Agilent Technologies Inc. (NYSE:A) Q2 2019 Earnings Conference Call Transcript
May 14, 2019 • 07:30 pm ET
this in a little more detail.
In China, our overall business grew 3%, driven by double-digit growth in ACG. However, our LSAG business declined by 1% during the quarter. There are two major factors impacting our China LSAG business. First, the recovery in the food market has not yet materialized. Government labs have not yet resumed purchasing at the levels we have previously seen. Second, the Chinese government's 4+7 initiative to lower generic drug prices is having a greater than expected impact on small molecule pharma. Consequently, we're lowering our revenue expectations in China this year. China does, however, remain an important long-term growth market for us. The other factor affecting LSAG growth is moderating global demand in small molecule pharma. We've seen several large accounts delaying replacement purchases.
In contrast to small molecule pharma, we continue to see strong global biopharma demand. While overall growth declined 1%, there are positive signs in other LSAG end-markets. Demand remains strong in environmental forensics and biopharma markets with solid results in chemical and energy.
You recall the strength in our leadership in gas chromatography with the recent launch of the new 8860, 8890 GCs. Since the launch, we're very pleased with the stronger than expected customer demand we've seen. We also had some other very exciting new products. In April, we introduced the new Agilent 6546 LC/MS Q-TOF system. This system is tailored to environmental metabolomics research in food testing laboratories, provide an ability to acquire high resolution data across an unprecedented dynamic range. Customers can certainly see more compounds and analyze them more quickly with this new offering.
In addition, during the quarter, we also introduced a unified, purpose-built portfolio of cell analysis products targeting cancer immunotherapy with the addition of ACEA Biosciences. This offering enables research in this fast-growing segment. Our cell analysis business continued to deliver double-digit growth. While we are facing soft market demand in our LSAG business, we remain confident in the strength of our portfolio and believe we are well positioned to continue winning in the market.
Now, I'd like to share more detail about the other two businesses. The Agilent CrossLab Group continues to deliver excellent results, growing 9% on a core basis. Demand is broad-based across all regions. This reflects a market-leading value of our portfolio and differentiated customer experience.
In China, the ACG business grew in the mid-teens. The team continues to execute our strategy of leveraging Agilent's large instrument installed base. We also continue to expand our services footprint in emerging cities and tailor our consumers portfolio to the local market.
The Diagnostics and Genomics Group delivered a solid quarter with 6% core revenue growth. Regional demand is led by strength in the Americas. Our pathology-related businesses grew high-single digits. Previously announced large competitive wins, along with continued strong demand for our antibodies and our companion diagnostic services, are driving our growth in that segment.
Agilent also received expanded FDA approval for our PD-L1 IHC companion diagnostic for metastatic non-smallcell lung cancer.