Bio-Rad Labs cuts 2023 revenue growth forecast as biotechs cut spending

(Reuters) - Bio-Rad Laboratories on Thursday lowered its annual revenue growth forecast, given the uncertain pace of the biopharma sector's recovery and ongoing macro challenges, sending the company's shares down about 11% in extended trading.

The diagnostic firm's third quarter was primarily impacted by further deterioration in biopharmaceutical, early biotech customer spending and a challenging macroeconomic environment in China.

Bio-Rad now expects adjusted revenue growth between 0% and 0.5% on a currency-neutral basis, compared with a previously expected growth of 4.5%. The outlook excludes Bio-Rad's COVID-related sales.

The company — which sells laboratory apparatus, instruments, diagnostics to drug manufacturers, biotechs and food producers — cut its outlook for annual revenue growth on a currency neutral basis for a third straight quarter.

It reported total sales of $632.1 million for the third quarter ended Sept. 30, while analysts expected $689.57 million, according to LSEG data.

Bio-Rad echoed larger rival Thermo Fisher Scientific that signaled a slump in demand from biotechs for its services used in making therapies and vaccines could extend into the next year.

Bio-Rad's life science segment that serves biotech, pharmaceutical and food testing clients, reported a 17.1% fall in sales to $263.5 million.

The clinical diagnostics unit, Bio-Rad's revenue driver, through which it manufactures and sells blood and other diagnostic test kits to hospitals and physicians, reported sales of $368.1 million.

On an adjusted basis, Bio-Rad earned $2.33 per share in the July-to-September period, missing analysts' estimates of $2.78 per share, according to LSEG data.

(Reporting by Pratik Jain in Bengaluru; Editing by Shailesh Kuber)