting our internal capabilities, and this will be followed by a presentation by Joy on behalf of Ambry Genetics.
Thank you very much, I'll hand over now to Klaus.
Thank you, Achim. All right. Good morning, everybody. Again, in hearing Achim's presentation, I always get incredibly excited about in what kind of century we are living right now, and how privileged we are to be part of this story. It's the changes in technological innovations we are seeing right now in the field of biology, and on some of the areas I will talk about today, is just incredibly interesting and revealing industry that has, I think, a long path to grow, and has to, I think, show a lot of new technologies and probably also new companies coming up. What I wanted to do now in the next sections, it's about applications. I want to give you an overview around genomics, what's Tecan's position in genomics, how do we address that space, and how do we think our products deliver on what customers' expectations are.
I will talk about cell biology, I'm very proud that also today we will be able to show you one of our new instrumentations that we are going to launch in June, end of June, at the SLAS in Europe. Lastly, we will talk about proteomics. As some of you might be aware of, right now, the American Society for Mass Spectrometry is happening in the U.S., one of the key shows around proteomics, just having debriefed with some of my colleagues, it looks like some very interesting, innovative approaches that are coming up that are in line with what I'm going to present you today. I think it's going to be an exciting section. In addition to that, too, it's easy for us to stand here and tell you how great our products are. All our customers love it.
It's a great pleasure that we have one of our customers here today, Joy from Ambry Genetics, who will present and give you an overview on how our instrumentation is being used in their lab and is helping them really to increase overall productivity. Let's get going. With probably one of the most exciting areas in our industry, which is genomics. Genomics is a rapidly growing market. It's a great place to be in. All markets for fundamentals are very positive. It's growing mid to high single digit. It has pockets of growth that are far in the double digit area. It has some trends that came up over the last two, three years that we are convinced are going to stay.
This is something that's not going to be over in one or two years. I think talking about the century of biology is probably reflecting what we think kind of impact all the genomics technologies are going to have. What we call out here, the move into clinical. This is just beginning. Even if people think, oh, qPCR, all those diagnostic tests have been in the clinical for a long time, with new technologies to come, there is, I think, much more to see. The NGS, next generation sequencing, has become a key trend over the last 10 years. It's kind of impossible to think that academic institution or for pharmaceutical company has not a sequencing instrumentation and starts to look at expression profile of cells. Direct to consumer testing. Achim mentioned it before in his presentation.
It's come from nowhere. We believe it will go very far with ancestry testing probably being one of the key drivers. All wellness and health parameters around it, we think being one of the key elements that will drive the growth there. New technologies like CRISPR. I mean, who was talking about CRISPR two, three years ago? A group of very experts who was working on it. Now it has become an area by itself that requires a specific workflow, it requires specific reagents. We expect much more to come along that. Also liquid biopsy. A lot of talk has been made around liquid biopsy. We think it's really at the very beginning. Liquid biopsy to analyze cells, liquid biopsy to monitor disease progress, liquid biopsy to develop new pharmaceutical for rare disease.
All things that we think are going to happen in the context of genomics. What does this mean for Tecan? How are we going to capture this unique opportunity? There are two ways we are going to do that. One is, we have automation instrumentation that can be used to improve the workflow of our customers. In addition to that, we acquired, in fall last year, a company, NuGen, that is now Tecan Genomics, that delivers us reagents that we can use to participate in the field of NGS library preparation.
By taking our reagents, taking our instrumentation, putting them together, and having in mind how those workflows run in our customers' labs, we are now able to deliver solutions that really address what the needs in the lab are. The easiest way is that you walk up there to your instruments, have a plate with samples in there, the instrument does everything for you, and at the end, you get a library ready that you can put on the sequencer. Important to know, and you see it on the right side of this slide. We are going to adopt the reagents on our instruments, but we are not going to stop to sell those reagents also on third-party instrumentation.
We are still supporting those Tecan Genomics reagents also on other automation systems because, as I will explain to you later in the presentation, we have some very unique capabilities in our reagents that drive a big request also to be automated on other platforms. In terms of the workflows, what areas do we cover? If you start very simple with the sample collection, that's where everything starts. There's a big varieties of samples that can be used. In, let's say, 80%, 90% of the cases, you start with an extraction of the nucleic acids, be it DNA, be it RNA, that then run into several workflows that we have lined up here on this slide. Let me call out NGS sequencing.
You start with a sample, do the extraction, run into NGS library preparation, go into QC, and put the instrument on a sequencer and drive the respective data analysis. Pick qPCR. It's a very established method, and we called out here an application around molecular diagnostics. That's where we are able to offer really end-to-end solutions, sample-to-answer solutions, mainly driven by our partnering business, where we're able to deliver instrumentation that exactly addresses some molecular questions that those instruments can deliver. Things like cloning. Cloning has been around since 30, 40 years. With the CRISPR hype, with the production of biopharmaceuticals, it has become a key workflow that sees a big demand around higher throughput, where also our instrumentation is able to deliver some very unique workflow solutions. Genotyping.
With the Tecan Genomics reagents, we have microarrays in our portfolio, and it's a technology that was declared not to grow anymore many, many years ago. I think facts are just providing the opposite. It's going to stay. It has its position complementary to NGS, and I think we are convinced that it will continue to be there. If you take a single cell, it's, I think, incredibly exciting area to look into, analyzing single cells, driving genomics of single cells, where we are currently also looking into. I think Achim mentioned it before. Genomics per se has been already a growth driver for Tecan, for the life science business. We started to drive an application focus already back in 2013, when the overall contribution of genomics to the life science division was about one-sixth of the sales.
It now went up, if you look back in 2018, to about one-third. We expect the contribution of genomics going forward to be also significant in the overall Tecan context. On the partnering side, and I will talk about that, we have several projects that are already on the market that exactly capture the genomics applications and molecular diagnostics applications. Let's pick one area to go a little bit deeper and give you an overview on what kind of product offering we have. Let's take NGS library preparation. What you see up here is the typical workflow of library preparation. What we called out in blue is the area where we are focusing in, where at this point, from the type of instrumentation and reagents we have, we are currently focusing in.
It starts very simple if you go with the sample collection, the sample identification, the aliquoting, the extraction of the nucleic acids, the library preparation, finally, sequencing and the data analysis. From our focus, what we want to do, it's exactly points from two to four that we want to go after. We have the reagents for the NGS library prep, I will tell you in a second how unique and differentiated those reagents are, and we are able to improve the overall workflow in the sense of productivity by a factor of two at least of what is currently happening out there. Let me give you some examples on the technologies, what we have. What you see on the left side are library prep technologies. It talks about microarrays.
What you see on the right side are some of the unique elements of our reagents. One is the DNA-seq kit called Celero. It's a technology that allows us within, again, four hours to develop a full library that can go on a sequencer. A key part of this Celero workflow is also the NuQuant technology. With NuQuant, what is called up here, we can do DNA quantification at the end, library QC, library normalization in a very short period of time with less resources required. You don't need expensive instrumentation to do that, I will comment about it in a second, but also other technologies. As this space is just continuously evolving. If I would be standing here a year ago, probably some of those elements would have been different. If I will be here next year, there will be other elements up there.
It's driven by a continuous innovation of new technologies, new products, that improve overall library preparation. The example that we call out here is AnyDeplete. If you're looking for a very rare transcript, this is the technology to use, for single-cell applications or if you use bulk analysis of larger cells. Let's have a look at NuQuant. It's a technology that, I think, we launched beginning of this year that is getting very positive feedback from the market, this explains why that's the case. Purely from a workflow point of view, it starts to cut off hours of the traditional library workflow. You don't need to invest in expensive instrumentation, it gives you the ability to have an integrated system that delivers an end-to-end workflow much easier than compared to other solutions that are currently out there.
The examples we call out here is quantification with qPCR, this expensive instrumentation like the Bioanalyzer that require additional steps, that require additional space in the lab that you need to have and run if you're not using the overall NuQuant. In the context of NuQuant, in the context of Celero, the next step, what we did was aggregating and putting together our instrumentation with the respective reagents. We launched at the beginning of this year at the SLAS show, the NGS DreamPrep, which is now an integrated system that delivers end-to-end solution from purified sample into the system with a final library that can go on a sequencer. What makes it so unique, and I think what's drawing the attention and making conversations of our salespeople out there easier with their customers, it drives dramatically productivity of labs. Right.
Before that, you couldn't do more than one library a day. Now you can do two libraries a day. A workflow that used to be 1.5 days is now down to four hours, which starts to create attention at our customer base. It's a fully walk-away solution that you can start it in the evening and have it in the morning, or get it going in the morning and do a lot of other things in parallel, and it's very user-friendly. At the end, and you will see this for the audience that is here today in the demonstration of the Fluent system this afternoon. It's really very simple to use. It's one button to press and get the respective application going. It's very much integrated also in the sense of the instrumentation that is within the DreamPrep.
We have, of course, thermal devices and shakers if we need to cool or heat respective elements. We have on-deck thermal cycling integrated. We have a plate reader integrated, and all of this is possible by leveraging the functionalities of the Fluent, right. It's a three-arm system, and three-arm means that we can do pipetting, we can do plate transfers, we can do complicated liquid transfer application that others can't do that in a similar way. Those genomic workflows have, I think, a very relevant implications, right. One of the key concerns of everybody doing genomic analysis, working with DNA, is contamination. You need to make sure that if you have a plate of 96 DNA wells and you're transferring liquids, that you better make sure that nothing of well A goes into well B. Excluding contamination is a key requirement.
The most straightforward way to do that is to use consumables that are used once in the respective workflow. The requirements for those consumables, careful listening to our customers, are very high because they need to be DNA, RNA-free, right. They need to be free of enzymes that kill or digests nucleic acids, right. They need to be sterile, and they need to be transparent to allow a visual control of the overall liquid handling. I think those are all elements that went into the development of the consumables and mostly pipette tips that we sell for those genomic workflows. I think it's important to say that those consumables are as important as the overall instrument.
It's the combination of the instrument and the respective pipette tip that at the end guarantee the performance of the overall system. It's so key that we are up to and able to deliver the overall quality that is needed. I think I'm very proud to say that having all those consumables out there, the question around sustainability, the question around how do we treat waste, is something that is on top of our agenda, and it's something that we have been addressing over the last year and will continue to address. We very thoughtfully designed new packages, new racks and pipette tips, always under the assumption, can we reduce plastics? Can we reduce waste that is being created? Over the last two years, we were able also to launch some pipette tips that exactly fulfill those criteria.
Going forward, we are going to continue to focus on that area. All of the discussion around DreamPrep, the ability to cover the workflows out there wouldn't be possible without our core instrumentation technology, which is the Fluent. Some of you might recall that beginning of last year, we launched the Fluent Gx. The Fluent Gx was the last kind of launch in the family of the Fluent. Fluent Gx comes with all the capabilities of the Fluent, but also with the regulatory requirements to run such an instrument in a regulated environment. Which if you think about the discussion around genomics, where do a lot of those tests that are being done happening? What are the areas where those instruments are being placed? The Fluent Gx, I think, has become for us a great tool to place those instruments in a regulated environment.
I talked a lot about genomics for the Fluent and with the NGS DreamPrep, we have a solution that is very dedicated for this kind of application. The Fluent itself, I think that's one of the strengths also of the platform and one of the strengths of Tecan, was designed to be very flexible and very open so that we can adopt it for a lot of different workflows that we are looking at. Like cell biology, I will talk about that in a second. Like applications in protein sciences, we will also talk about that today. Other genomics applications like synthetic biology, LC-MS, biobanking or also applications in the overall forensic space.
What you see here is just, and I'm not sure if that for our viewers on the web that's visible, but a couple of visuals to give you an impression of the overall flexibility and what the instruments can be used. What you saw in the middle is the robotic arm moving plates around, and it has, I think, probably some of the features that people assume as, oh, this is quite normal. If you think about it's really unique that the arm is able to move around the overall deck knowing where are all the different positions and really finding its optimal and fastest way around, which sounds, yeah, what is it about? That in combination with the capacity that the instrument has, drives a strong productivity in increasing of the overall instrument. Coming back to a topic that Achim raised in his presentation.
The unique capability of Tecan to go from life science research into in vitro diagnostics. I think it's something that we've been talking about a lot. One of the unique identifiers of Tecan is that we are in the position that just by talking to all the different customers and labs out there, we understand very quickly what are the new applications and new trends coming up. If there is, for example, a diagnostic company who wants to develop a molecular assay, it's very likely that they start with one of our instrumentation instruments. We can give them and show them the path of what does it mean from a research instrument to take it and then deliver a frozen solution that they can really then go out there and sell.
Genomics, as I said in the intro, is an area where our customers exactly went that path. They started with an EVO system for nucleic acids applications and then realized, oh my God, there's a big demand around this overall system. Let's find a way to deliver a frozen solution, That's exactly then how the overall partnering elements came in. I think this capability of having a very strong research position, combined with a strong regulatory knowhow, to be able then to transfer it into an environment that requires consistency, reliability, requires consistency around result is again, I think one of our key differentiators. What are the examples that we want to call out here? One of our key clients on the partnering side, which is Abbott.
It's the Abbott's m2000sp and the m24sp, which at the end, started off on an EVO system that you see on the left. It was a kind of standardized genomics workstations for the purification of DNA, RNA, for the cleanup of the DNA, RNA, and for the quantification and the setup of the PCR. It started off with what is on the left and I think ended into a very dedicated and tailored system on the right with the two elements differentiating around the required throughput of the different instruments. Another example is also around nucleic acid purification. It also started on EVO with proprietary reagents from one of our customers, where they do nucleic acid purification. The example we are calling out is from CenTaur Biotech. If you look at the picture at the left, that's where it started off.
That's how we got the development going. If we then look at the picture on the right side, it's a dedicated system with the branding of our customers on it that is doing the nucleic acid extraction exactly with the reagents that our customers provided. The reasons why we're calling out also those examples is that they have been very successful in establishing those kind of technologies in the market. Good. That was most of the kind of genomics topics that I wanted to cover in my presentation today. I think as I said at the beginning, the market fundamentals that we see, we are convinced they're going to stay. I wasn't part of it, but if, I don't know, Silicon Valley in the '70s could be compared to it, probably it was like that.
