Incorporated: 1957
NAIC: 334516 Analytical Laboratory Instrument Manufacturing; 325413 In-Vitro Diagnostic Substance Manufacturing; 325998 All Other Miscellaneous Chemical Product Manufacturing
SIC: 3826 Analytical Instruments; 2835 Diagnostic Substances; 2899 Chemical Preparations Nec
Bio-Rad Laboratories, Inc., sells more than 8,000 products and systems used to separate chemical and biological materials, a process that enables researchers to identify, analyze, and purify components. The company serves 70,000 customers involved in life sciences research, healthcare, and analytical chemistry, selling its products in more than 30 countries. Bio-Rad divides its business into two operating segments, Life Sciences and Clinical Diagnostics. Through its Life Sciences segment, the company supplies reagents, instruments, and software to aid in the study of the characteristics, behavior, and structure of living organisms. Through its Clinical Diagnostics segment, Bio-Rad develops tests and test kits that are used to detect, identify, and measure substances in blood or other body fluids and tissues. The division's chemicals and instruments are used to detect and monitor a variety of diseases such as anemia, diabetes, and acquired immune deficiency syndrome (AIDS). Although publicly held, Bio-Rad is tightly controlled by the Schwartz family, who wield 90 percent of the company's stock voting power.
Berkeley in the Fifties
Bio-Rad was founded by two University of California at Berkeley scientists, David Schwartz and his wife Alice Schwartz. Their entrepreneurial effort began in a surplus military structure, an austere setting for a business that a half-century later would generate more than $1 billion in revenue annually. Remarkably, the husband-and-wife team would witness the full maturation of their business, leaving a lasting mark on Bio-Rad and factoring as the dominant personalities during the company's first 50 years in business.
David, a chemist, and Alice, a biochemist, began their professional careers in Berkeley. They began by doing scientific work for other firms on a contract basis, functioning essentially as freelance chemists. In the course of their work, the pair developed new products and tools to facilitate their research, which soon led them to the realization that their colleagues, other researchers, might benefit from their discoveries. The idea became the motivation for starting a business, a company they named Bio-Rad Laboratories, Inc.
David and Alice Schwartz established their business in 1952 and incorporated it five years later. Initially, they housed Bio-Rad in a Quonset hut, the type of temporary quarters widely used during World War II. The prefabricated, corrugated steel structure sat behind Spenger's fish emporium in Berkeley, where the two scientists focused their efforts on the study of proteins. The success of their work would eventually enable the Schwartzes to replace their Quonset with a corporate headquarters spread across an 80-acre site, replete with multistory, modern office buildings.
From the start, the two entrepreneurs were developing custom methods to separate proteins from each other. By isolating proteins, the molecules could be tested by researchers to determine which function each protein performed. Although complex, the process could be simplified into three steps: separation, purification, and analysis. The Schwartzes and the rest of Bio-Rad's staff would use the same basic process for the next five decades.
Bio-Rad recorded slow but steady growth during its first years in business. The company generated $55,000 in revenue during its first year, and would wait nearly 15 years before reaching the $1-million-in-sales mark. During this initial phase, the company limited its involvement to the life sciences sector, developing and producing specialty chemicals used in biochemical, pharmaceutical, and other life sciences research applications. The company began packaging a variety of tests and shipping them to other laboratories. Financial totals increased as its roster of products increased, as did the financial totals for most companies, but for Bio-Rad, a company that eventually depended on thousands of products, it took a while for its research and development efforts to reach critical mass.
Entry into Clinical Diagnostics in 1967
A turning point in terms of the company's pace of growth occurred during the late 1960s. Bio-Rad, dependent entirely on life sciences work, added a second segment to its operations. In 1967, the Schwartzes collaborated with a researcher from their alma mater and developed a thyroid diagnostic test, which marked the beginning of Bio-Rad's involvement in the clinical diagnostics field. Through its clinical diagnostics segment, which relied on the same basic separation techniques used by its life sciences segment, Bio-Rad developed and manufactured automated test systems and test kits. The systems and kits were used by hospitals and clinical laboratories to assist physicians in diagnosing and monitoring their patients.
By the time Bio-Rad made its first foray into the clinical diagnostics field, its operations were open to public scrutiny. Few industry observers chose to take more than a cursory look at the company, however. The Schwartzes took their company public in 1966, which ordinarily would have raised the business's profile, but Bio-Rad remained in the shadows. The type of business the company was in was partly responsible for its relative anonymity. The company made the tools, instruments, and tests that enabled other researchers to complete high-profile work. "It's not sexy," a Bio-Rad senior executive remarked in a January 11, 1997, interview with the San Francisco Business Times. "We aren't going to be the ones curing cancer. Hopefully, we'll be supplying the tools."
Bio-Rad also maintained a low profile because its stock was thinly traded. David and Alice Schwartz owned more than 60 percent of the company's controlling stock (an interest that would increase to 90 percent in later years), leaving the couple in firm command of the company. "Schwartz totally controls the company," an industry observer noted in the December 6, 1991, edition of the San Francisco Business Times. "There's no way anyone can force him to do anything he doesn't want to do." Bio-Rad, except for a few occasions, flew under the business press's radar, quietly developing into an industry stalwart.
