2009 was a great year for Luminex, but one that held many challenges for corporations and individuals worldwide.  Uncertain economic conditions. The Influenza A/H1N1 pandemic. Changing political landscapes.  As we begin a new decade here at Luminex and look back at 2009, we are pleased with the progress we have achieved. We continue to accomplish record growth and strengthen our position as the worldwide leader in multiplexed solutions. 

Financial and operational highlights from 2009 include:

- Revenue of $120.6 million, a 16% increase over 2008

- System revenue of $30.7 million, a 9% increase over 2008

- Record royalties revenue of $18.3 million, a growth rate of 23%

- Record assays sales revenue of $31.1 million, up 66% over 2008

- Gross margin of 67% of revenue

- Record non-GAAP net income of $7.2 million or $0.18 on a per share basis

- Installed base of instruments now totals more than 6,700 systems shipped worldwide

These results, particularly in such a challenging economic environment, demonstrate the dedication of Luminex’s staff and partners, the strength of our technology, and the tremendous impact that our products have across science and healthcare.  With the foundation we have built upon in 2009, we are well positioned to grow and capitalize on future opportunities in the months and years to come.

Assay Advances

2009 was an important year for Luminex’s Assay Group, marked by increased sales, development milestones, regulatory approvals around the world, and an unexpected, defining global pandemic. 

When the world looks back on 2009, the Influenza A/H1N1 pandemic will undoubtedly be considered a key event.  Luminex worked diligently alongside public health authorities, our customers and partners as the virus spread around the world throughout the late spring, summer, fall and early winter.  As the only test cleared by the U.S. Food and Drug Administration (FDA) to detect 12 respiratory viruses at once, our xTAG Respiratory Viral Panel (RVP) emerged early as an important surveillance tool.  It proved throughout the year to be an effective aid in helping distinguish patients infected with common respiratory viruses from those who are potentially infected with pandemic Influenza A/H1N1.

We launched our xTAG RVP Fast assay in several European countries in 2009 and are working through regulatory approvals for launches of the test in North America, Asia and Africa in the next year. 

Our cystic fibrosis (CF) product line also made advancements in 2009.  In June, we launched the xTAG Cystic Fibrosis 39 Kit v2 and xTAG Cystic Fibrosis 71 Kit v2, as CE IVD Marked products under the European Directive on In Vitro Diagnostic Medical Devices. The next generation of Luminex’s first groundbreaking xTAG Cystic Fibrosis Kit, the new tests were designed with feedback from clinicians and lab professionals.  They offer fast, accurate detection of cystic fibrosis gene mutations and can be used in carrier screening and to assist in screening newborns for the genetic disease. 

The xTAG Cystic Fibrosis 39 Kit v2 detects the same 39 genetic mutations as the original xTAG CF Kit, but is faster and easier to use and offers a unique flexibility not available in other cystic fibrosis tests.  The xTAG Cystic Fibrosis 71 Kit v2 can screen for all of the genetic mutations in the xTAG Cystic Fibrosis 39 Kit v2 plus an additional 32 mutations including those that are typically found in specific ethnic populations.

In September, the xTAG Cystic Fibrosis 39 Kit v2 was cleared by the FDA. In 2010, we anticipate launching the xTAG Cystic Fibrosis 60 Kit v2, which detects the 39 mutations in the xTAG Cystic Fibrosis 39 Kit v2 plus 21 additional mutations, in the U.S.

Featuring broader mutation coverage than any other CF tests, these new assays are helping physicians detect CF in more patients more quickly.  They demonstrate Luminex’s leadership in innovative genetic and CF testing and are establishing a new benchmark for cystic fibrosis testing.

In addition to these tests, we saw additional adoption of our other assays, such as our Ashkenazi Jewish panel, and continued advancing product lines including our FlexmiR microRNA assays.  We are thrilled with the pipeline of tests we have in development, including novel products in infectious disease and newborn screening, and look forward to sharing news of advancements in these products over the next year. 

Technology Advances

In our Technology Group, we are continuing to strive to meet the multiplexing needs of laboratories of all sizes.  Our FLEXMAP 3D system, which was designed for higher-throughput labs and measures up to 500 analytes in a single reaction, is now in place at many major research centers around the world.  It provides significant advantages to these laboratories including fast, accurate results, improved analytical performance, front end automation compatibility, enhanced throughput and higher multiplexing capabilities.  With state-of-the-art analysis software and an ability to process up to 144,000 data points in less than an hour, FLEXMAP 3D is advancing diagnostics, life sciences research and drug discovery.

Looking toward 2010, we are excited for the launch of our MagPix system, which is designed to meet the needs of smaller laboratories.  We have been refining MagPix for many months and have placed alpha and beta systems in several laboratories.  Our team has met all of its development milestones, and we anticipate commercialization of the MagPix system in the second half of 2010.

Global Expansion

2009 was a year of exciting expansion for Luminex, featuring the opening of two new offices in Asia.  We have had many successes in the Asia-Pacific region, and there is a strong demand for Luminex technology and many projected growth opportunities in the market.  To capitalize on the potential in the region, we opened facilities in China and Japan. 

We officially opened our China office in September.  Located in the Pudong area of Shanghai, this location is serving as a hub of Luminex’s operations in the Asia-Pacific region.  It will allow us to provide support and sales services to our customers in the area.  We expanded into Tokyo in the fall as well and will officially open our facility there early in 2010. 

The opening of these two offices in Asia, coupled with our continued global presence in The Netherlands, Toronto, and our headquarters in Austin, create a true worldwide network for Luminex technology. This expansion will allow us to reach additional scientists, clinicians, partners, and work further toward achieving our mission of improving the health, safety and quality of life of people worldwide.

Looking Forward in 2010

As we look to 2010 and beyond, we plan to welcome more new customers and partners to our company and enjoy the favorable effects of our international expansion.

Our increased R&D investment over the past few years has yielded a number of new products that will drive long-term growth. We will continue working to drive growth by assisting our partners as they invest in and expand their xMAP Technology-based product offerings as well.

We are grateful for the support of our employees, customers, partners, and shareholders and look forward to continued growth in 2010 and toward expanding the footprint of our unique multiplexing technology. We welcome your feedback and will share with you more exciting news throughout 2010.

Patrick J. Balthrop, Sr.
President and Chief Executive Officer