It's kind of new innovations coming up everywhere. I think we are incredibly excited that we can be part of this overall journey, but also that we at Tecan can have instruments that can help to advance the overall science around genomic studies in a very dramatic way. That's also why I am very pleased today to have, as I said at the beginning, one of our customers here. We will have Joy present us how our Tecan instrumentation was able to help and improve the overall productivity at Ambry. Joy Crandall is the Director of Asset Development at Ambry Genetics. Some of you might be aware, Ambry Genetics was acquired by Konica Minolta and is a leader in clinical diagnostic software and testing solutions. Joy has been with Ambry for about 10 years.
I think was on there very early in establishing one of the very early genomic assays that the company was doing. She was instrumental in what Joy will talk about, establishing the Superlab at Ambry, which I think we are also very proud of. The Tecan instrumentation was probably instrumental for giving Ambry the opportunity to deal with this throughput that was required at that point. Therefore, please join me on the stage. She will give you an overview on Ambry Genetics. Thank you.
I just wanted to thank Tecan for inviting me out and giving me the opportunity to tell everybody here a little bit about Ambry Genetics and our collaboration with Tecan. Ambry Genetics is a molecular diagnostic company. We were founded in 1999 and have a staff of scientists, genetic counselors, and physicians. These people, along with our clinical laboratory scientists, have run over 1.5 million assays in our lab and have identified over 50,000 mutations. Ambry has a long history of first in our market. We were the first company in 2007 to use next-generation sequencing for molecular diagnostics. In 2011, we offered the first clinical exome assay. This is essential in helping the medical field resolve those rare genetic diseases. Sorry. I'm not sure what's going on. In 2012, we were the first to start the movement towards multi-gene panels as opposed to these single gene assays.
In 2016, we had our ATG lab founded. This lab is focused on resolving variants of unknown significance, which are mutations where you don't know whether or not it's pathogenic or harmful to the patient or just completely benign, where it has no impact. Ambry has developed over 500 different unique genetic testing assays, which makes us the world's most comprehensive genetic test menu. We are focused on over 20,000 genes with our rare diseases, our hereditary cancer, cardiology, neurology, and our somatic testing, where we take a unique approach of pairing germline test with the somatic test to help resolve those mutations. All of this creates a lot of data that we then send through our proprietary bioinformatic pipeline. This is known as Ava. This pipeline helps us identify mutations in the data where we can then send it back to the lab and confirm those mutations with secondary assays.
We give all of this data to our reporting team, which is comprised of the genetic counselors, physicians, and scientists, so that they can qualify it as benign, pathogenic, or if it is unknown significance. If it is of unknown significance, that then is sent to our ATG lab, where we can conduct RNA functional assays that are reviewed by a core team of structural biologists and medical experts. Of the 92% of the VUS sent to the ATG lab, we are able to reclassify 52% of them to be pathogenic and 40% of them to be benign, giving these patients the answers they were sitting there waiting for to either make a medical decision and have surgery or to know that they're not harboring a harmful mutation that they could potentially pass down to their offspring.
All of this makes Ambry not known for its profit-driven mindset, but more for our unwavering dedication to furthering patient care. Just to give you an overall perspective of all the different steps in our workflow. As Klaus was saying, we receive samples through the physician. They send us either blood or saliva in tubes, which we then extract the DNA or nucleic acids from it and send it through a target enrichment or library preparation process before it goes on the next-generation sequencers. After we sequence it, that data is sent through our Ava pipeline, where we can identify those mutations. Those mutations, if identified, go back into the lab where we can run secondary assays to confirm that they're real and not artifacts from the sequencing.
All this information is sent back up to the reporting team where they can assess it, classify it, and report it out to the patient. The majority of these steps take place within the laboratory, from the sample extraction to the sequencing and then back to the laboratory for that secondary assay confirmation. However, this entire process has an overall turnaround time from the time the sample was received to the time we generate a report. Once we offer an assay with an associated turnaround time, we have to maintain that turnaround time or decrease it. This creates a burden when we're trying to increase our sample volume without a way to scale it unless we add additional resources. Which is why in 2012, we looked at adding automation into our lab.
This is where we evaluated all the different liquid handlers on the market and decided to go with Tecan because of their reliability and also just communicating with other customers in terms of scalability. It seems like you could purchase a new instrument, install it in a very short amount of time, and it would work right away, which was key for us. The first thing we decided to automate was the normalization step. Previously in California, it requires two CLSs. One person to actually do the pipetting and another person to check that they were pipetting correctly. This would take about over an hour for 96 samples and two people. Once we automated it only required one person to walk up to the instrument, put the samples on the deck, hit go, and 12 minutes later, your samples were normalized.
This had an immediate impact on our TAT time. We were looking at other very easy to automate manual steps that were just taking up a lot of labor time in the lab. The video on the left shows tubes. These are the sample tubes that we're receiving from the different sites that we have to scan into our system to show that we're when receiving them and to extracting from them. We just added this device called a PosID onto the EVO system, and it took mere seconds to scan 16 tubes, which again, a CLS was previously scanning into our LIMS system one by one. We realized that the deck space on these instruments were very, very precious, so we wanted to maximize the capacity that we could run on each instrument. On the upper right-hand side, you could see 96-well racks.
That has the same amount of samples as one of those matrix tube racks in the upper right-hand side. Just by switching our labware format, we were able to increase our capacity by three times the amount. We also switched everything we possibly could to 96-well plates so that we're only tracking one barcode instead of 96 different barcodes. This resulted in a 25%-100% TAT time increase of samples each individual person was able to process a week and allowed us to open up the floodgates to our sales team to say, "You can send us more samples." After that, we opened up the Superlab to just handle the sample volume increase we were experiencing.
We wanted to design the Superlab to have maximum instrument capacity and productivity, which is again, why we looked at the market and reevaluated all the different liquid handlers with a fresh pair of eyes. We decided to, again, go with Tecan, but instead of their EVO systems, their new Fluent systems, which had the largest deck capacity out there on the market, as well as the fastest arm movement time to really increase that productivity that we were going for. The opening of the Superlab is what caught Konica Minolta's eye. They acquired us along with INCJ for CHF 1 billion in 2016. One of the things that Konica noted about the Superlab and why we were so eye-catching to them was the way we were maintaining sample integrity, even though we were processing such a high amount of samples.
They wanted to leverage this to expand our reach out to pharmaceutical companies and offer our genetic assays to them as well. Just to better illustrate what I mean by sample tracking and sample integrity, right after DNA extraction, what we do is a molecular barcoding assay. Essentially, just like you see on the crime shows, we get a DNA fingerprint from that sample. We have that fingerprint stored in our LIMS system and have downstream targets in our NGS sequencing that have those same targets. We're able to, on a molecular level, match up a sample that we received and extracted with that final result to make sure they are the same. In addition, we ensure that every sample and tube and plate is assigned a unique barcode that we can track through the lab.
We can actually track the entire life cycle of a sample through our lab, knowing exactly what reagents it was aliquoted with, what labware it was placed on, what instruments, what people touched it. All that is generated into a report. We also implemented something called barcode-based pooling. A common potential risk in the lab is somebody loading a plate wrong. We only barcode plates on certain sides just in case any user loaded it wrong, the Tecan would not scan it, and it would error out, and they would be able to correct it versus just aliquoting the samples straight and potentially having plate flips. That is something that we were able to implement on all our new Fluent systems. All this generates an electronic audit trail. We're able to show and prove to regulatory bodies that all these things actually happen real-time.
This is a much better approach than the traditional method of paper-based tracking, which has now been identified as high risk by regulatory bodies just because it's so prone to human errors. Another thing Konica really wanted us to do is to reevaluate if we were efficiently processing the samples with cost savings in mind. We looked at potential labware reformatting once again, since we knew that had such a high impact on our efficiency in the past. The new Fluent systems offered a very precise way of pipetting. We were able to transition our 96 well plates that we previously reformatted to into an even smaller 384 well plate. The 384 well plate is just made up of 96 well plates but has the same deck footprint.
Essentially, the wells are a lot smaller, and you would never want to manually pipette in and out of these plates. Because we're on an automated platform, we could reformat to these plates. This increased our capacity automatically by four times. It decreased the amount of peripheral equipment we needed to purchase to scale up. Instead of buying four thermocyclers to process 384 plates, we were able to just purchase one. It decreased the amount of waste and consumables we required. It also allowed us to reformat the actual reagents and reactions to at least half the original percentage, if not more. This had a major impact on our COGS and our walkaway time for the instruments. You can see the image on the upper left, those are just 12 96 well plates.
That makes up just three of these deck positions on the Fluent on the right-hand side for the videos playing. Each one of those little black spaces is the potential for another 384 well plate. This allows us a lot of scalability and in terms of lab processing to add another 384 samples, it's just an additional plate on the deck. The lab really never feels the impact of that sample volume increase. Another thing we wanted to do with all these new instruments, we wanted to ensure that we were using them as efficiently as possible. We reached out to Tecan to see if there was a way they could help us look at our data files to show instrument up and down time.
They happened to be working on a new software called Introspect, which they recruited us in as an alpha user for. It was interesting because immediately once we put this software on the Tecans, it just parses out your log files. It gives you the real-time data. We noticed patterns such as our night shift crew utilize the instruments less than our day shift crew, and they also had more errors. I was able to make the business case to hire another person dedicated to just training and supporting that night shift crew so that we had less preps and we were able to utilize those instruments efficiently. Just within a matter of a couple of weeks, we saw that instrument utilization normalize across shifts.
Another thing we used it for is easy visualization of that overall utilization across days of the weeks, months, so we can see if we're forecasting plugging in a new assay will actually work on our existing systems. Are we going to be jeopardizing our instrument redundancy or will we have to add a whole other shift of people in order to make it work? This, again, enables me to build a business case to purchase nine more Fluents recently because we're trying to launch a new clinical diagnostic assay. It brings the Superlab's total of Tecans to over 50 instruments that are still active in the lab. The overall payout for all these efficiency efforts was a large saving on our COGS initiatives.
Even though our sample volume was steadily increasing, our cost was steadily decreasing with the implementation of the Tecan Fluent and the 384-well processing. We also, over the last two years, suffered a 31% decrease in headcount, but even with that loss of headcount, we had a 63% increase in productivity per person. Finally, the overall impact of Turnaround Time. In 2016, we had an average Turnaround Time of about 20 days, and since the implementation of all these efficiencies, we were able to consistently deliver a 10-14 day Turnaround Time for all of our assays, even though we have increased our sample volume by more than four times the amount we had in 2016.
This allows us to deliver reliable results to these patients that may be awaiting life-altering decisions, as well as expand Ambry's reach into the pharmaceutical companies or just furthering patients and incorporating all this to further the impact Ambry has in the field of precision medicine. I just want to take time to acknowledge the Tecan support that I received over the years. They have been instrumental in the design and implementation of all these instruments, as well as my assay development team, and assay automation team, and of course, the clinical staff who actually run the instruments on a daily basis.
Great. Thank you so much, Joy. I think we are running good in time. If there are any questions maybe on Joy's presentation, we would be willing to take them now. Otherwise, I think we will have a Q&A session at the end. Are there one or two questions from the audience here around Joy's presentation? Yes, please. Do it.
I mean, you were saying you were elaborating.
Wait for the microphone.
Yeah. Thank you very much. Just one question. You were saying you were elaborating Tecan versus other offerings of competitors. I mean, the numbers are impressive, what, in your view, was really setting apart Tecan of those peers?
The first time we evaluated Tecan back in 2012, the thing that set them apart from the major competitor was the way we could do in-field upgrades. A lot of these competitors, if we decided to change the format of our instrument, we would actually have to put it on a truck and ship it to another state for them to do that update, which would mean that instrument was completely down for that whole time. We wanted something flexible that we could upgrade ad hoc almost, within our site at Ambry. The second time when we were re-evaluating everything, it was really the deck capacity and the speed. We kind of had the reformatting and our assays down, and we designed these new instruments to be more customized, whereas the first instruments, it was more about scalability.
The Fluent, on an Evo system, it would take 12 minutes to normalize those plates. On a Fluent system, it takes about seven.
Any other questions? Yeah.
Thank you. Once you have installed the Tecan automation in your company, how is the aftermarket working together with Tecan? How often do you have to have people from Tecan in your company?
We have an on-site engineer every day. It's more just to provide support in terms of training implementations. It's not necessarily instrument downtime. Prior to opening the Superlab, we probably had an engineer on site once every couple of months. The troubleshooting of the instruments is pretty self-explanatory. It's just our sheer volume of instruments now warrants somebody on site.
Thank you. Any other questions? One.
Thanks, Joy. You mentioned that at Ambry, the focus has been very much on the quality of the data and the sample and the integrity of the data rather than focusing as a profitable entity. You're doing incredibly high volume next generation sequencing now? Is the end game and the fact that you're now under corporate ownership to become more of a clinical service rather than a charitable service? Are you pushing forwards to develop next-gen into the clinic rather than the academic setting?
One thing that Konica was aligned on with Ambry was that vision of putting patient care first. That, again, has been extremely helpful in justifying additional purchases just because we want to ensure we're delivering the fastest result to the patient. Even though it may cost us a little more money up front, that is something that Konica and Ambry were both aligned on.
Okay, good. Joy, thank you very much. All right. Welcome back and to the Tecan Capital Markets Day. We go into the second session. We will continue now with the applications. We will talk about cell biology applications, which is one, I think, key area also for Tecan. We will look into proteomics, understanding what kind of trends do we see there and how does our offering give customers an overall advantage. Also, I'm very happy that in the cell biology section, we will talk about also new products, right? That we will launch by the end of the month. For the team here in the audience, you will have the opportunity to see the demo this afternoon. For our colleagues on the web, I just can encourage you, please have a look at the website. There is already some information available.
All right. Let's get started. We kick off with the cell and tissue analysis. Protein analysis. We will also have customer presentation around the protein analysis. Again, I think a great example on how our technologies can help customers and at the end can help to even get better diagnosis of diseases. For cell and tissue analysis, what I want to talk about today is give you an idea on what kind of capabilities do we have to capture the opportunities in that market and what kind of products are required. There is a topic around imaging and imaging technology. Also a topic around workflow, understanding workflow around cells and being able to capture this workflow. Let's have a quick look at the market. Again, I think a larger market within the life science space. Also with some very positive growth driver.