Analytical Instruments Becoming the Third Segment
Bio-Rad added a second operating segment during the 1960s, and it added a third operating segment in the 1970s. The company diversified into clinical diagnostics through internal means, but it would develop a third business arm through external means. Acquisitions paved Bio-Rad's entry into the analytical instruments field. The company purchased Block Engineering in 1978 and Polaron Equipment Limited in 1982, giving it the foundation for developing instruments used in industrial and scientific research. The company's products in its third operating segment included spectrometer systems, analytical and measuring instrument systems, and semiconductor measurement instruments, products that were sold to government agencies, research institutions, and industrial companies. Bio-Rad's Analytical Instruments segment received a boost to its stature with a third acquisition, the purchase of Vickers Instruments in 1989.
An International Profile
The year Bio-Rad acquired Vickers Instruments, its sales reached $236 million, representing an average 20 percent annual increase each year for the previous quarter-century. Alice Schwartz had retired from active duty a decade earlier (she remained a Bio-Rad director), but David Schwartz continued to guide the company on a day-to-day basis, serving as chairman and chief executive officer. He presided over a company that had recorded substantial growth not only financially but in other areas as well. The expansion of the company's product line--Bio-Rad was selling more than 4,500 different products by the beginning of the 1990s--had fueled the company's geographic march. The company relied on markets outside North America for 60 percent of its annual sales, maintaining sales and manufacturing offices in Brussels, Paris, Vienna, Tokyo, Beijing, and Hong Kong, as well as elsewhere.
Bio-Rad made headlines on several occasions, shedding the veil that surrounded its operations to enjoy brief moments in the limelight. In 1995, the company's research into genetics attracted widespread interest during the trial of O. J. Simpson. In 1997, a technique the company developed to inject DNA into sheep cells enabled the birth of Dolly, the first cloned lamb. Bio-Rad tools were used to help identify the E. coli bacteria strain. Its Helios Gene Gun was used in research for vaccines to combat AIDS, hepatitis, and other infectious diseases. The attention the company would receive would only heighten in the coming years.
A Mad Cow Master
In 1999, Bio-Rad spent $210 million to acquire a French company named Pasteur Sanofi Diagnostics. Included in the acquisition was a test for bovine spongiform encephalopathy, or BSE, a disease known worldwide as "mad cow disease." The first human case of mad cow disease occurred in 1996; by the beginning of 2001, 96 people, mostly Britons, had died or were dying from the brain-eating disease. Bio-Rad jumped into the market with its acquired test, beginning sales in November 2000 of its proprietary Platelia-BSE. Bio-Rad was one of only three companies licensed to market a test for BSE, and the first established name (the other two firms were private, European companies) to enter the market. Within a short time, Bio-Rad captured more than two-thirds of the market for BSE test kits, the type of accomplishment that earned the attention of Wall Street. By 2002, the company's stock value had nearly doubled.
Although the increasing value of Bio-Rad shares was gratifying, particularly to the Schwartzes who owned much of the company's stock, the attention received from its involvement in the BSE crisis exaggerated the importance of mad cow to the company. Bio-Rad dominated the market, but sales collected from test kits amounted to only 10 percent of its total revenue volume. The company made the majority of its money by selling thousands of products developed to assist in the research of scores of applications. The sense of what drove the company forward was ingrained in the leader appointed as chief executive officer in 2003, the first change in Bio-Rad's leadership in 50 years.
New Leadership in 2003
When David Schwartz finally relinquished the duties of chief executive officer, he passed the responsibilities to familiar hands, his son, Norman Schwartz. The younger Schwartz was no newcomer to the company, having joined Bio-Rad 29 years earlier, in 1974, when he began serving in a variety of managerial capacities for the company. Under the tutelage of his father, Schwartz served as corporate treasurer, general manager of the company's U.K.-based manufacturing operations, manager of its Japanese subsidiary, and as head of Bio-Rad's Life Sciences Group, a position he held when the company completed the purchase of Pasteur Sanofi Diagnostics.
The company's involvement in BSE-related business deepened in 2003 when the specter of a contaminated beef supply spread to the United States. In December, a cow in Washington State was diagnosed with mad cow disease, triggering calls for the U.S. Department of Agriculture (USDA) to implement widespread screening of U.S. cattle. In response, Bio-Rad, which sold more BSE test kits in Europe and Japan than any other company, applied for USDA licensure in January 2004. In March 2004, the company became one of the first companies to gain federal approval for a mad cow test kit.
