Dr Batra, how has Waters being impacted by the COVID-19 pandemic, in terms of operations, has revenue suffered? Has it bounced back?
There’s not a single person who’s not been impacted bythe pandemic. And Waters is no different. When the pandemic started and more, importantly, about a year ago, when I joined Waters, we set three goals.
Number one, we want to keep our employees and their families safe.
Number two, we want to do what we can to bring our expertise to ensure that this pandemic gets over as fast as possible through public health and thirdly, we want to make sure our business continues.
Like everybody else, the first half of the year was very, very difficult for us at Waters, and this is even prior to my arrival. Our business took really a beating. And we had quite a backward step in sales. We had to do furloughs with our colleagues. We had to take pay cuts across the board. It was quite a significant step back.
But what a difference a year makes right?
We’ve managed to keep all our colleagues safe, number one, and nobody on site has been infected and this is due to a highly scientific approach. Starting with measurements (of) air flow across our buildings, limiting occupancy as a consequence in the different buildings where employees were coming in.
Secondly, implementing testing on site. Well before testing was widely available, we made sure that we did deals with key providers and at major sites, testing was available for those who were coming on site.
Number three, requiring masks for our colleagues and more recently encouraging vaccination for most of our colleagues around the globe. Through that approach we managed to keep our business running. The consequence is that in a year, Waters has now, from a sales and commercial perspective really recovered.
Our sales growth at a global level for the first half of the year, grew 27 per cent. On a 2-year basis, that’s roughly seven per cent, all constant currency, and if you compare that to the rest of the industry, this is at the top of our peer group.
To put it into historical context, Waters over the last few years has lost commercial momentum and focus. Globally we had fallen to the bottom of the peer table. We were one of the laggards in the industry. And this was due to lot of reasons.
In a year’s time, thanks to the real strong focus of my colleagues, a bit of luck and the market recovering a bit, we have managed to climb to the very top of the industry.
I must say one should never really declare victory.
A lot of things have to conspire to make sure that these results come, but I think the number one reason is the dedication of our colleagues. India is no exception. India is actually the fastest growing market thanks to Anil (India President Anil Kumar), and the team there. It is actually the fastest growing market across the globe for us as Waters. So, no small contribution from India. 7 to 8 per cent of our global sales are in India now, which is quite a bit more than many of our competitors and I’m very pleased with what’s happening in the country.
In summary, we managed to keep our people safe. We’ve done a lot of work with many collaborators to put an end to this pandemic, and we’re still working at it. And number three, our business, knock on wood and cross my fingers, the business is doing fine.
You mention working with collaborators to end the pandemic. Which products from Waters have been used extensively during the COVID-19 pandemic?
Let’s start with India. In India, a lot of the generic medications that are used for treatment of symptoms of COVID-19 are produced in India and they’re tested on our HPLC/UPLC instruments, which means that our demand of course has gone up. But we’ve collaborated very heavily with local collaborators (to meet this demand).
In India, our products across the board have benefited because we are one of the largest suppliers of QA-QC testing and the demand for them from generics manufacturers has led to heavy consumption of our consumables as well as our instruments, especially HPLC and UPLC instruments.
We have many ex-US examples, but let me pick one that I think has the potential to change the way we do testing. LCMS (liquid chromatography and mass spec) are one of the most powerful tools for analytical measurements. PCR testing has been used to detect the COVID SARS CoV2 virus (and) is now considered the gold standard. But if you want an even more sensitive assay, that examines not the RNA of the virus but the proteins on the surface, you turn to LCMS. You turn to what we do.
And our collaborators in the UK knew that. We worked with the National Health Service (NHS) in the UK and several academic institutions, like the University of Manchester, University College London, Imperial College, in the UK, to develop LCMS for SARSCoV-2. We have shown that it is not only as sensitive as PCR, but has much lower false positive rates.
With PCR, you can get between 5-10 per cent false positives. But with the LCMS, because you test proteins, which no longer remain viable once the virus cannot infect a person, this is an even more sensitive technique. It is available as a research use only kit at this point. Given that development started smack in the middle of the pandemic, it has not become a commercially available asset yet. But it’s a great, great start and I’m very positive on what we’ll be able to do.