One that we called up on the left side of the slides was the cell-based assays or cell-based disease models. They have been around for a long time. People thought about cell-based disease models more than 20, 30 years ago. With the advancements in technology, with the advancements around induced pluripotent stem cells, we are now in a situation that companies are looking much more actively into creating cell-based disease models, be it in 3D cell applications or really just in suspension or adherent cells, and using those models to drive new discoveries, new discoveries around therapies and new discoveries around biological drugs that haven't been possible in this way and in this throughput just 10 years ago. A big contributor to the overall cell biology was the cell engineering and bioprocessing.
That industry or that segment has seen double-digit growth over the last four or five years, clearly driven by the need of biologics and the progress that has first been made in the production of these cells, but also the complexity of cell-based workflows. I think for anybody who has a biology background here in the audience knows that cultivating cells and making sure that the cells are then in the perfect state to run your assay is not the easiest task. The more complicated it gets if you start to work with primary cells, the workflows starts even to get more complicated. This complexity around the diversity of the different cells now requires also, again, automation solutions that make it easier to cultivate a big variety of cells. Then also to be able to run their respective assays.
I will comment in the second part of the presentation around the capabilities of what we call the Tecan Labwerx Group, which is our customization group that is exactly specialized to deliver solutions for those kind of applications. What is our product portfolio that we can use to address this market? For cell culture, cell engineering, it is our liquid handling platforms. It is the Fluent, it is the Freedom EVO. I call out here the Labwerx Group because those workflows are so complex. They require different incubation condition. They require dedicated instrumentation along the workflow. A lot of this happens with our customization group, the Tecan Labwerx Group.
For cell-based assays, of course, we have again the automation instrumentation. We have picoliter dispensing tools like the D300, which if you think of applications where you do those studies of small compounds or where you try to understand synergistic effects between compounds, the ability to pipette with a picoliter volume so that you don't need to do that dilution series is just, again, improving and speeding up a lot of these workflows. Of course, we have washers in the portfolio, and again, also LabX team integrating that. On the detection side, there is the Spark multimode reader that I will comment about in a second, but also the new SparkCyto, which is the product that's going to be available at the end of this month to the market.
For the audience here, on your back, you will see there is the SparkCyto shown as a functioning model that will be demoed this afternoon. Spark. It's our multimode reader platform that is being used for cell-based assay applications. It's been out there now for 2 to 3 years, and I think seeing a lot of positive acceptance and feedback from our customers. That's mainly driven by the ability to be flexible, that we can configure the system, it's upgradable in the field. You can develop new applications and get new detection modes set up. It comes with the ability to control the environment. If you think about cultivating cells, keeping temperature, keeping CO2, keeping the environmental conditions is key. It has a unique capability to adjust the temperature upwards, but also adjust the temperature downwards.
Once an assay has been done, you can chill down the cells so that they start. It's also that they stop their overall metabolism, and you can do, for example, analysis at a later point. There are also a lot of other technological elements in the Spark that we have IP protected that give it a unique angle out there. What you see here is now the new SparkCyto. I think it's the first time that we talk about it in this context. It's been a development that has been ongoing, and I'm very proud to say that we now have a product that is probably exceeding expectations that we had. It's exceeding also customer expectations. It went through all the beta tests with our customers, and so far the feedback was very, very positive.
The question is, what does it make unique in the sense of delivering on unmet needs? It's-- Sorry, that was too fast. It's about what we call real-time cytometry. Real-time means that you can run your experiment and start to measure multiple parameters in a well, be it making images that are fluorescence, measure absorption, measure fluorescence in one go, do the analysis in real time and decide what you're going to do with that information. You can do that in time intervals that at the end the user can define. What we realize is that it will be very difficult for a researcher to miss one of the critical events. Because cells do not grow at the same, they grow at different rates. They might even react differently at the different compounds added.
With the instrument, we can now make sure that in any of those experiments, we don't miss those data points. You see that the ability to cultivate the cells, you can put in the plate and just let the instrument run for one day, two days, or even one week to get the overall analysis going. It's real time in the sense that you can do the analysis on the spot, decide what are you going to do with that information. The example that we call out here is a very typical workflow in a lab where cell viability needs to be assessed, cell confluency needs to be assessed, and based on the input of these two parameters, a decision is being taken on what's to happen with the cells.
For example, you want to assess the impact of a compound on cell viability across different type of cells. You can cultivate the cells, you can set the trigger point around confluency. At 70% confluence, you want to add the compound, you can define at what stages you want to measure the respective impact of the compound. You will see a demonstration of the capabilities later this afternoon with a very, very similar experiment. I think the big advantage and also, I think, the unique identifier that we currently see is around the capability to do these things in a defined environment and to do them in real time. Okay. Good. I mentioned at the beginning our LabX capability. LabX is a brand that we launched mid of last year. LabX is all about delivering customized solutions.
Why I'm calling this out here in the context of the cell biology. What I mentioned at the beginning, the fact that cell biology workflows are so complex because cells are so different, right? It's, let's say, difficult to come with an off-the-shelf solution, say, "Oh, you use this instrument, it will deliver what you're looking for," but it requires a lot of customization. To be able to do this customization, it requires also a lot of understanding of the process. It's not possible to customize a cell workflow if you have no idea of what the overall customer is going to do. It also requires a capability where you're able to then also maybe engineer certain elements or parts that are so dedicated for this workflow, so that you're able to overall automate it.
You will see later in the presentation a quote of one of our customers. Every time I see that quote, this is, I think, really what Labwerx delivers. You will see, but to give a little preview, it ends with, "We are now able to do things that we couldn't do before." That's really the value proposition, what we're going into with this Labwerx. What you see on the next slide are two videos around custom-engineered parts, and how they're able to deliver along the overall workflow. While the video is running, I will just comment a little bit on what you're seeing. On the top left, it's a customized system with very specific tubes to cap and decap them. On the right side, you saw a system with also dedicated tubes where a rotation device came in.
On the left side, you see the video running with the capping decapping. For the ones of you who have been in the lab and remember trying to cap or decap one of these tubes, it sounds very straightforward, but if your colleague goes to work out every day and is closing a tube, you probably need a different effort to open that tube. To automate such a manual process in a way that it really works, and works consistently across the different tubes, is a very big challenge. I think it's one of the key parameters on why the understanding of the overall workflow for those Labwerx protocols is so essential. To give you an example on induced pluripotent stem cells. It's been around now for quite some while since the methods around were discovered.
The ability to do this in a kind of large-scale environment, to use this for research and therapy have been limited because the overall ability to automate that process has been so difficult. I'm proud to say that we have been able to automate this process now at a lot of different sites. We automated the process, for example, for retinal cells, where retinal cells are differentiated and are being used now as tool for phototherapies. What makes this capability so successful around this application is, of course, we have all the engineering knowhow and understand how software and those robotics works, but it's the capability of the team to understand what our customer wants.
If you're in the situation that we are looking at a cell workflow and a customer asks us for an automation proposal or how can we increase his productivity, we approach this in a very team-oriented way, right? Of course, we have the salesperson that understands the requirements and is there to interact with the customers. We go in there with the application scientist who has normally a PhD background, is very deep into the science, and understands what's happening. We go in there with a service engineer. Service engineer who is bringing a perspective, oh my God, if I need to add 20 instruments along this workflow, what does that mean? We go in there with a software engineer. That brings the perspective, what do we need to adapt along the workflow on our customized software to be able to translate that?
Is there a need to even develop new software? It's this teamwork approach that at the end enables us to really understand in detail what are the customer requirements to deliver the solution. Because you can imagine that somebody, if you have developed an assay and you are very good in labs and are very good in pipetting, and you know it works if you run around, and you know it works if you do it during lunchtime because then the centrifuge in the lab above is not running, and you know it works because your colleague is not here who interferes.
If you start to take those things into account, and also put that into the diligence of delivering that process, you start to realize that it's much more than just, yes, I need to pipette A from B, but it's really about understanding the overall workflow. I think that has been a very successful capability, and over the last years, we used it as a kind of tool for the sales rep. If a sales rep came along, "Hey, this could be a LabWare project," he mentioned that we have that capability, and the LabWare team that sits here in Männedorf picked up this overall project.
Considering the success that we had, we decided mid of last year that we want to call this out and want to really create a brand around it and really drive the go to market to be able to capture all the opportunities that we have out there. An area I think that will be important for Tecan going forward because it, I think, really brings it to the point what our customers are looking for. You see here the quote that I mentioned before, and just let me read it out loud. "With this system, we can perform experiments in a completely different way. It has given us the opportunity to develop and test processes that we simply couldn't do before." If we get that kind of feedback, then we've done a great job.
It's at the end, this kind of insight, where we see that being able to deliver this automation solution is really advancing what people is doing. It's freeing up their mind to think about other things, or it's freeing up their mind to take now results into account into a faster or broader way on how they're going to automate their overall instrumentations. I could now continue with 20 other slides and more around examples of where these customized solutions really created impact. It goes into all directions, from just very simple cell-based assays, from cell cultivation, from bioprocessing application, into direction of also personalized medicine applications that also require some very dedicated and specific skills around cell handling.
The cell biology capability, how does this play in the context of what you start to realize is going to become a recurring theme in the presentations today about the transition from research into diagnostics? Again, why is that capability not only a great offering for our research use customers, but why is it also working out now on the partnering side when transferring into diagnostics? I wanted to call out three examples that at the end use living organisms, use cells, use tissue that come from a research environment into a frozen solution regulated environment. Example I am calling out here is endotoxin testing. Endotoxin testing, highly critical and important to make sure when you do injections, when you have biological samples, that they are free of endotoxins.
What you see on the left side is an Evo example that comes with a standard configuration to automate this endotoxin testing. It turned into a customized solution for Lonza, the PyroTec PRO robotic solution that does automated endotoxin testing. I think at the coffee break, I was just talking about, how does this transition work, right? Do our customers come to us with, "Hey, I need something at the right," or do our customers come to us say, "I have this running in the lab. It works so great. I would like to make a frozen solution and sell it to our customers." Well, at the end, it probably both ways.
The prominent one is that somebody in the lab of this company, they established a workflow around our system and start to realize, oh, we would like to get this out in a regulated environment. That's how the overall frozen solution is being developed by the partnering team. Another example is sample prep for flow cytometry. Something that we do in the research setting quite often, where a flow cytometry system is at the back end of an Evo or a Fluent. What you see on the left side here. On the right side, you see an example of also partnering project that is now using a different modular platform. It uses the Cavro Magni Flex platform that we use in partnering now to deliver very tailored solution. It started off with an automated Evo solution to do proof of principle and see, oh, does this work?
It turned out that the customer requirements were around space. It only could have a certain footprint, where we used other elements in our instrument portfolio on the OEM side to deliver very dedicated solution. Here, the example around the PS-10 for Sysmex. Another example, which you are probably aware of, but let me share with you how the overall tissue stainer that we are selling as an OEM product to Dako came together. There was a research project on the left for a dedicated system, called GenePaint at that time, that automated actually the staining of tissues on slides. That application was the starting point to think about, if for a defined, regulated environment, what does it take or what do we need to do to develop it into a system that makes it so easy for our customers to use?
Because one of the, I think probably, let's say biggest differences between what is running on the left side and what is running on the right side of the slide is the usability. On the right side, normally non-skilled personnel is using this kind of instrumentation. It needs to be bulletproof in the sense of what can go wrong, how to fix it, and how do customers interact. Whereas on the left side, it requires an unexperienced user. I think, looking at the history of the partnering projects, I think we always supported in a very dedicated way to really transition also this interface and usability away from a highly flexible solution to an overall frozen solution. Okay. I think that was what we wanted to cover around the different cell biology applications. As I said, to quickly recap, SparkCyto, you will see it this afternoon.
It will come to market at the end of this month at the SLAS. And I hope you got an impression around the Tecan Labwerx capability. We will be very vocal about this capability going forward. It's the custom engineering, let's say, high-end capability where we're able now to address workflows that others just can't do. Good. What we're talking about now is protein analysis. And there are two elements to this section. We will talk about the relevance of protein analysis of mass spectrometry for Tecan. What is our position in that space? How do we see market fundamentals develop in that area? And we will have a customer presentation from Stephen Harding. He's the CEO of Binding Site.
I think unfortunately, he couldn't be here today because of some air traffic problems in London, but he will dial in via phone, and we'll have the ability for him to present and hear how we are adding value with our instrumentation for the Binding Site. Good. So protein analysis is a very kind of broad area to look into, but it has some very specific verticals that are highly relevant for us. One of them is mass spectrometry, and I will spend some time in the presentation to guide you through how does our position in mass spectrometry look like. I will give you an update on Tecan SPE, the consumables business that we acquired back in 2016, the progress that we made since then, and have also a point of view around the technology and instrument portfolio for this area. So mass spec, right?
Let's start off again with a view around the market. It's an attractive place to be, right? You see market fundamentals are positive, mid to high single-digit growth. The sample prep in mass spec is also high single-digit growing segment. And I was just reading this morning the summary of the ASMS conference, I think that was the American Society for Mass Spectrometry that is just happening right now. And I think they mentioned or confirmed some of the key trends that we're really highlighting up here. It's the high-end proteomics. So high-end proteomics means analysis of protein peptides for biologics applications, for therapeutic applications, but also for applications around QC and pharma, right? And I think another point that I think was also mentioned was the innovation around workflow. Because MS has been around for a long time, it has been for a long time an expert instrument.
You needed to have a PhD to know how to run an instrument. That has gone, right? Instruments are now much more accessible to unskilled people. With the combination of required higher throughput, there is now really a large population of users looking at, "Oh, wow, this is my workflow. How can I start to optimize that? I did everything manual. I was taking the tubes out, putting them into centrifuge. There must be a better way to do that." It's what people right now think about, right? I think it perfectly captures the trend that we see, how Tecan, with its instrumentation, can add value to this. Let's look into that. Mass spec, what we wanted to call out here is one area in parallel to other verticals where we provide solutions. We will focus on mass spec.
I will spend less time on the other ones, but just calling out the protein purification and the bioprocessing. This is an area where we have a leading position in the development of the best kind of purification conditions around biologics. Crystallography, the automation of these processes that require high throughput and high number of samples to find conditions that give you the structural information around proteins or just the protein detection and analysis, leveraging our detection capabilities around measuring absorbance, measuring fluorescence of protein-protein interactions. What I will talk about is mostly our offering around LC-MS and the progress that we have made on the Tecan SP side. MS sample prep, right? Similar to the NGS workflow that I showed before, there is an area where we need to focus down and prioritize. It's one typical workflow in the industry.