A Promising Future
As Bio-Rad prepared for the future, it could also look forward to a wealth of business opportunities arising from the sequencing of the human genome. The mapping of genes revealed vital information about the chemical composition of the body's proteins, which participated in every process within the body's cells, but it offered scant information about the specific roles each protein played. Determining each protein's function, a field known as proteomics, was Bio-Rad's specialty, the same sort of work David and Alice Schwartz were doing in their Quonset hut during the early 1950s. By understanding each protein's function, drug discovery and development efforts for the spectrum of human illnesses promised to improve dramatically. The demand for aid in advancing the field of proteomics put Bio-Rad in an enviable position, ensuring that the company, as it had for five decades, would continue to play a pivotal role in scientific discovery. "The biggest challenge is really making choices," Norman Schwartz explained in a March 4, 2002, interview with Investor's Business Daily. "We have so many opportunities, so many interesting areas to explore. Our biggest challenge is trying to focus in on the best opportunities."
Principal Subsidiaries
Bio-Rad Laboratories Pty. Limited (Australia); Bio-Rad Laboratories Ges.m.b.H. (Austria); Bio-Rad Laboratories S.A.-N.V. (Belgium); Research Specialties for Laboratories N.V. (Belgium); Bio-Rad Laboratorios Brasil Ltda. (Brazil); Bio-Metrics Properties, Limited; Bio-Rad Laboratories (Israel) Inc.; Bio-Rad Pacific Limited; Blackhawk Biosystems, Inc.; Bio-Rad Laboratories (Canada) Limited; Bio-Rad Laboratories (Shanghai) Limited (China); Bio-Rad spol. sr.o. (Czech Republic); Bio-Rad Export, Inc.; Bio-Metrics Ltd.; Bio-Rad Holdings LLC; MJ Bioworks, Inc.; Bio-Rad Laboratories APS (Denmark); Bio-Rad France Holding; Bio-Rad France Holding 2; Bio-Rad Pasteur (France); ADIL Instruments SAS (France); Bio-Rad Laboratories SAS (France); Bio-Rad Verdot SAS (France); Bio-Rad SNC (France); Bio-Rad Laboratories G.m.b.H. (Germany); Bio-Rad Laboratories E.P.E. (Greece); Bio-Rad Hungary Trading Ltd.; IMV Medical Information Division, Inc.; Bio-Rad Laboratories (India) Private Limited; Bio-Rad Haifa Ltd. (Israel); Bio-Rad Laboratories S.r.l. (Italy); Nippon Bio-Rad Laboratories K.K. (Japan); Bio-Rad Fujirebio Inc. (Japan); Bio-Rad Korea Limited; International Marketing Ventures, Limited; MJ Research, Inc.; Bio-Rad, S.A. (Mexico); Bio-Rad Laboratories B.V. (Netherlands); Bio-Rad Polska Sp. z o.o. (Poland); Bio-Rad Laboratoires-Aparelhos e Reagentes Hospitalares, LDA (Portugal); Bio-Rad Labortorii OOO (Russia); Bio-Rad Laboratories (Singapore) Pte. Limited; Bio-Rad Laboratories (Pty) Limited (South Africa); Bio-Rad Laboratories S.A. (Spain); Bio-Rad Laboratories AB (Sweden); Bio-Rad Laboratories AG (Switzerland); Bio-Rad Laboratories Limited (Thailand); Bio-Rad Ltd. (U.K.); Bio-Rad Laboratories Europe Limited (U.K.); Bio-Rad Laboratories Limited (U.K.); PB Diagnostics Ltd. (U.K.); MJ Geneworks, Inc.
Principal Divisions
Life Sciences; Clinical Diagnostics.
Principal Competitors
GE Healthcare Bio Sciences; Invitrogen Corporation; Applera Corporation; Abbott Laboratories; Roche Diagnostics Corporation.
Further Reading
"Bio-Rad," San Francisco Business Times, March 21, 1988, p. 35.
"Bio-Rad Signs Definitive Agreement to Acquire Diamed," Internet Wire, May 16, 2007.
Hemmila, Donna, "Adding to Its Toolbox: Bio-Rad Going Shopping Again," San Francisco Business Times, July 11, 1997, p. 3.
Lamb, Celia, "Maker of Clinical Devices Is Sold to Biotech Giant," Sacramento Business Journal, August 24, 2001, p. 5.
Lau, Gloria, "Bio-Rad Laboratories Inc.," Investor's Business Daily, February 28, 2001, p. A12.
Ortiz, Jon, "Hercules, Calif., Lab Wins FDA Approval of Quick Test for Mad Cow Disease," Sacramento Bee, March 19, 2004.
"A 'Rad' Firm: Bio-Rad Laboratories Inc. Says Its Success in the Healthcare Industry Stems from Strong Customer Relationships Based on R&D and New Technology," US Business Review, June 2006, p. 230.
Rauber, Chris, "High-Tech Outfit Tends Low Profile," San Francisco Times, December 6, 1991, p. 1.
Reeves, Amy, "Bio-Rad Laboratories Inc.," Investor's Business Daily, March 4, 2002, p. A9.
Silber, Judy, "Hercules, Calif.-based Biotech Firm Reports Profits Nearly Triple," Contra Costa Times, May 2, 2001.
Tansey, Bernadette, "Protein a Healthy Research Model," San Francisco Chronicle, August 22, 2006, p. E1.
— Jeffrey L. Covell