I think one other thing I would add is especially when the pandemic started to pick up heavily in India, the team did a lot and we were in conversation with Anil almost every day. I was harassing him from here saying ‘OK, what are we doing as Waters’ and he said, ‘well, we’ve made sure that we cover the insurance for anyone who goes to the hospital and their family.’ I said ‘OK, but what else are we doing?’ He said, ‘well, we’re offering our special service for anyone who needs it in our employee base.’ I said, ‘what else are we doing?’
So we landed up supplying oxygen concentrators for a lot of people across the country. I remember it was a pretty tough time because I still have family in India. I was getting calls at any time and you had somebody going to the hospital and sometimes worse yet. So it’s not just from a scientific collaboration perspective, but from a human perspective, I feel the other teams did what they could at the time.
Looking beyond COVID-19, what are the new products that are likely to be launched?
So, let’s take it by platform, right? By instrument and by consumable and hopefully it gives you a comprehensive view of what we’re up to. After many years of not launching new products, we’re at the beginning of a pretty significant introduction of new products.
For liquid chromatography, we introduced the Arc HPLC which is one of the most robust instruments for daily use; for workhorse use in the LC industry. That product was launched roughly a year ago and has really done super well for us. It is the fastest growing new product that we’ve had in a long time in the instrument space.
Now we are trying to reimagine the whole HPLC and UPLC experience. There are a lot of problems that we’re trying to solve. They’re making the HPLC more compact, more user friendly, more robust, and often I’m asked, ‘well, you know, HPLC. It’s been around for a long time, uh, is the industry getting commoditised?’ Well, shame on us If it gets commoditised, there is a lot more to (do) as a market leader. You make the user experience better, and the data analytics more robust. And we are onto it, so stay tuned. I cannot give you a full pipeline on that for obvious reasons, but I can tell you there are problems to solve that we’re all over.
Second, on the mass spec first and then on columns. On mass spec we had completely renewed our tandem quad portfolio in 2019, and that’s done extremely well over the years. But if you look at the tandem quad portfolio, the number one challenge is software and we are working in the late stages of coming up with a robust compliant software.
That likely gets introduced towards the end of the year or early next year.
So far beta testing with customers has really, really shown good promise. I’d say under the year or the next year you start to see it and that should complete our offering on the tandem quad portfolio for mass spectrometry.
Then there is the high resolution mass spec space. We’ll take two examples. The first is what we call our Select Series MRT (multi-reflecting time-of-flight) and there are two introductions here.
One is called Cyclic IMS (ion mobility mass spectrometry). Cyclic was launched sometime last year and it allows you to separate proteins based on confirmation and not just on molecular weight. Mass spec uses molecular weight to separate small and large molecules, but this is the only instrument in the industry now that can separate isomers of the same molecular weight. So that I think is a pretty significant advance. It has been used by collaborators at Boston University and others to look at different confirmations of the surface proteins at the spike proteins of the SARS-CoV-2 virus.
On the Select Series MRT, I would say it is the most powerful mass spec instrument in the industry that operates at high resolution and fast speed. We just announced its introduction a month or so ago and it will start shipping towards the end of the year. It’s called the multireflecting time of flight instrument – MRT for short.
It is an instrument that allows you to do mass spec measurements, which can take very long to get data from in a much shorter period of time. So, 10x to 24x improvement in speed while maintaining the resolution and improving the resolution versus competitive instruments. So we’re very excited about it.
We’ve introduced it in the imaging space for now, so think pathology samples. Sometimes you have to ship them to a pathology lab and that takes days to get the results back. This can happen in a day itself, and if you have the MRT available in your lab, you can do it probably in hours. The second product, which is super exciting is the BioAccord. It’s the only LCMS instrument ready for the QA-QC space to analyse large molecules.
LCMS is the Holy Grail for analysing large molecules in the QA-QC space. This instrument does it fast, it’s robust and its compliance ready. We’ve got some significant initiatives to get it embedded upstream in biologics characterisation and protein mRNA characterisation. Roughly 30 per cent of the sales already are in the mRNA space and 70 per cent are from MABs (monoclonal antibodies) and other large molecules.
To conclude, I’ll talk about our columns. We’re a world leader in coming up with chemistry and physics to separate molecules, using HPLC with our chemistry columns. And we recently introduced a product called Premier. Premier is basically the brand name for a product that has metals coated to prevent affinity of large molecules that have metal binding characteristics.
So many of the large molecules, like mRNAs, like MABs, like other types of proteins, due to their anionic charge, can bind to different metals during separation and that increases the time of separation, as well as reduces the amount of product that you can retain.
