We have a broad portfolio of products which has driven into two main areas, bioprocessing and research serving academics and pharmaceutical customers and diagnostics, aimed primarily at clinicians.
For biopharma manufacturing, we have a leading global franchise built on a portfolio of products we acquired with the Amersham acquisition in 2004 and we’ve continued to build value through successful R&D investments and a series of strategic deals resulting in a comprehensive offering that enables start to finish solutions for production.
This start to finish solution creates productivity opportunities for our customers and I’ll return to that later.
Our Research & Applied Markets business has a series of strong brands for protein characterization, purification and analysis, critical to the discovery of these new medicines, once selected, these consumables remain embedded in the scale of drug all the way to an FDA approved manufacturing process.
Within the Diagnostics business, we are the global leader in contrast agents used across the spectrum of diagnostic imaging, including X-ray, MRI and nuclear medicines. We supply customers through a global network of large-scale low-cost manufacturing facilities.
With novel in vitro technologies developed at the GERC we have expanded our service offering to allow researchers to better understand the underlying biology of diseases, which of course in turn reaches the development of the new precision medicines which we then help to manufacture.
And that brings me on to how critical we are to the biopharmaceutical manufacturing industry. Over the past six years, biological medicine sales have grown a 10% per annum to $170 billion, due primarily to the expansion of molecular antibody for the treatment of cancer and increasing demand for products like insulin. Our hardware and consumables are embedded in the FDA approved manufacturing process of these products.
This manufacture of biologics is completely different to the industrial process for making traditional chemical-based medicine. It requires cells to grow, to produce specific protein, which are then extracted and purified. This is an $8 billion market where have got the leading position, all starting from the pharmacy chromatography platform which was part of Amersham.
We continue to build on this products and service platform organically as well as through deals, moving upstream with a series of acquisitions such as WAVE and Xcellerex, which added fomenters and disposable technologies to the portfolio and recently, HyClone Cell Media, part of the $1 billion acquisition from Thermo Fisher. This creates the start to finish solution I referred to earlier.
We enjoyed close strategic partnerships with the leading pharmaceutical companies who depend on us for reliable, high quality supply. The move to biological medicines that has driven double-digit growth over the past few years will continue as expansion in Asia creates new demand for manufacturing capacity.
We are uniquely positioned to help in this expansion or for global pharma companies wanting to localize production in new markets and for local manufacturers wanting to establish domestic production of crucial medicine.
We effectively partner to deliver factory interface solutions. Our FlexFactory and KUBio solutions can provide a complete factory in less than half the time required for traditional plants, 36 months to less than 18 and at a fraction of the costs.
Essentially, we provide a faster and more cost-effective way of creating capacity and access to the emerging markets.
Lastly, we are investing in the cells therapy or regenerative medicine space. An example of this would be the creation of cells for example robust IVDs. The bottleneck right now in this industry is to move from research of small-scale to industrial-scale production and this is an area where we can bring our bioprocessing tools and expertise to enable this revolutionary change in medicine.
It’s an emerging market where we have low revenues today, but we see it having the potential to create $1 billion in the future.
In summary, the Life Sciences business is a high margin, high quality growth business within GE. We are a trusted supplier for the pharmaceutical industry for biopharmaceutical research and manufacturing.
GE Healthcare’s deep relationships with hospitals provides greater access for sales growth and diagnostic and research products. We leverage GE’s great strength in research and analytics from the global research and our software center in San Ramon. We use the global operations and commercial teams across the world to sell into emerging markets.
This is a business where in 2014 we are delivering strong growth, especially in bioprocessing with margins expanding by 100 basis points through business integration and organizations and litigations. And we are generating in excess of $1 billion free cash flow.
Overall, the dealer turn for this business is in the low teens. This is a growing and valuable business within GE and we continue to see healthy pipeline and have great confidence in the future growth of the business. And now I would like to hand over to Jeff Bornstein.
Thanks, Kieran. I’ll start with the third quarter summary. We had revenues of $36.2 billion, up 1% from the third quarter of 2013. Industrial sales of $26 billion were up 3% and GE Capital revenues of $10.5 billion were down 1%.
Operating earnings of $3.8 billion were up 3% in the quarter. Operational earnings per share of $0.38 were up 6%, continuing EPS of $0.34 includes the impact of non-operating pension and net EPS includes the impact of discontinued operations. With a small benefit in discontinued operations this quarter associated with touring of taxes on the Grey Zone payment.