You start with the sample, you come with the sample collection and sample preparation. It goes through a chromatography system, then on a mass spec, and then data handling and analysis. All the area around mass spectrometry, the chromatography, and the data handling and analysis is already incredibly well-covered by key players out there in the market. I think that's not the area where we think we can add value. The focus area is really building on what I just mentioned before. Now the workflow optimization, the handling of higher throughput of samples, and the fact that the democratization of mass spec is happening and less skilled people want to use this instrument. It's around the sample preparation and logistics, the extraction, where we have a great portfolio with our Tecan SP product, and the automation and the preparation of the samples.
I don't know how many of you have been in a mass spec lab, but if you see how samples are prepared and how they are funneled into the overall MS systems, it looks like a molecular biology lab probably 10, 15 years ago. The need now to automate and take care for the higher throughput that is required is a key trend that we see across those labs. That's one of the reasons why we say extraction sample prep logistics with the capability of understanding workflows and having the automation equipment is why we want to focus on it. What kind of products do we have in this space? It's the automation solutions that can do SPE, LLE, dilute- and- shoot. For the ones not familiar with all the acronyms, those are different ways how to purify proteins. That's something we do with our existing instrumentation.
We have benchtop instruments. Those were instruments that we acquired in 2016 through our acquisition and continue to develop. What you see in the middle, the Resolvex A200, is the next generation instrument that we just launched last year out of that. We have the consumables portfolio around the chromatography applications. We have modular systems, and those are systems that are being used by our partnering team to provide now dedicated automation solutions. We have components that we sell into the space, components that go to other mass spec providers, and also great software tools that Joy mentioned, Introspect being one of them. We now started with a suite of software and tools to connect our instrumentation with the user, to connect the Spark, to connect the Fluent, so that you can have a walk-away solution.
You can sit in a cafeteria, at home, or at your desk and always know that if you don't get a message from your phone, your experiment is probably doing what it should be doing. On the Tecan SP side, it is mostly driven around solid phase extraction protocols that you see summarized up here. The liquid-liquid and dilute and shoot is an area that we cover with our automation systems. I talked about this already a little bit. The product portfolio that we got out of Tecan SP, I think, was on the left around the columns. In the meantime, we were able to also launch the NBE columns, the Narrow Bore Extraction columns, which again deliver an advantage in the overall workflow.
We launched the A200, which is a positive pressure instrument. I know it sounds very simple, positive pressure, but it has some very unique capability. It is the only instrument out there that is able to deliver constant pressure on each well of a 96-well plate.
If you push a liquid through and one has 5 mL and the other one has 1 mL, no matter if the 1 mL has gone through already, the 5 mL still gets exactly the same pressure to put that liquid through, which is very important to get consistency around different results. The example we call up here, we picked one of the many, the phosphoproteomics workflow, where the ability now to automate this positive pressure in a 96-well is, again, driving productivity and enabling experiments that before would have taken days or people wouldn't have done it, because the number of samples that have come out of it would have been just too high. I don't want to go into details, but at the end, the workflow works that you need to start off with a purification.
You have a process to create fractions of one sample that has different information in there. Then you need to use these different samples and put them again through a purification step before you can put them on an overall mass spec instrument. If you start with 96 on the left and each sample gives then 20 other samples that then need to go through again, you can easily make a calculation what kind of effort it would take if you do it the traditional way, where you take one chromatography column out, you centrifuge it, you put it back again, and do all of that manually. Coming back to Tecan SP, I think what we wanted to call out is, I think some of the progress that we made since acquisition in 2016. Clearly the geographic expansion that we were planning to go after.
When we acquired Tecan SP, they were only present in North America. We now have a direct presence in Europe, Asia, in our direct markets. We kind of launched the A200, which is, as Inka mentioned, getting great traction in the market. I think are very happy with the performance that we have seen so far around this product. It took us probably more time than we expected, but it was very important to us to upgrade the organization to the Tecan standards around quality and how we run operations. We implemented lean manufacturing at the site because we have a high volume of consumables that are produced and upgraded also the quality system.
We now have a great footprint with Tecan SP, so that we're able to get columns in amazing quality and are able to deliver at customer request within 24 hours after receiving the note. Coming back to, again, the theme of transfer from research into OEM. The example that we wanted to call out today is I think one of our customers that is going to present, I will hand over to Achim to introduce the customer and get the presentation.
Yes. Thank you very much, Klaus. It's my absolute pleasure to introduce to you Stephen Harding from The Binding Site. Stephen, as Klaus said, unfortunately could not be here. He tried very hard last night to fly from Atlanta via the U.K. into Switzerland, but unfortunately, due to thunderstorms, he was stuck in Atlanta and just arrived in London. We're very grateful that he agreed to dial in. He's on the phone, you will see the presentation in the background, he will speak to it via the phone, he will afterwards also be available for a few questions. I'm very happy and grateful to Stephen that he took all the efforts to be with us today, although kind of a bit remote, maybe that's kind of also a great example of modern times and digital connections.
Without further ado, I just want to introduce Stephen to you personally. Stephen is the Chief Scientific Officer at The Binding Site Group, a leading specialist provider that aims to improve the diagnostics and management of blood cancers and immune system disorders. Stephen has supported over 70 successful FDA submissions, 70, and was the author and co-author of more than 50 peer-reviewed papers. As he was a key driver behind the development of a next-generation assay based on mass spectrometry for the quantitation and typing of immunoglobulins. I'm very excited that Stephen will talk about this topic here at our Capital Markets Day. Please welcome Stephen remotely, and Stephen, the floor is yours. You're up.
Thank you. Thank you very much, Achim, and apologies I'm not able to be there in person. Unfortunately, the weather gods fought against us yesterday. Today, I would like to present what we think and consider to be the future of monoclonal gammopathy patient management. The monoclonal gammopathies is an umbrella term for a series of disorders that range from the very common, around about 3% of the population over the age of 50 have a disorder called monoclonal gammopathy of undetermined significance, to the thankfully less common, but unfortunately still uncurable, multiple myeloma. The Binding Site started as a spin-out company from the University of Birmingham. Our ethos then and our ethos now is that highly specific antibodies can be used to excellent effect to diagnose, monitor, and aid in treatment decisions in the clinical laboratory space. Our area is quite niche.
We specialize in immunology-based disorders, the blood cancers, as we mentioned, but also the vaccine responses and assessments of your immunoglobulin subclasses. Because we are a spin-out of the university, if we could move to slide two, please. Because we are a spin-out of the university, we believe that we're able to be somewhat agile in meeting customer needs and expectations, and also have a very good relationship with customers, such that we're able to take their innovative research and development ideas and transfer them and transform them into routine clinical assays. If we could move forward to slide three, please. One of the other aspects that The Binding Site is absolutely committed to is to publish scientific research without any limitations on our collaborators.
This, the graph that we can see here, are the number of publications that use our Freelite or Hevylite assays that have been started back in 1999, and as you can see, now number nearly 4,000. We're committed to publications because this is how scientists review and talk to one another. We are able to show that the work is being done to a very high standard because it's been peer-reviewed, it's been assessed, and it's been published in journals. We publish not only in journal format, but also at meetings. The technology I'm going to describe to you today on mass spectrometry technology, was awarded three prestigious poster awards at last year's American Association for Clinical Chemistry. One of the comments that was made is that this was a first step to truly meeting an unmet need in patients with these disorders.
Let's describe these disorders in a little more detail. If we move to slide four, please. The evolution of multiple myeloma is well understood. It starts with a benign disorder called monoclonal gammopathy of undetermined significance, or MGUS. It proceeds through a smoldering or latent stages called smoldering multiple myeloma, and finally into the pathological form of the disease as multiple myeloma. Because this is a systemic disease, the tumor burden is often huge by the time the patients are diagnosed, and greater than 10 to the 12 cells are present in the patient. To try and put that into a terminology that's a little easier to understand, this would be the equivalent of two Quarter Pounder hamburgers. A huge tumor burden on these patients.
This disorder, if we move to slide five, please, produces the perfect biomarker, that is that because this is a disorder of plasma cells, plasma cells produce antibodies, and these are very well characterized and understood proteins. These antibodies, when they're produced by these plasma cells, when they're produced by the tumor, are singularly specific. This slide here, where we have our magnifying glass, is showing you an intact immunoglobulin. This intact immunoglobulin is made up of two heavy chains, they are the light blue chains, and two light chains, and they are the pink chains. We can characterize these immunoglobulins as G, A, M, kappa, lambda, D and E, of course, rarely. When we characterize these, we can use them to monitor patients with multiple myeloma. If we move to slide six, please.
Thankfully, whilst remaining incurable, the outlook for patients with multiple myeloma is becoming increasingly better, or rather, is improving. What we can see in this slide is a survival probability graph where we have age-matched controls from the years 2010-2012, 2008, 2009, 2006, 2007, et cetera. You can see that patients with multiple myeloma on a year-by-year basis are having an improvement in their survival probability. This improvement in their survival probability is down to the introduction of monoclonal antibody therapeutics into this disease space. The novel antibody therapeutics such as daratumumab and elotuzumab have really improved the patient outlook. If we move to slide seven, please. Whilst the drugs that are being used to treat these patients have improved on a year-on-year basis, in actual fact, the tools which we use to monitor these patients have had little improvement since the 1990s.
The most commonly used tool for monitoring patients with monoclonal gammopathies is protein electrophoresis, the leaders in this area are both Sebia and Helena. Protein electrophoresis started in the clinical laboratory space in a paper form. It moved in the 1970s to a flat bed gel electrophoresis form, this is the most commonly performed electrophoresis in the world. In the 1990s, with the introduction of a liquid phase, we moved to capillary zone electrophoresis. However, since the 1990s, there's been little innovation, this is still the tool that we are using to monitor and assess response in these patients. If we move to slide eight, please. These tools are insensitive.
One of the reasons why patients have such huge tumor burden is because the sensitivity of the electrophoresis gel requires around about a gram to three grams of protein before it can be detected as abnormal on these systems. There are two forms of electrophoresis. One is called serum protein electrophoresis. This is SPE. The other is called immunofixation protein electrophoresis. This is called IFE. Serum protein electrophoresis is a quantitative assessment that has a limited sensitivity of somewhere around about 1,000 milligrams or one gram per liter, and below 10,000 milligrams or 10 grams per liter is very poorly reproducible with often CVs greater than 30%. Because this technology does not separate the immunoglobulin from the other serum proteins, the proteins can co-migrate and can mask one another.
This means that this technology is a highly skilled technology and requires many years of experience to look at all of the nuances that these gels can offer in patients with a variety of different clinical disorders. Immunofixation is somewhat easier to interpret. Here, we stain the electrophoresis gels with antibodies raised against IgG, IgA, IgM, kappa or lambda. When we have a coalescence of the stain, and you can see on the gel the clear stain against the G lane and against the lambda stain, then we can describe these patients as having an IgG lambda paraprotein. The assay is relatively sensitive. It can detect around about 100 milligrams of protein, but it's a binary decision.
It's a positive presence or negative absence, therefore cannot be used to monitor patients to give any understanding of whether the disease is responding to therapy, but rather it's either absent or present. If we move to slide nine, please. There are other methods of monitoring patients with multiple myeloma and monoclonal gammopathies. These include flow cytometry and next-gen sequencing and next-gen flow. You can see in this slide that the methods that are used describe different responses of the patient. Electrophoresis can be used to describe a very good partial response. This is called VGPR. The serum free light chain assay, which is the assay that The Binding Site produce, can be used to describe a stringent complete response, so a little further, a little more sensitive. Flow cytometry and next-gen sequencing can be used to describe minimal residual disease.
However, both of these technologies rely on bone marrow biopsies, patients who are not willing to have this done routinely, this is often done only twice in the disease journey, once at presentation and the second time at maximum response. This means there is a big gap and an unmet need here, because we know that the patients can become negative by these current serum investigations, we know that we have tools that we can use to look into the bone marrow. Between these two tests, there is a huge gray area where physicians have not got any ability to assess whether treatment is working or whether the patient is relapsing.
If you can imagine with a patient who's been biopsied and achieved a complete response and has no disease, the idea that they would go back into the clinic and be biopsied every month or every three months to look for the return of the disease is simply unthinkable. With colleagues from the Mayo Clinic, if we could move to slide 10, please. Colleagues from the Mayo Clinic realized that because each immunoglobulin is individual, this would offer an opportunity to assess the immunoglobulins from patients using mass spectrometry. The paradigm is remarkably simple. Every plasma cell produces a unique immunoglobulin. We have around 10 to the 11 different circulating immunoglobulins in a healthy human being.
These unique light chains and heavy chains can be visualized on a mass spectrometer, more, they can be visualized on a MALDI system, and these MALDI systems are already in the clinical laboratory space. If we look to the far right, we can understand that the mass of the immunoglobulin can give an indication of clonality, the intensity of which that mass is seen can give you an indication of clonal abundance. On the bottom left of the screen, you have what is a normal distribution of immunoglobulin light chains that have been precipitated from an IgG bead. We have both lambda, which is signified by the lambda symbol in green, and kappa, which is signified by the kappa symbol in red. This is normal. They are Gaussianly distributed.
There's no evidence of any Lorentzian or pseudo-Lorentzian peaks here. By contrast, on the bottom right of the screen, we can see that whilst we have some polyclonal lambda and some polyclonal kappa, there is a clear peak, and this peak is abnormal. It's being produced above the background level of the normal immunoglobulins as a single moiety that can be identified by the mass spectrometer. The reason why this is important, if we move to slide 11, please. The reason why this is important is because whilst our current technology with electrophoresis relies on simple sort charge separation and in a one-dimensional separation, if you will, the technology that we've developed with Mayo Clinic separates by precipitation and then separates on mass and charge. This improves the resolution of the patient's immunoglobulin markedly.
However, what can be done in a research lab does not always translate into the clinical lab. One of the tasks that we set ourselves is how we transform this fantastic idea into something that can be used in routine use. If we move to slide 12, please. We realized that what we needed to do is to have a fully clinical chemistry compliant solution that would enable laboratorians to load primary tubes through to getting a multiplate in a single analytical handler. The solution that we're offering is magnetic isotype-specific beads against G, A, M, kappa, and lambda immunoglobulins, which are then loaded onto a liquid handling system, and we'll talk a little bit more about that in a moment.