With Premier both of those are impacted dramatically. What takes 8 to 10 hours to prepare is ready out of the box. So, you have a huge time savings. It has been the fastest launch in the history of Waters where we’ve introduced hundreds of columns over a 25-30-year history and this is the fastest growth that we’ve ever seen. We’ve taken that technology and now applied it to instruments as well, so all metal surfaces are coated with this proprietary technology.
So, very exciting times for new products for Waters. And I know Anil and the India team are working hard to make sure we do justice to that in India as well. Although they have their hands full right now with responding to the pandemic.
What have been the diversity and inclusion measures at Waters, especially as the pandemic has shown that some categories of employees, like women are more impacted by disruptions like the pandemic?
I would be lying if I said the pandemic has not irreversibly changed how we look at work. It has also amplified some of the challenges we previously had already. I can break it down into three parts. Some things need to be examined carefully before we figure out what’s going to be the future, what the future is going to be like.
I traveled a lot before the pandemic. When I was at Merck KGaA, I was travelling almost every two weeks, given the headquarters was in Germany, and I was based in Boston, the business headquarters.
And I think that’s gone. It’s so great that that’s gone, right? Nobody has to travel 6-8 hours or 14 hours for a one-hour meeting.
The second thing that is irreversible is that we figured out other ways of working that are probably more effective and we should have already adopted them.
We have to be very judicious on what is a convenient solution versus an effective solution, and that work is ongoing. I’ll give you an example. It’s just convenient to work from home for many people, but is it more effective than having a face to face discussion on a difficult topic? And I think while we can be judicious about not having people come to the office all the time, we cannot completely remove it, and that solution can only come once we bring people back and have these workshops and decide what works for Waters in the future environment.
Then the last one, which is what you’ve really asked about. Our family situations have dramatically changed, and I’ll tell you why it’s good and why there are still challenges.
It’s good because everybody had to experience what people who stay at home had to experience.
I give you my own example. When kids went back to school with masks, I did not know how much time and energy is spent taking the kids to school. I was going to work and coming back late in the evening. My wife was following them around. So we divided and conquered.
Now during the pandemic, I learned cooking. I won’t get into why I didn’t know that before and why I wasn’t allowed, but now that I was around at home, I learned how to cook and many, many, many things.
But I think the most important change that occurred in our lives, is that we lost a lot of people. My mother-in-law passed away suddenly in December, not due to COVID, but all of a sudden.
My father-in-law was 88 years old at the time. He lived about six hours away. We immediately brought him to our house and moved him in.
Having an elderly person, who is prone to probably suffering from the greatest impact of the pandemic, living with you, changes your life irreversibly. The decisions that we make in the house are completely different now. We became cautious about who could come in, who couldn’t come in. My parents live also six hours away and it’s the same thing for them.
I know countless people have experienced that, but I think this one created an empathy that many people didn’t have before. And predominantly women were burdened with carrying that
burden.
But now I think everyone understands how that is, and we have to make sure that we take these experiences with us as we come back from the pandemic.
To your question on ‘what are you doing specifically?’ Make sure that we don’t lose these learnings, right?
We’ve asked three things. Number one. They’re not going to travel too much, but we’re going to travel judiciously.
Two, we’re not going to meet all the time face-to-face and drag everybody to work, but we want to make sure that we talk to each otherbefore we come up with a solution.
And number three, having empathy, having compassion for what probably 50 per cent of our community was experiencing now gives us a better understanding of what we can do in the future.
I don’t have an answer for you that says, well, you know we’re going to do this and we are not going to do this. All I can tell you is we’ve asked our top 50-60 people and we meet roughly every two to three weeks by Zoom. Top 50-60 people to first come in three days a week to experience what it is like to come in and manage this new world.
And then bring the rest of our colleagues in two to three days a week and we will stay at two to three days globally. You can imagine how much work that requires to plan who comes in, who doesn’t come in, site occupancy, safety measures which I mentioned earlier.
We would like them to come in. We would like the teams to problem-solve locally and come up with solutions that allow us to balance the new way of existence, which has some significant benefits. But we cannot do it until they come back into the buildings into the new way of working.
So, that’s what we’re doing. I’m sorry I don’t have a magic bullet for you that says everything is going to be fine. It’s a work in progress and we’re happy to talk as we implement. I’m always looking for solutions for my colleagues, and if you have ideas that you saw that companies have implemented, really happy to listen.
viveka.r@expressindia.com
viveka.roy3@gmail.com