Revvity says demand to stay weak on biotech funding woes

 Revvity Inc on Monday said weakness in demand for its diagnostics and contract research solutions would likely continue at least into the first half of the next year.

The additional cost-saving measures will be undertaken heading into the next year, the lab equipment maker said, disclosing its plan to bring down cost by another $20 million, above a $80 million reduction it initially projected for the year.

A rise in interest rates has squeezed funding for drug development by biotechs running low on cash, weighing on demand for life sciences tools and diagnostic technologies offered by Revvity.

There was a "noticeable step down" in demand from its pharmaceutical and biotech clients, especially in September, said Chief Financial Officer Maxwell Krakowiak on a conference call.

Revvity's comments echo similar concerns raised by larger rival Thermo Fisher as biotech funding woes linger.

Shares of Massachusetts-based Revvity fell about 18% to $80.66 after the company cut its full-year forecast and posted downbeat quarterly results.

It now expects annual sales to be between $2.72 billion and $2.74 billion, compared with its prior forecast of $2.80 billion to $2.85 billion and analysts' estimates of $2.83 billion, according to LSEG data.

"As to when this industry downturn might dissipate, we do not have a crystal ball," said CEO Prahlad Singh, adding that the company saw continued pressure from a slow recovery in its key market China.

On an adjusted basis, the full-year profit is expected between $4.53 per share and $4.57 per share, short of the $4.79 estimates.

Revenue for the third quarter came in at $670.74 million, below estimates of $695.33 million. Its adjusted profit of $1.18 per share also missed estimates of $1.19.

Formerly known as PerkinElmer, the company last year divested three of its businesses to focus on life sciences and diagnostics units under its new name Revvity.

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