All of the steps that are required to visualize the patient's immunoglobulin through from the primary tube through to the eluent from these beads and then spotted onto the multiplate are performed on a single analyzer. Then these plates are visualized on a MALDI mass spectrometer. If we move to slide 13, please. After many months of discussions and talking with many different companies, the solution that we realized was going to work the best for our customers and for our development was using a customized Fluent 780 from Tecan. The final product will be branded with a trademark for The Binding Site, but this liquid handler takes the patient's primary tube, performs all the necessary steps to incubate with the beads, remove and wash using a magnetic plate, and then spot onto a multiplate with remarkable precision. If we move to slide 14, please.
Here we can see a deck overview of the liquid handler. On the far left, we have sample and reagent racks. Everything is bar-coded on this system, so we have full traceability for patient samples. We have our stacks of disposable pipette tips and magnetic plate, and there was a great deal of innovation and discussions around this magnetic plate because we needed a very strong magnet to ensure no carryover whilst we are washing our magnetic beads. We have a customized multiplate holder. We have several troughs of buffers and matrix. A waste chute, which is in the middle of the analyzer, which means there's no waste going into the laboratory. It's all self-contained. Finally, a HydroSpeed plate washer. If we move to slide 15, please.
Working with our colleagues at Tecan, there was some customization required to make the Fluent 780 suitable for the technology that we wanted to bring to market. We have a customized reagent tube and a cage to prevent the reagents being removed once the run has started. We have a customized patient sample rack and, again, a cage to prevent sample patient removal. This is all aimed towards a clinical laboratory space, so we can't have patient samples being moved from one area to another. The multiplate holder was an entirely unique design to hold the multiplates from the Shimadzu providers. The buffer trough, which is required to hold the matrix, which helps the ionization of the proteins, was designed so that we didn't get any evaporation. If we move to slide 16, please.
The other thing that we needed is we needed a fully compliant barcode reader on every single component, including the patient samples through to the multiplates and also the buffers in the troughs and in the reagents. The system was modified, and we had a great deal of engagement with Tecan in order to provide the final prototypes for us. The question now, of course, is did these prototypes help achieve some of our goals, i.e., improving the precision of the patient's analysis? Excuse me, somebody's just passing. If we move to slide 17, here we see the performance of the Tecan system for spotting a group of patient samples out. We have a number of normal patients, and we've spotted out the immunoglobulins that have been precipitated from the IgG bead. We can see IgG lambda light chains and IgG kappa light chains.
The area to focus our attention is to look at the ratio of the kappa to lambda, which gives you a CV of 3.77. This is the reproducibility of the spot. This slide shows the precision of the spotting of the instrument at around 3.77, which is more than acceptable in the clinical laboratory space. Generally, we look for precision of less than 10%. We were able to show that the modifications were able to take a primary tube through to a multi-plate and spot out with highly accurate precision. If we move to slide 18, please. The other aspect that, of course, we needed to show was that using a fully automated system, we had maintained the advantages or the innovations that Mayo Clinic had published upon.
We look at the sensitivity of this assay using limited detection and limited quantitation. Serum protein electrophoresis, as discussed in the previous slide, has a sensitivity of around 1,000 milligrams per liter for detection, and around about 3,000 milligrams per liter for quantitation. With our fully automated system, from the Fluent through to the multi system, the sensitivity of this assay is around about 1 milligram per liter for detection, so 1,000 fold more sensitive than serum protein electrophoresis, and between 8 and 20 milligrams per liter for quantitation. Again, many, many fold more sensitive. The assay is in verification now, and how we think about this is moving to slide 19. We started with solids and paper and gel electrophoresis. We moved to liquid, naturally, we should evolve to gas. This is really bringing gas phase electrophoresis to the clinical space.
If we move to slide 20, please. The assay is in verification. We have alpha sites who are using the assay over in the U.S. The assay will be launched to the CE market with the systems and the mass spectrometer in 2021. Following a recent, very successful FDA pre-submission, we are anticipating a very smooth ride to FDA approval, and we will launch into the American market in 2021, 2022. To summarize and to move to slide 21. The discussions that we had with Tecan began in 2017 at the American Association for Clinical Chemistry. We had our first prototypes in 2018, we moved remarkably quickly. The superior engineering enabled primary tube to spotting onto the multi-plates.
This really was a step forward because the methods that had been developed at Mayo Clinic relied upon both a pre-analytical liquid handling system and then a second system to do the spotting with the same accuracy that we can do in a single system. Tecan have been remarkably good collaborative partners. We set some very high challenges with ourselves with spot-to-spot precision because we know that this precision will improve the precision in the clinical workspace. We had engaged technical and commercial teams focused on delivering our prototypes, I think that the teams will agree on both sides that these were often challenging. This is the first in a suite of assays that we'll be bringing to market. The suite of assays are going to move some of the most challenging proteins out of the ELISA and the nephelometry interferometric space and into mass spectrometry.
To make this truly useful for the clinical space, we need precision, accuracy, and reproducibility. So far, with the work that's been done, we've achieved all three of those targets. With that, I'd like to end my presentation, and apologies for the technical issues.
All right. Thank you so much, Stephen, for making yourself available. I am sure this was a very illustrative and very impressive talk. Again, thank you very much. So yeah, thanks again. Welcome back to the third presentation section. I am very pleased to welcome Dr. Wael Yared on stage. Wael is the designated Chief Technology Officer and head of research and development, and he will talk about innovation and the strength of Tecan in that very dynamic market environment that I introduced to you this morning. Wael, please. It is yours.
Good morning again, and welcome back to our audience online and to everyone here in Männedorf. My name is Wael Yared. I am the incoming Chief Technology Officer and head of global R&D at Tecan. This is my first capital markets day for Tecan, so it is a pleasure to be here.
I thought, being a newcomer to the company, I would begin with a personal perspective on what makes this a particularly exciting time in our industry and what makes Tecan very well-positioned to capitalize on these industry trends with actual concrete examples. My main thesis presented here is that we've seen an accelerated and amplifying cycle over the last 30 years, especially accelerated over the last 15 years, where basic scientific discovery in molecular biology triggers a demand for technology in detection, in sample preparation, in analysis, which provides an array of solutions to meet the needs of basic scientific research. Those in turn trigger the formulation of new discoveries, and it is a self-reinforcing cycle.
Molecular biology discovery across the entire array of biological analytes, from DNA to RNA to protein to cells to tissue, has really spurred the development of sample preparation technologies to increase the robustness, precision, repeatability and throughput of these assays. The development of detection technologies such as sequencing and mass spectrometry. Those have yielded results that again spur further discoveries and even just looking at the lower right-hand side, the cover of Nature Methods only last month, again on single-cell biology, Method of the Year five years ago, and now looking at the detection of protein and RNAs in single cells, the unit of life. Things which would've been inconceivable five years ago and yet are now becoming more and more available in labs today. I figured I would give you three specific examples.
One in the world of proteins, one in the world of genes, and one looking at the combination of two in diagnostics, where we see this cycle of self-reinforcing stimulation. I thought I would start with the world of biologics. Those are drugs that are made out of recombinant DNA. They are expressed out of living cells. I'm showing here in the upper left-hand panel, one such drug, a monoclonal antibody. There is, if you really squint closely, to the left of it, next to that yellow patch, a little speck. That is not a speck of dust. It is actually a small molecule. That's aspirin. I showed the two next to each other just to give you a sense of how big, complicated these three-dimensional structures are.
Yet you need to be able to characterize them in full if you really want them to achieve their target, the efficacy and the safety that they're meant to provide. That makes the difference. I mean really looking at every single amino acid in that giant chain, looking at its structure, its position, looking at the three-dimensional shape, looking at the post-translational modifications, looking at the glycans that attach to that molecule to basically make the difference in the clinical fate of this drug, whether it actually cures the disease or it gets metabolized in three minutes and loses efficacy, or indeed if it harms the patient. How does one look at something like this? Again, 20 years ago, this would've been inconceivable. Demand for protein characterization technology is definitely at the forefront, and you've heard a lot about mass spectrometry this morning.
Mass spectrometry is not new. It's been around for 100 years, since the early heroic days of atomic physics. Yet it's only in the '80s and '90s that it started being applied to biological analytes and small molecules. It's really only in the last 15 years that one could apply mass spectrometry to analyzing and characterizing proteins at that level of accuracy, thanks to the vastly increased resolving power, sensitivity and sophistication of the algorithms for data interpretation. That assumes also that you're able to introduce samples into the mass spectrometer in a way that basically generate efficient ions and in a way that lets the scientist interpret the data that comes out. Thanks to the development, especially over the last 15 years, we're now able to analyze these drugs with an exquisite level of detail.
The spectrum that you see here on the lower right-hand side shows a glycosylation analysis of a monoclonal antibody. It tells you which sugar is attaching to which peptide site in what amount, and that can literally make the difference between life and death. What does that mean? That means we can now have a thriving, clinically successful industry, the biologics industry, which is the most dynamic, vibrant, fast-growing segment of the drug development industry. Two years ago, this was a quarter of a trillion-dollar industry. Not only is it big because it's clinically successful, but it's also growing enormously fast.
With that growth, we now have the ability to start thinking of much more complicated molecules to go beyond straight-up monoclonal antibodies, but look at more complex drug candidates like bispecific antibodies, chimeric constructs that target multiple antigens simultaneously, or indeed antibody drug conjugates, where you take a cytotoxic payload, link it covalently via a linker to a monoclonal antibody that targets the cancer cells. Those are 4 times more complicated to analyze because you have the antibody, the linker, the cytotoxic payload, and the combination of all three, and all have to be analyzed. This again triggers another round of technology development and detection performance. We see the cyclical growth only increasing in intensity. Let me move now from the world of proteins to the world of genes and gene therapy and gene and cell therapy and personalized medicine.
Again, in the last 5-10 years, increased understanding of the molecular biology of cancer has allowed us to really characterize tumor cells and the antigens that they express, and the peptides of these antigens that they show to the outside world, in particular to the immune system. The understanding of T cell immunology now allows us to engineer these T cells so that they can go and target these tumor antigens and antigen peptides. This has triggered, again, the demand on the technology side for high throughput platforms for the isolation, enrichment, and cloning of such T cells, and has really enabled the development of the whole personalized medicine approach. From, again, scaling up the collection of patient wide blood cells, harvesting them, isolating and activating the T cells, enriching, engineering, activating, and then infusing back into patients.
This now allows the development of new paradigms of personalized medicine that, again, were not conceivable five years ago. The last two examples have been therapeutic in nature, proteins and genes. Let's look at diagnostics and a combination of proteins and genes. This is actually looking now, again, from a discovery standpoint at the improved understanding of the genetics of cancer and the discovery of new biomarkers that are associated with some solid tumor cancers. The bar graph that I'm showing in the upper left comes from a study published only last year by Johns Hopkins. This is the development of an eighth analyte liquid biopsy test, a multi-analyte blood test, basically, a so-called liquid biopsy, to detect, at an early stage, the presence of 8 different types of cancer. This is performed in combination with a detection of 1,900 mutations in the genomes of the cancer patients.
One of the issues with liquid biopsies is the sensitivity, and this test shows very excellent sensitivity. Another issue with liquid biopsy is that it's very difficult to understand from the liquid biopsy result the organ of origin where the cancer actually originated. This has triggered, again, on the technology side, the development of machine learning algorithms, and more specifically, supervised machine learning to correlate the types of protein and genomic signatures with the organ of origin of the cancer. The bar graph in the upper right shows you now the predictive accuracy of these correlations across eight different cancer types, and it is very high. It's, again, in that self-reinforcing cycle, you can envision now this being used not just for liquid biopsies, but also on tissue samples, tissue biopsies.
Multi-stain tissue samples, where again, you can do this kind of multiplex staining, multiplex analysis, predictive analytics in order to improve diagnostics and treatment. This all having been said, yes, we're in a very active, dynamic, fast-growing industry. What does it take to actually capitalize on these end markets? What skills do these end markets require? Well, clearly an understanding of the science and user workflows, an active probing in a hard-nosed manner of what the underserved needs are, state-of-the-art skills, processes, and infrastructure. I will emphasize this again, it has been mentioned before, but we have assembled a unique team here at Tecan over the last 30 years of the company's existence of very skilled engineers, scientists. A big number of our project leaders are PhD-level molecular biologists. We're working hand in hand with the scientists and engineers in research and product development.
A number of technical skills across robotics, motion control, liquid handling, software, and increasingly informatics and bioinformatics. Now more and more emphasis on development of targeted reagents for specific end applications. This is all built on a very solid foundation and infrastructure of product development discipline, quality management systems, and a regulatory infrastructure that are stellar and quite unique. This is not enough. I would argue for one more requirement, which is the ability, as Klaus had alluded to before, to very quickly, adaptively, and nimbly respond to demands from these end markets and offer solutions. In my mind, these really translate to two things. One is the ability to modularize what you're doing and develop a growing library of modules that you can configure and assemble in order to deploy new solutions.
Two, the ability to think innovatively, not only about your skill sets, but about your business engagement models. I'd like to amplify on both of these points with a couple of examples. Modularity, why do it? It's a nice word, what's the benefit? It changes the way we develop and deploy solutions. Traditionally, when we're developing a large platform, we look at what are the requirements. We go into a concept phase, then we design the hardware, we design the software, we integrate the software with the hardware, we develop the assays, we integrate the assays with the platform, et cetera. We validate the whole thing and we launch. It's fine. It has been sort of a lengthy, laborious path. We have learned an immense amount through that. It presents certain complexities in development and validation cycles.
We are capitalizing on these learnings of the last 30 years to now develop a more nimble approach of modular platform development, where we have libraries of software modules, library of hardware modules that we can configure. Once we understand the requirements to develop a new solution, we can configure the right toolbox, the right libraries, and spend more time verifying and validating as we launch our products. Products really across the entire gamut of throughput requirements and both internal Tecan products as well as partnered OEM products. What does that let you do? It lets you basically deploy solution across all of these end market applications, across all types of throughput requirements much more efficiently. Let me offer a couple of examples. One is from the world of software. We've developed and continue to develop a new software architecture called MAPlinx.
It modularizes the way we think about software, it lets us assemble layer by layer and module by module, all the requirements that are necessary for a complex assay, for example, in diagnostics or in detection. We work from the bottom layer, the instrumentation layer, using hardware abstraction layers that allows us flexibly to support multiple devices and an ever-expanding array of devices. The application layer allows us to tailor that application layer to match the functionality that is required. You don't necessarily put everything in it. You put just the right modules that you need, and you make it easy to add, replace, substitute modules as the solution evolves.
