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Agilent Unit & Pfizer Collaborate

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Dako, an Agilent Technologies (A) subsidiary, has entered into an agreement with Pfizer Inc. (PFE) related to the development of technologies in the field of companion diagnostics. The companies will work together on projects involving research, development, commercialization and advisory services.

Agilent had acquired the Danish cancer diagnostics company, Dako, for $2.2 billion (on a debt-free basis) last year. Dako provides antibodies, scientific instruments and software mainly to cancer-related diagnostic labs and collaborates with drug companies for the development of methods to identify patients likely to benefit from certain therapies.

Currently, the healthcare sector is witnessing a revolution and companion diagnostics or personalized medicine is taking center stage. It has been found that not all treatments are suitable for patients suffering from a specific disease as some require tests that are more specialized in nature.

Dako’s expertise in the development of methods to identify patients likely to benefit from certain therapies will help Pfizer to select patients that may benefit from its ongoing research in companion diagnostics; thus improving the diagnostic process.

There could be far-reaching effects on the entire healthcare system, as personalized medicine may become go a long way toward improving patient care and reducing medical bills.

According to the Global Industry Analysts, the global market for companion diagnostics may reach $280.2 million by 2017, driven by the enhancement of a drug’s clinical usage, thus reducing the overall cost and risk involved in drug development and commercialization.

Agilent’s revenues in the third quarter were flat sequentially and up 1.9% year over year, short of management’s expectations of a 2-3% sequential increase ($1.77 billion to $1.79 billion). The newly added Diagnostics and Genomics segment accounted for 9.0% of revenues in the last quarter, up 47.2% sequentially.

Currently, Agilent Technologies has a Zacks Rank #3 (Hold). Other test equipment companies, such as National Instruments Corporation (NATI), Ametek Inc. (AME), with Zacks Ranks #1 and #2, respectively are also worth considering.

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