Danaher & Sartorius: Promising Yield

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That's all really helpful background, and I'd love to cover a lot of ground. To start, you mentioned how there are these constant competitors that you've encountered time and again, and their various portfolios have evolved to be more comprehensive over time. How do customers choose which one to source for different areas? How many customers prefer the best of breed for each specific element of the process versus those who prefer to consolidate all purchasing with one vendor? How do you think about the lay of the land and what drives customers to do business with one versus the other?

Most of these scientists are very good at their work and have started somewhere. For example, Merck Millipore was the company that trained many of them at the grassroots level. I'll give you an example, if you talk about sterile filtration, to most guys, it's 0.22 micron. If we ask ourselves how we got to that, it's basically that 0.45 was the original sterilizing filtration rate. Someone has said we need to halve that and Millipore said, that's not a 0.2 micron, it's a 0.22. They were the ones that got in at university levels, very quickly. They have these type one water systems and everyone calls it Milli-Q water. It comes down to what the scientists are used to and what they were comfortable with during their research. When they move to a bigger company, like Amgen, they would call the representative they knew from their research days. That's typically how the incumbent gets the business.

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I'm roughly familiar with chromatography columns.

If I'm a Sartorius representative, I would tell the client that I have a reusable base column that is cost-effective for the development phase. The same technology can be offered in the same format later down the spectrum but in a single-use format. This makes the transition from reuse to single-use easier and shortens the time span of reprocessing. It also makes the process more scalable for larger volumes. Technology is crucial in this regard.

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I see.

Price will always be a factor, but in reality, the product must be cost-effective and do the job. This is our way of thinking. Price isn't everything because cheap products often have a feeling of being cheap and cannot produce quality.

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