We've provisioned also at the very top for, especially our partners on the outside, the ability to provide their own custom scripts so that they can add or modify to the assays without necessarily going back into nuts and bolts coding. That makes it much easier to develop new applications. One thing that this has allowed us to do is to enable custom development, both internal and external. In particular, we've focused a fair bit of effort on developing 3D simulation tools that let us, those are full physical models of all of our automation liquid handling platforms that let us visualize exactly what the hardware would be doing once you develop and build it. Likewise, when we work with customers on the outside, they now would have the ability to develop their assays and test their assays before even the hardware is available to them.
You can imagine how much faster this becomes in terms of assay development and validation. We continually build up and expand the functionality of our own internal application layers to target the applications which we think offer a lot of growth. We've put this particular modular architecture MAPlinx to work in one of our ongoing projects. That's one of our large projects. It is on behalf of an OEM customer in the space of cancer diagnostics. It invokes the skills that we mentioned. Modularity is not only at the software level, but at the hardware level. We've modularized also the components and building blocks of some of our entry-level automation solutions. An example shown here is the Magni Flex platform.
This is based on the CS acquisition that we performed about three years ago. We've evolved the product line to now provide us with entry-level automation functionality with a base configuration and innovative modules that provide additional performance and application-specific directions. This offers basically the advantage of a flexible, configurable starting point for both internal development as well as partner development. Of course, we're doing this in full synchrony with the modular architecture, the MAPlinx architecture that I presented before. A last point now expanding on the innovative skill set leading to new business engagements, Joy from Ambry Genetics alluded to Introspect. I'd like to tell you a little bit more about Introspect and how it works.
Basically, again, the concept that Joy articulated very well is that we'd like to connect our automation solutions in a secure manner and analyze the metadata of what these workstations are doing, and how they're performing and collecting data and analyzing the data and pointing to potential business improvements out of them. Again, what Introspect allows you to do is to analyze multiple instruments regardless of location, same lab, different lab, different countries or continents, in a way that is customizable based on the users and the user requirements. Not only the configuration of custom dashboards to let you look at what you really want to see, but also managing user credentials so that you do so in a secure manner and in a way that is also secure from a cyber security point of view.
Again, the way it works, you have the liquid handling workstations in the lab that have host computers that generate log files. The log files accumulate runtime information and other stats information like labware usage and errors and so forth. These log files are parsed, and a subset of the log files is selected and uploaded to a cloud-based server using secure, encrypted mechanisms that is accessible only to the authorized users. Then on the client end, using a simple web browser, you can now look at your dashboard, you can customize your dashboard and look at the kind of information you really want to see. For example, looking at one time per day, the example that Joy showed. What are your instruments doing on any given day of the week or time of day? When is the instrument being used? What is the rate of logging errors?
What is the consumption of labware and other consumables? That effectively enables our customers to make more informed decisions about their lab operations. Again, an example of us going beyond our traditional business model and looking at new types of customer engagement and offering solutions that are rich in insight and leading us into new markets. With that, I hope I've given you a snapshot of why we're well-positioned in the markets that we serve. Those are exciting markets, and I'm personally very excited to be here. With that, I'll just wrap up my talk. Thank you.
All right. Thank you very much, Wael. I would like to continue with a topic on behalf of Ulrich Kanter. As I said, Ulrich cannot be here today because he is in California welcoming our newest member to the Tecan family, the company that we just acquired a few days ago. Let me speak about operational efficiency and where we're coming from, and why this is, of course, tremendously important in what we're doing. For me, operational efficiency, of course, is the foundation of a scaled-up business and also the growth opportunities of a company like Tecan on a global level. We, I think, made significant runway in the recent years in improving not just our supply chain, but also areas of the production processes themselves. Just to focus in a bit on the supply chain.
We've undergone significant efforts to relocate and identify best-in-class suppliers and consolidate suppliers wherever possible. I think we made very good improvements also to globally align procurement activities, which before had been more kind of site-specifically organized and sales-centered and now really are controlled and driven through a central global procurement function. As you are aware and shown on the right-hand side of this graph, we made a significant progress in material cost savings, particularly in the space and the time horizon between 2014 and 2018. It's fair to say that maybe some of the low-hanging fruits are now harvested, we're now shifting a bit more into the mode to deploy what also Wael started to illustrate, a more design to cost portfolio that will, of course, then also contribute to increased productivity and profits.
I think, we will, of course, continue the overall efforts on material cost saving, but then shifting to that portfolio switch from the modular range that I think is very important for our future capabilities of margin expansion. On the production side, you also see the graphics here. There had been a very diligent effort to streamline production lines for line flow principles in all our factories. We started here in Switzerland. Now Ulrich is running and rolling it out to the other manufacturing sites globally, and that includes, of course, obvious processes like kanban module assembly that arrive on the production lines just in time. I think also on the instrumentation production time, we made tremendous progress to reduce hours that our engineers need in order to assemble and test the systems before they leave the shop floors.
Maybe, also just to go back to some of the previous acquisitions and integrations that we've done and illustrate what we've done there. Sias was just mentioned by Wael as a foundation of our new going forward portfolio of modular platforms. As you remember, Sias was acquired and integrated starting in 2015, and this was really consolidation and cost play for us because we were picking up at a very economic price, a very capable competitor and player in the OEM space. We, in the meantime, then moved the whole operation here to the Männedorf site and emptied out their space and have not only realized synergies in R&D and operations but also now moved the portfolio from break even to profitable contribution to our overall top and bottom line.
Of course, one of the other attractions then in addition to the portfolio that we wanted to acquire was that Sias brought us very interesting and profitable clients, particularly in China and North America, in market segments and applications that Tecan was just starting to explore with the Tecan Partnering Business growth. Maybe to the latest addition and latest acquisition in the space of the operations team, and this is where we just announced the acquisition of a long-term supplier of key parts.
We have acquired a company, at the end of May, that is virtually an integration of a core supplier where we are the major stakeholder and major customer of these manufacturing site, which is divided up into one site in California, in Morgan Hill, and then also a very capable facility in Vietnam, which of course, we also look at as an opportunity to future build out our footprint in a lower cost region. For the time being, we are, of course, internalizing and benefiting from the cost benefits and, of course, aim to also enhance future our overall operational profitability with this vertical integration. Today, we talked a lot about the transition from research into the clinical diagnostic market.
I mentioned to you before that, of course, Tecan is probably most renowned for technology around laboratory automation and all the technical aspects of that market. But I would probably argue that a lot of the value proposition and why customers actually come to us and choose Tecan as a supplier is also based on a very solid foundation of regulatory and quality compliance. I just bring up this slide to mention, of course, the successful history of Tecan developing processes and compliance tools that allow us in the space between 2014 to go through 6 FDA inspections at our main manufacturing sites with zero observations. This is, in my recollection, a pretty impressive performance in terms of compliance and the track record of going through such FDA inspections.
Then in addition, we also completed the MDSAP certifications for our production sites in Hamburg and here in Männedorf, and we will continue that program now into other sites as we speak. Why is that really critical? It's, of course, for us, reassuring manifestation to have the FDA really subscribe that we are fully compliant and are very happy with our processes and our performance. As I said before, for us, we, of course, use it very proactively in approaching customers or also working, particularly in the Partnering side with clients that probably have less proficiency in these type of regulations and processes and consult with them on their best development and submission processes around 510(k) and PMA applications. We, of course, are using that to transition also clients from research into diagnostics, so not just on the diagnostic side.
We use, of course, this expertise as well to produce in our own hands medically Class I ready instrumentation like Klaus mentioned, the Fluent being registered in North America as a Class I medical device. It's a very important backbone and very important activity throughout the company, and it's probably also fair to say that with more than 80 professionals in that division and overall entity, we are very well equipped to also incorporate future acquisitions and apply to them the same rigidity and process control that we have done to the other sides of Tecan. In the next section, I just wanted to give you an update on where we stand with the Partnering division.
Listen, we heard a lot about the research and some of the translational efforts that we have successfully undertaken between the research entity and the OEM side, maybe just specifically on the partnering business. Again, for me, that is a very critical element of the existence and the value of Tecan, being able to work with leading IVD companies or aspiring IVD companies to produce sample-to-answer machines that address the most desired and needed gaps in today's clinical diagnostic settings. This speaks to the business model that we entertain in the Partnering Group. We basically have three different models of engagement. What we commercialize under the Tecan Cavro brand are components and sub-modules that our clients use for their own development programs.
We move on to supply and use some of these modules in our own development processes. As Klaus illustrated in various examples, using existing Tecan platforms or modifications thereof to convert a customer solution from a research environment into the clinical space with the shortest amount of time possible, leveraging application and regulatory know-how and backbone of these platforms. Lastly, we are of course, also engaging, and you know some of the examples already with accounts and clients like Ortho Clinical and Dako, where we really develop systems from scratch to bespoke solutions that are fully optimized on cost, performance, and other factors that our clients desire. In the Cavro part of the business, which is a very solidly growing part of our franchise, we are supplying pumps, valves, and enabling modules to the workflows that we're interested in.
We are offering, of course, every component that is quality assured and application tested before it is launched. We offer quite a bit of flexibility and also the compliance schemes around the documentation effort and testing efforts that are required to use our modules and subsystems in the regulated environments. In addition, we have a very capable technical support team that remotely and on-site facilitates the successful integration of these sub-building blocks into the solutions that our customers are developing. We are, of course, very proud, and we have a very broad track record, and this is probably the space where in the partnering side, we're working with literally hundreds of clients on various levels of integration, some of which buy a few products, some of them buy thousands of them.
This has also been the area where in the last years we've very successfully expanded our business into Asia and particularly into China, where we're now working increasingly also with Chinese domestic companies that use our components and modules for their own development efforts and programs. I'm very happy and proud also to announce the rebranding and probably for the first time branding of what I mentioned before, the system development part of the partnering business franchise. Before we said we are converting platforms or we're developing these bespoke systems. We thought we'd give it a bit more of a catchy and illustrative name. We decided on Synergens, which really means to bring together the synergistic partnership and the excellence in applications, in compliance, and workflows that we bring to these type of joint efforts.
We have a core offering where we go out and design and concept with our clients their desired instrumentation. We bring a lot of innovative principles and IP into these discussions. Of course, we're also able to incorporate IP and capabilities that our partners bring into this discussion. We, of course, offer in the industrialization phase a very capable team and support to shorten the clinical evaluation time as much as possible, and then later when we move into the manufacturing space, we are, of course, an accredited and very capable and scalable player to upscale production for our partners, literally from a few beta test units that we typically develop in the R&D phase to hundreds of units in full commercialization range. We also started to expand the offerings in the partnering business space.
In addition to design, industrialize, and manufacture the systems, we are also now adding enhanced lifecycle management products, where on behalf of our clients, we take more and more control over the third line defense or third line technical support. We added also total service packages. For the first time, starting three years ago, we started to offer field installation and repair services for partners on behalf of our partners. We could very credibly do so because we have a very large infrastructure of service engineers that are clinically trained on the life sciences side of the business. Globally, we have an exceptionally capable infrastructure of service people that can be deployed in the partnering world for those clients that desire maybe an upscale or an accelerated growth path in the regions where they've not yet been able to invest in service personnel.
The other part of the venture that we're just starting with one high volume client is an instrument refurbishment program that allows our client to, after the period of reagent rentals, then reuse these instruments in lower, I would say, throughput environments in a very economic fashion. Looking at the overall pipeline and the progress that we are making, particularly on the system development side, it's fair to say that today, we look at the richest and largest pipeline in the development programs with more than 25 projects under discussion in the concept phase. This is typically where we engage with our concepting and R&D groups and application scientists to discuss feasibility concepts and decide if or if not the partnership is a match for both ventures.
We have, I think, most engagements right now, and there's probably not a surprise given the themes today in the molecular diagnostic space. That is probably our most expensive area right now. There are quite significant others also in immunodiagnostic and other spaces. We have, like I said before, for the component side, also in the system development side, we have made very good inroads into Asia and particularly in China. Klaus already mentioned one of the accounts that we work with very successfully, which is Sansure Biotech, one of the leading infectious disease molecular diagnostic companies. There's quite a few more in that concept and discussion pipeline as well.
Moving into this category that is highlighted under development, this is the category where we quantify it as more than five programs where we actively work on a development program, and we have signed a development contract with these clients. This, again, is a variation of projects that are ranging from simple platform freeze projects to, I would say, substantial, larger development projects like the one that Wael just mentioned in the space of cancer diagnostics. I think in my view, a pretty good variety of smaller, faster to market projects that in our nomenclature may contribute maybe single-digit millions as at the peak time, and then a subset of these projects with the potential of delivering double-digit million at the peak growth in this type of category.
Of course, you see in the instrument ramping up and the regular supply phase, when I look back, couple of years ago, this number was probably five or six. Now we're talking about 35 existing supplier relationships, again, with a very good distribution of mature businesses and interactions and collaborations still in the starting up phase. I would still classify relationships and market opportunities around transfusion medicine with Ortho Clinical in the growth phase, as well as the Dako Omnis systems for Agilent. There's also various others mentioned here like Singulex and Mobidiag and Inova, which are kind of more platform modifications, but are also still seeing quite significant growth opportunities.
With this, I probably wanted to shift gears a little bit, I think we've talked a lot today about technology and impact and what Tecan is doing in the market space in research and the translation into clinical diagnostics. I also wanted to talk about maybe the culture and the ambition and the drive that you will see in Tecan and one of the reasons why I stand here in front of you being very excited about the opportunity to head up this exciting business and exciting teams, not just in the management team, but around the world with these 1,800 colleagues that are absolutely subscribing to that understanding and the purpose that we as a company are in a unique position to help to better understand, to better diagnose, and to better treat patients.
I come from cancer research. I worked for a few years in that market, and I take tremendous pride in this notion, which for me is not kind of a marketing statement, but as you heard from my colleagues, but also more importantly from Joy and from Stephen, it is happening right now, and we have a tremendous opportunity in front of us to capture and participate in this exciting journey. I showed you this slide. My colleague showed you this slide over and over again.
Again, this is, of course, what we also internally use to explain to our employees the purpose of the company and why we get out of the bed in the morning, why we work extra hours, and why we really work very hard to connect very closely to our clients and customers to understand how we can improve, how we can further develop capabilities, our attention, our scientific excellence, but also our products and tools going forward. I think you've seen a lot of examples of this today. Another area, of course, that is very close to us and also to me very personally is our responsibility from a social and economic environment.
We are very proud when we look at the charter of the UN Sustainable Development Goals, that we are very prominently supporting the SDG 3, which speaks about the health and the wellbeing of the population on a global scale. I believe Tecan has a very credible play in this venture and this charter of the United Nations. Then lastly, what I want to talk about is culture. We've started as a company. You've probably seen a little bit, some of those that have been in this facility before may have noticed the difference. Anyone that has been here before that kind of walk into this and say, "Oh, this looks a little bit different"? All right. Believe me, this is not a paint job.
Here it is maybe a paint job. What I think we do in the company is also to very clearly communicate our expectations, my expectations, my colleagues' expectations around the value and the communication and the behaviors that we want to see and drive within this company in order to be a leading company in that space. You see on the wall this notion, every lab, every day empowered. This is our statement that we give to the outside world. We are truly fueling the empowerment of academic clients, of pharmaceutical clients, and of diagnostic clients in that venture. We created what you see behind me, what we call the Tecan brand house.
The Tecan Brand House is just an illustration and characterization of the core values and the differentiators, our positioning, our customer promise, which is always there for you, and the external impression, Empower with Tecan, built on a very solid foundation of expectations and values around trust, high standards, and ambition. This is, if you would be cynical saying, "Okay, this is a very nice slide, what do you do about it?" What we do, we go out and we talk to everyone in this company about expectations on communication, on behavior, that we want to see people being courageous, curious, we want them being respectful, but lastly, very importantly, I think we want them to be very and brutally honest. I think in that context, we are driving and I hope we're driving towards a very productive and engaging company culture.
I think I stand here and say we've come a long way in this, and of course, for me, that is a very integral part in addition to all the technologies and techniques that we discussed, allowing us to really play in the forefront of this market. This brings me to the financial outlook. You heard a lot about the market environments and the market conditions I described to you, particularly the kind of size and the underlying CAGRs of our market segments that we're serving with life sciences and laboratory and clinical diagnostics. Again, I just wanted to reiterate our ambition and our, I think, very credible path to organically outgrow the market average, and of course then adding selectively M&A with that market development and the capabilities that we look at today.
I think some of the drivers that have been explained and described to you, I hope resonated in terms of our focus on key growth applications that give us that additional fuel and boost in areas like advanced genomics, cell biology, and proteomics and mass spectrometry. We are, of course, expanding our solutions with dedicated systems, but even more and equally important, the consumables and reagents space. We are putting an increased focus on service and after-sales, and those who've not met our new colleague, Petra Popp, she's now heading the efforts to professionalize everything that we have already done really well in service and after-sales and bring that to the next level of productivity and profitability. We continue to expand regionally.
China, as I mentioned before, we are already 110 employees today, but we see China, again, is just at the starting point of really moving ahead in terms of life sciences research and the healthcare and clinical diagnostic systems that they're installing in their hospital scene, but also in their universities and clinical research laboratories. Of course, we will look and we, as you are aware, we have a very healthy balance sheet. We continue to drive the M&A pipeline very focused and with as much speed as possible through Erik Norström and his team and of course the whole engagement of the management team. In addition, we of course improve our bottom line and the profitability.
This, of course, as you know, Tecan being pretty, I would say, efficient on the CapEx deployment, pretty much is driven by top-line growth or this is probably our largest lever today that we have. Of course, the ambition and the plans that you've seen outlined by myself and Klaus in particularly to grow the recurring revenues, which are now at 42%. I think we have a good line of sight that they can improve and grow further as a contribution to both top line and profitability. Of course, as you've seen from Wael, we continue to improve our efficiency in R&D, getting faster, getting even more reliable in this development process, delivering systems on a modular range of products rather than looking at monolithic development programs. Lastly, of course, focusing on increased operational efficiency.
I mentioned before that we continue our efforts on material cost savings, and particularly with now the first integration of a key supplier, I think we see, of course, great opportunities to now leverage that supplier in the optimization of material cost and other aspects of that piece. Lastly, confirming the financial outlook. You've seen this communication before. We are confirming the guidance on mid-single digit to high single-digit growth in local currencies for 2019. Of course, this is now backed by the recent acquisition of the supplier that I just mentioned that adds sales in the low to mid-single digit million CHF amount in 2019. Again, additional acquisitions are not taken into account in this guidance. On the EBTR side, we are guiding at an EBTR margin improvement to around 19%.
This, of course, includes the integration costs and shorter-term lower margins that we already communicated at the point of acquisition of NuGen Technologies in the range of high single-digit million CHF amount in 2019. This, of course, is offset to a large extent by the IFRS 16. That has been, of course, a recurring contribution now to the profitability, but will be applied for the first time for the full year of 2019. With this, in aggregate, we are confirming that guidance of an EBTR margin at around 19%. With this, I thank you very much for your attention. I know it's been probably a bit of a speed dating experience for you. I'm sure you've learned something, and I hope that also this afternoon, most of you are available for live demonstrations and the hands-on experiences that we prepared for you.
For those that are not able to stay on until this afternoon, thank you very much for attending. I, of course, would like to thank everyone that looked at us and at this webcast remotely for their time and attendance. With this, I'm very happy to move to the Q&A session. Please fire away any questions that you may have, and myself and my colleagues will be here to answer as good as possible. Maja.
Thank you very much. I have two questions. I would like to start with a potential margin expansion. It is great that you give us the drivers of further EBITDA profitability improvement. Is there a range you could tack to add to this? If nothing changes, no acquisitions, would it be 50-100 basis points? Are long-term margins potentially above 20%-23%? It just feels that while on the sales side, the visibility is quite good-
on margin progression medium term, there is a big question mark. The second question is regarding acquisitions. Can you help us think about the way you're going to spend your money? Shall we see smaller acquisitions, integrating suppliers, driving margins up? Are you still looking for a meaningful, larger acquisition which could add additional business to your company?
Are you actually, at what point in time are you considering returning cash to shareholders? Thank you.
All right. Thank you very much for the questions. On the margin side, I'm afraid I'm not really aiming at giving you more granularity on what we're targeting right now. I think, we're very, I would say, comfortable and confident around the kind of 19% EBTR margin perspective that we are giving you. Of course, there is still underlying pieces that we are managing right now, including the NuGen acquisition and the expenses for the integration costs. I think for me, the 19% is the best guidance and maybe granularity that we can give you at this moment in time. I don't know if there's any other details that you would like to discuss. I think right now, based on the progress that we're making, feel pretty good about the 19%.
On the M&A side, of course, that is probably the most active discussion right now. I'm standing here to say that when I came in on April 1st, the good news is that, of course, the M&A pipeline was part of that development process, which was a very broad engagement of the management board driving that M&A pipeline. We're not resetting anything. We're not saying, "Oh, we have to restart this whole process." We still look at a very healthy M&A pipeline, both from smaller bolt-on acquisitions. To your question, of course, we are able to deploy several hundreds of millions against a more sizable and maybe a bit more transformational target. We have also assets in that list of targets today. We are in very engaging discussions.
In this case, as you may appreciate, most of these targets are in the ownership of private equity, sometimes the timing of them is a little bit out of our control. We have a very good view on what we would want. This is, of course, based on the three areas or evaluation glasses that we're looking through. One is the strategic fit of a company to all the things that we outlined to you today. Second, of course, are the financial parameters. Thirdly, this is an area we recently have walked away from opportunities, where we are looking very diligently at the regulatory and process compliance of the assets that we're interested in.
If we can't get comfortable with that regulatory or compliance framework, even with, I would say, nominally positive financial outlook, we would walk away from such an asset because I think we would not be willing, or I would not be willing to invest the time and money and also the risk of an FDA warning letter to bring such an asset into the Tecan framework. I'm just confirming that we have a very solid and very good pipeline, and I can assure you that Erik and the whole management team is very engaged in driving forward this M&A pipeline. To your point of alternative means to return profits to our shareholders, of course, as you can imagine, this is a very ongoing and regular engagement with our board of directors to exactly evaluate when is that point, where we have to think about alternative models.
Of course, we are talking to as many investors as we can, and I'm just back from the last roadshow at Interlaken. Of course, we also have these dialogues around are we sure enough that we can profitably invest in M&A, which in my nomenclature would still be my absolute preferred way of leveraging these profits. If at one point, we would probably even generate and accumulate more cash, then this discussion becomes more active.
Thank you. It's Chris Gretler Credit Suisse. I have two questions. The first with respect to the change in management. Could you elaborate now what your priorities are in any way different from David's now previously and what you expect to make different in this company? That would be my first question.
Yeah, of course. That's probably question that I get every time that I move into a kind of meeting with investors and analysts. What's new? What are you changing the company upside down? What's to expect? The good and the bad news is I'm with the company now five and a half years, and I probably plead guilty for a lot of the advancements and progress and things that we've done over this period of time. Of course, the way we manage and run the company is a very integrated management board decision and discussion, entity and forum. When I remember back when I joined the company in 2013, the company was in an entirely different state.
This was more, we went into really bring three major projects to market where if we would've not done this in terms of improving the processes, the kind of marketability and the success of these projects, we probably wouldn't have this discussion today about M&A and expansion and where do you invest your profits. Over the last five years, like I tried to illustrate, I think we made tremendous improvements, structural improvements, to stabilize and improve and really upscale operations, R&D processes, sales, commercial processes. I'm coming in now on April 1st this year with an entirely different, I would say, opportunity, which is less inward autistically looking at fixing the assets of the company and then commercializing the process of the outside world.
My focus is now innovation, M&A, of course, expanding the business and accelerating the growth along the market opportunities that we try to outline today. My conviction and my view is that if we really understand the market environments like the genomic, the proteomic, and the [cell and tissue analysis] workflows to the best extent, we have excellent amplification machine within Tecan, both from an operational and also commercial standpoint, to now really drive growth forward. That's my ambition, and that's I think what you probably heard a little bit in the kind of presentations today. We didn't talk too much about the products, we really tried to illustrate how we see our capabilities as a solution provider fit into that space of academic, clinical research, pharmaceutical research and production, and the diagnostics environment.
For me, it's probably a more application-centric, holistic discussion than necessarily always honing back into products like Fluent and others, which are, of course, great capable enablers, but they are not the center of our thinking around this kind of expansion of the solution space.
Okay. That's actually very interesting because my second question related to the Fluent platform. I was just wondering, it's now I think now five year on the market. How do you think about actually the life cycle of that product? If I remember right, the EVO, Freedom EVO was-
Yes
About 10 years on the market or so.
Now is basically this cycle accelerating and you basically, I think are already with the Gx around about the last innings now of the opportunities that you can address. Is there kind of a shorter cycle?
Would you expect kind of there some new innovation coming up?
Great question. I would probably like to take you back to some of the comments that Wael made in terms of our increased efforts and successes to driving modularization of our portfolio. The way I think about Fluent is more, I would say in manifestation of very capable modules that are assembled to happen to be a Fluent. I think what we've done, and probably less visible to the outside world, is that in the meantime, we have to put a lot of work and effort in to modularize the software and the underlying hardware in a way that even if there would be new workflow requirements coming in the next years, we, without touching a monolithic development architecture, we are able to add different modules, different capabilities, different softwares to a similar frame or other frames.
It's probably fair to say that this kind of innovation cycle will continue, but it does not require us in such an extent to really push the stop button on one platform like the EVO or from a development standpoint, enter into a kind of whole new way of kind of creating the next big monolithic infrastructure. I think you will see a cadence of solutions coming to market going forward that may or may not look like Fluent, but leverage a lot of the hardware and software capabilities and the modularity of that platform in other ways and forms and product names.
Thank you
answered your question.
You have impressed us by the speed and complexity of the world you are in, and it's accelerating in this respect. Can we assume that
Is it a wrong assumption that the R&D expenditure, especially the D in % of sales, is increasing?
Actually, I don't think that is necessarily the conclusion. Again, I would probably rewind back to some of the elements that we try to illustrate here right now in terms of the approach that we're taking to modularize and become more efficient and nimble in the R&D processes. I'm convinced that we can do a lot more in terms of our capabilities and the engineering framework in terms of speed, efficiency, and leveraging a modular portfolio with what we have today. It just become more productive from an R&D efficiency standpoint. I think there are, of course, opportunities where we're looking at, if we identify a major market opportunity, we may decide on a business case to invest in that opportunity ahead of time. That is, I think, an ongoing process that we do in our business strategy planning cycles every year.
I probably wouldn't expect a big modulation on the R&D spend. I think we've come a long way in trimming down the spend, not so much from a capability standpoint, but far more from an efficiency standpoint. I think we have a very good system set up now, and I'm very, I would say, positive that under Wael guidance, we will both continue that efficiency build-out. If the time comes, we will have a discussion on additional and incremental innovation programs. Nothing exceptional to be expected in this time frame.
Holger Blum, Patinex Management. You elaborated on the exciting parts of your business where you have high growth in cell and gene therapies, I'm sure there's also the dark side of the business where you have more challenges and price pressure. I wonder, overall, looking at the total industry, do you see the growth rate rather accelerating because the mix now is different? Should we think about the next 3, 4 years about comparable growth rates to the last 3 to 4 years? Do you see an acceleration in trend? That's part one.
Yeah.
Maybe part two on your relative position to competition, what sets you more apart versus peers-
Yeah
compared to 3, 4 years ago, whether you'd use it more for enhancing profitability or just mainly focusing on the top line?
No, great questions. To answer your first question, of course, it's not all booster rockets on our shoulders. I think we try to outline the business opportunities. I think our attempt, I think a successful venture to identify those sub-segments that predominantly benefit from capabilities like the ones that Tecan offer. These are in the space of laboratory automation, upscaling processes, and really translating technologies from research into the regulated space. The growth rates underlying, like I said before, we continue to aim to outgrow the underlying market segments. Acceleration, deceleration, of course, many factors depend also sometimes on the adoption of some of these technologies in the markets that we discussed. We talked about the translation from advanced sequencing technologies into the clinical space. You've seen very elegantly the description on where companies like Ambry Genetics are in the adventure.
Of course, there's always I think some time that it needs for these technologies to be adopted by users in the broadest sense, less from specialist companies, and really kind of go out and be deployed in average clinical settings to the kind of lower complexity level. I wouldn't kind of necessarily construct a kind of, oh, this is now an accelerated growth part. I think we very ambitiously and passionately will aim to outgrow the markets. Wherever the opportunities is, of course, we will put every muscle behind it to be as fast and as aggressive to grow our share or the new market that we're entering with the products of choice and that we are developing either for us or for our partners. Maybe on your competitive differentiation question, of course, we are in a highly competitive market.
We are not the only company offering laboratory automation. I believe what makes us somewhat special is really that ability to upscale, industrialize, and transfer technologies from research into diagnostics. This is not just appealing for the diagnostic companies. This is equally appealing to researchers in the lab and people that are aiming to develop technologies that may go into this transition because they know with Tecan, they work with solutions that are, if you want, predefined for that regulatory journey because we build most, if not all our products alongside the FDA regulations. This is, I think, where we're particularly strong. This is where if you would work with us on the research side, you want to move into diagnostics, you don't have to switch platforms. You don't have to do all these things.
I think at the same time, of course, we are probably very well-equipped to respond to very flexible market demand and requirements. We are not only an automation company, we're adding capable consumables and software that makes our solution offering more complete. I think that's a very important piece. Like I said before, we are investing into also differentiating tools like Introspect, which really help our clients to not just have a great piece of equipment and consumers and reagents, but really assess their productivity and operational efficiency with software tools like Introspect and other things going forward. Again, I'm not claiming we are the only play in town, but I believe we have a pretty solid understanding of the science as it relates to the opportunities that we see from research into the pharmaceutical setting, into the clinical setting.
Yeah, thanks very much. Scott Bardo from Berenberg. If it's okay, I'd like to direct a few questions to some of the other speakers, Achim, if that's all right.
Sure.
I was going to ask Klaus. It appears to me that Tecan's always had good products in detection, but punched a little bit below your weight. You've talked about Spark exceeding your expectations. Are there any organizational changes required to really make that a success or at least live up to its potential? Perhaps if you could talk a little bit about that. Maybe then Achim, if I was to ask you to force rank some of the areas that you feel are a little bit underrepresented on the consumable side. Is it more cell biology? Is it more proteomics? Or is it more mass spec? Or is it more molecular? If you can give us a feeling for where you see Tecan is underrepresented today, that would be helpful.
Klaus?
Yeah, let me comment on Spark and Spark CyTO. I thought you probably got a sense of that now with Spark CyTO coming, there is, I think, a big excitement in the organization, right? Because it's a product, I think we've been waiting for a long time. The way we have designed it, the way from the features it comes, we are, I think, very confident to hit a kind of very sweet spot out there. Spark CyTO is going to build on the success that we have seen with Spark, right? Spark came in the market about three, four years ago as a modular platform, and we used the time to improve functionality, to add new functions, to develop ready-to-use assay, and to make it easier for our customers to use the overall product.
With the introduction of Spark CyTO, we started to look into the organization at the end to address your question around is there an organizational requirement now to deliver on the growth expectations? It's something we looked into. I think specific around Spark CyTO, we want to take care now that we have the application know-how out there, right? We need application scientists because the instrument is now more than kind of just looking at a simple immunoassay. It's really about talking the complexity of a cell-based assay. That's an organizational kind of change that we're going after that I think will help us to improve the overall success. It's in line at the end with the focus that we're calling out, the application focus.
A goal that we have set out that if you look at our ratio of what we have between reps and application scientists, to bring that down to something that is in the range of 1 to 3. We really want to be at the level where we can support those applications. Okay.
To your second question on, I think my personal ranking is probably to be expected. I mean, probably from the genomic space, I think we see still quite some opportunities there to become more complete in some of the kind of workflow offerings along the axis of extraction all the way into the sequencing modalities and other assets as well. Second would be proteomics. I mean, that is for sure. As we highlighted today, the workflow as it's realized today for many of the mass spec applications, really cries out for functional consumables like the one that we just included with Tecan SPE . There's many more of these functional elements that really help to, I would say, stabilize and make these kind of workflows more, I would say, repeatable and transferable to routine use.
On the sales side, naturally, we actually launched a new range of microplates that we're adding to the Spark reader that really is probably one of the key elements of cell adhesion and cell analysis. Probably the cell market itself doesn't offer so many, I would say, profitable reagent opportunities and consumable opportunities.
Perhaps last quick question from me, if possible. We heard today how Introspect was helpful for some of your customers with multiple systems and requiring efficiencies in monitoring. I just want to get a bit more of a broader feel for this move into software. Is this just a platform to appease your existing customers, or is this a self-sustaining business model or potentially even a third leg to your business? How far does this move go?
Right now, Introspect is what it is. It is a first step into a sales-as-a-service modality that Tecan is just starting to, I would say, engage in and explore. I don't want to get ahead of myself in proclaiming this will become a massive business entity. I think it is a very important capability that we want to build out in terms of lab connectivity in the greatest sense, and Introspect is probably one of the, I would say, product manifestations in that journey. Introspect today, I think as was outlined by Klaus and Joy, I think is for us an element tool that is in the beginning phase to be also growing into other areas. It is right now offering a lot of functionality. We see a lot more that we can do with it.
Yeah, I think as we grow this product in the market space also, we have to grow our capabilities as a company to sell and support and then basically monetize these type of products going forward on a probably more extended range. I would probably classify it as a very important first step into the area of software prioritization and digital product development.
You have talked about many of the acquisitions you did in the past few years. Can you maybe also elaborate a bit on IBL? How has this developed? For example, how many new product have you launched? How is this developing, and how does it fit into the Tecan strategy?
The second question would be around the mass spec sample prep. Can you maybe give a bit more color on who are the competitors there, and how do they compare to Tecan? Thanks.
Sure. Maybe I take the first question, then Klaus, you can probably talk about the kind of mass spec environment. IBL, as you know, was acquired to add capabilities and content in specific diagnostic regions where we felt we can leverage, particularly the presence of the Tecan open systems that cater to areas like autoimmunity or allergy testing or intolerance testing on a bigger scale and other more niche immunoassay markets. As we also communicated, IBL business was integrated into the company with the aim to leverage the global footprint. I think we made very good progress with expanding our reach, particularly into other areas of Europe, because IBL was predominantly kind of Germanic or DACH-based franchise. We also, I think, made very good inroads into the Asia and the China market, and we are now moving into the North American market with more focus.
To your question on new product launches, we are adding products as we basically develop the pipeline for these niche targets, particularly in collaborations with those entities that develop and identify biomarkers. We are constantly, maybe a few a year, adding content to these platforms. We also launched, as you probably have seen from our previous communication, an entry-level system that is also capable of now penetrating more, I would say, lower throughput laboratories with a similar portfolio. We have completed the transfer of these assays onto these new box, and we are very actively promoting it right now. Klaus, you want to.
Yeah
Take the mass spec question?
The question was around competition in our mass spec and SPEware Corporation environment, right? I think very good question. With the products that we have, with the verticals that we address, we try to pick those areas where, with the product features that we have, we have a unique differentiator. If I need to think about who we are really competing with, it is more around applications where customers decide that, oh, we do not need now solid phase extraction, we are doing it without. For example, dilute and shoot, which is a common approach without purification to put something directly on a mass spec. It is more about getting customers to adopt certain assays that could really require the level of overall purification. If you look generally around who has also SPE products out there, you quickly end up with the large mass spec consumables provider.
We find that we are not really in at a head-to-head competition with them because our products or the SPEware Corporation consumables and solid phase extraction columns, have very differentiated kind of technical properties, right? Those are microsorbents. The bed of the absorption is very, very small. It gives you, if you're looking at the large volume that you need to get the sorbent, that's the kind of technology that they use and that other suppliers haven't been able to really master it. The way I like to look at it from a competition point of view is really, what kind of solution are we able to deliver? When it's about to have automated liquid handling system with a positive pressure system and adding on the solid phase extraction, we have a quite unique position, which helps us.
Okay.
I would have two more questions. The first is quite easy. Are you actually recruiting, looking for a Head of the Partnering Business at the moment?
Yes, we are.
You hope to replace yourself?
My aim is to fill that position by the end of this year, latest early Q1 2020. Yeah.
Okay. The second question relates to the partnering business, actually. What do you know is your view on the risk appetite Tecan should take? I think under David, we probably de-emphasized the dedicated system kind of area a bit, kind of after the experience with ORTHO VISION, et cetera. Is there any change with respect, and would you have some appetite for larger contracts again?
I mentioned before that maybe I was not clear enough in the section of contracts or projects under development. There is a substantially large project in that category. Maybe to address your question slightly different. I said before, we take on bespoke system development programs, and we're not shying away from them. I think we have the experience and the credibility that we built up and the experiences that we made, particularly on these previous instrument development programs. I think what we see as a preference right now is really accelerated time to market projects where most of our clients we talk to prefer a faster route, leveraging modules of our existing toolbox in any form or fashion to deliver alpha, beta, and validation units in a shorter period of time. It's less us kind of shying away from large projects.
It's more, we see the growth and the time to market opportunities more on the modular platform development range right now, and that's what we're reacting to. Then, of course, when the opportunity would come along, and you can imagine that we're not kind of sitting here and waiting for customers to call us. We're very proactively identifying clients where a next generation system that could even probably more kind of need a bit more of a bespoke development approach would be due, and we are very actively cultivating and then working on similar programs as well. I would very happily take on the next bespoke system development program.
Okay. Now since you mentioned it once again, this larger project now, is there any timeline to it?
Definitely not in 2020 in the market.
Beyond that.
Yeah.
Thank you.
I think you mentioned before, this Labwerx offering. Maybe you could explain a little bit more what this means and what are your expectations also from a future revenue contribution. Maybe just on the consumables and reagents, is it mandatory that customers use your products, so the plastic tips or the reagents, or could they also be exchanged with, let's say, other supplier?
Should I pick it?
Yeah.
On your question around Labwerx has been with Tecan, if you want, since Tecan exists, right? The need for customizing certain systems in a research setting, Tecan has always done that. The team helps the sales out there to design those systems, at the end, get it installed and support it. What we now did by really now giving it a brand around it, we're calling it now Labwerx as a capability, is as we have seen over the last years, the contribution of those projects has grown. To make sure that we are able to capture future growth potential, it was just important to organize it as a really dedicated group, but also to make sure that in our communication, we are very clear what is the capability that people get out of overall Labwerx, right?
At the end, it's nothing that we're doing now newly. I think we are refocusing it and creating visibility around this capability and very actively go out there and look for projects where we know we can win through this overall capability. I think your second question around consumables. When I talked around genomics, I think I made the comment that consumables at Tecan work that you have the instrument and you have the consumable. If you want to achieve the performance that we guarantee with the system, be it in pipetting accuracy, be it in reproducibility of the results, you have to use the consumables that come with the system. Only if those two are combined, then we can take also a responsibility for the overall performance of the system.
If our customers want to use the system with other consumables, there are certain types out there that also fit on the overall instruments. It's nothing we recommend, right, it's nothing that we are going to support.
Maybe an add-on comment. What Klaus was describing is the life sciences environment where typically you talk about open systems. They're not kind of closed, kind of locked-in solutions. Some of the, of course, on the reagents, we work alongside many reagent vendors, including our own, for example, for library prep in some instances, to just facilitate a variety of biologies that require different chemistries. It's an inherent nature of these open systems that you can sometimes pick and choose what the best chemistry is, that's why I think we try to outline why we're so excited about the NuGen acquisition because it truly brought some innovation and differentiation in their chemistries.
That makes, of course, us very confident that we can not only gain share of these reagents on our own machines, but also increasingly sell these chemistries into competing platforms, which would probably then have the same situation. Secondly, on the consumer side, on the partnering side is of course a little bit different because, once a consumable is designed into a clinically validated workflow, it becomes incredibly difficult, if not costly, to move away from such a designed-in consumable. Similar to what Klaus said, in these type of processes in the clinical setting, you're more worried about performance, reliability, and uptime than necessarily squeezing the last fraction of a cent out of a plastic consumable.
I think the cost of failure of a run in these type of environments, this is why we concentrate on producing and delivering high-quality consumables, is probably playing to our strengths rather than exposing us to competitive threats as I just described.
Thank you. Just one real quick. I just want to get a better feeling for the shape of gross margins going forwards. I think that historically, as a group, the messaging was somewhat that gross margins would be under modest pressure because your partnering business was growing faster, and that has lower gross margin. Now there's been some organizational changes. You've had some cost savings. You bought NuGen. I don't know if perhaps pulling in Rudi, but I want to get a feeling for how you see the evolution of gross margin given the current business mix.
Of course. Gross margin pretty much depends on the mix of the products that we're selling. At the end of the day, the more reagents we are bringing into the mix, overall, we're benefiting our profitability. What you said before is true. Of course, the two businesses operate on very different gross profit margins due to the business nature of what they're entertaining. As you alluded, the more partnering business, particularly engineering work we are taking on, which should be an indication of future growth. The more we are compromising on the gross profit, particularly on the partnering side. Again, I think we have a pretty good balance there.
We do, of course, everything to also expand our inclusion of consumables in the partnering side as we do, of course now with the reagents and consumables on the life sciences side to capture as much of the recurring revenue, which at the end of the day, helps profitability. The last piece, of course, as you're seeing with the integration now of our supplier in North America and Vietnam. There's, of course, another means to go at the material costs and the savings that you can leverage from such an operational vertical integration.
From my picture, the model still is not a bad model assumption. I appreciate it's a little bit bigger again, just because of the sales. Is that a reasonable assumption going forward?
Again, probably I wouldn't like to guide on the kind of gross profit trajectory. As you know, our business model is quite complex. That's why I would also refer back to. We feel pretty comfortable guiding on the top line and the bottom line. Like I illustrated before, I think with all the dynamics in between the guidance, with all the ins and out, which is again, just to be very clear, un-kind of adjusted numbers overall. We're just reporting everything that comes through also from an acquisition standpoint. These are the real numbers, and that's why I think I feel pretty good about the 19% margin target for this year. Okay. I'm just hearing that lunch is ready, and I'm sure you're desperate to get a refreshment.
With this, again, I just really cordially thank you all here in the room and online on the web, having been part of this discussion and presentations today. Thank you very much. I look forward meeting you at another occasion or maybe at the next Capital Markets Day. Thank you very much.