MRVI - Earnings call transcript Q4 2020 | Maravai LifeSciences Holdings, Inc.

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Operator

Ladies and gentlemen thank you for standing by and welcome to Maravai LifeSciences Q4, 2020 Earnings Conference Call. At this time all participants are in a listen only mode. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your host Senior Director, Investor Relations, Debra Hart. Madam, you may begin.

Debra Hart

Latif. you, Thank everyone. Good afternoon joining as us quarterly for our on public company. call a earnings Thanks first On we full highlights for will today's and financial Maravai's results call, provide fourth will cover quarter for and guidance year and financial XXXX XXXX. our business

Hull Carl a provide Kevin first our results and business our will review will financial and guidance. CFO, CEO, Our update Herde

remarks. Our answer questions to Carl and president Kevin Eric Tardif the is prepared joining us along with following

regarding our As company the those this statements call the we for that are risk and the during goals a uncertainties cause make business financial to results that reminder forward-looking differ. or to of expectations and may including performance events actual subject

as is these filings Additional change other obligate Today's of are could those press update to factors which in except law. our the information, or that the issued with or comments fully reflect company well and information factors views a release in does described not the as as required concerning more forward-looking these SEC. future itself our events by included result earlier current risk we statements today as commit new

our our GAAP and against today's are results earnings we performance viewed measures Reconciliations During GAAP certain measures results to the on SEC is in be measures posted guidance. call we income, website should EBITDA, also measurements adjusted financial to Maravai to non-GAAP to historical and performance of enable will that per an that this in investors website. the intended discussing available providing the non-GAAP this will call be and press adjusted in and afternoon, net which but alternative be using of benchmark are better The as financial tax release These issued peers. current adjusted included income include of share. we to metrics the expense not

the turn to Carl. call will I Now over

Carl Hull

investors group welcome to moment Thank like I'd to a take newest you Deb our and good of to Maravai. afternoon everyone.

As public you first are earnings announcement Deb a to our have us. said with as we and pleased company this is very

In personal contributions and like the pandemic. together member their team take the us addition, Without meaningful make opportunity battle this each Maravai of to who against extend the my sustained I COVID-XX cell to to of biologic with be Maravai, every to we for efforts to have would speaking them would drug to high and here and you on and positioned A not vaccines reagents therapies, services provide you gene of and markets today. manufacturing. focused and new we growth way those thanks introduction

supplier a commercialization from positioned sector are to companies LifeSciences from the way of products. the solutions that care discovery health to are the other all As clinical of we nicely multiple through benefit early trials affecting to tailwinds

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activation analog a structure for the COVID-XX therapeutics the has vaccines capacity chemical our and successful improved the CleanCap several mRNA an and provides cap CleanCap vaccines. a stability optimizes capping customers reliably a three manufacturing that is CleanCap of substance more to manufacturing our vaccine higher novel yields molecule processes mRNA mRNA CleanCap is large and by quickly. mRNA for CleanCap as quantities high greater of of subsidiary biotechnology body's of RNA, simplified enables Most include drug which of of TriLink expression programs. capping including number of unwanted reductions is system. in of than technology, messenger usable and ways. advantages become therapeutic one co-transcriptional efficiencies produce many of the as Our provided leader to the immune mRNA capping protein well critical supporting synthesis with innate in XX%, the and messenger in to customers itself. large The RNA notably of scale-up

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can mRNA provided CleanCap a into to incorporated and be at also solution customers. GMP custom Finally, grade biopharma vaccine scale our

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diligently of others but continue over continue is opportunity XXXX has You and also infectious all field rapid time. mRNA modality virus believe as the in cell programs pandemic these and the mRNA to and platform along that additional We as of to with vaccines health success applications CleanCap several any for and vaccines the address receive that future. therapeutic vaccines for for vaccines the and only remain a potential a around COVID-XX to efforts modified accelerate RNA significant seasonal disease new to strains are have other boosters vaccination for stripes authorization to assured mRNA vaccine to use The by regulatory can the gene that programs expect therapeutics. of we helped worldwide mRNA of demand be scale use to COVID-XX all validated support manufactures production, vaccine the may as public during the develop multiple intense that and developed not the work of built these programs efforts increase immediate and we'll COVID-XX to in in and messenger flu variants development pandemic years. be of technology for as needed Maravai virus, address in

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the CleanCap therapeutic In pre-clinical addition used their own and also XXX have who have and worked work. research supported our over programs customers to and that utilize CleanCap vaccines technology GMP COVID service we with today

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solidified that our and be are the proprietary supplied Our therefore and reputation long-term of has long-standing We of believe customer only can nature the quality by us. here. our our HCP proprietary antibodies know-how products relationships

Our to growth is as integrated of MockV time acquisition early contribute safety it XXXX the fully testing part will XXXX now we frame. and segment the beginning in biologic expect in

to and our vector tissue provides labeling Turning cell and products laboratories in protein research proteins detecting detection brand samples. for

Our performance for continue characterization patterns samples during for protein recognized the we research. large we to tissue over growing early their years been detection for innovate in and have a assays as expression accurate need XX see of protein and

return lab their by revenue protein last to levels impacted our detection closures and XXXX continue to expect scientists to While XXXX COVID during year full as related laboratories we return business time. to was negatively academics

on briefly the landscape. comment to like I'd M&A Finally

acquiring know, markets by order you and scientific systems, their in our with expand companies people and their strong and built established by investing As growth their then processes in the emerging to business target accelerate our for technologies. foundations application and in we

seek that our meet Going driving stringent will financial substantial forward a continue we between requirements. operational opportunistic organic balance and growth acquisitions and to

ask XXXX and our for Let our in some performance quarter to provide fourth Kevin? Kevin to more detail me now XXXX. cover initial and guidance

Kevin Herde

everyone. Thank you afternoon good Carl and

of company efforts like that the for thank over commitment our through efforts today. and First all have to It's these last and year. and partners we remarks I'd are business the their strong Carl's become we echo employees tireless

of fourth year XXXX full of quarter our review year for financial our financial and the will guidance and full provide results for XXXX. I the Now

of you have fourth our afternoon, the this delivered As XXXX. we release in seen for year financial and performance press both strong full quarter

million XXX.X% revenues growth from represent XXXX. QX XX.X Our reported of QX,

Diego company. with to production We of of increasing year-over-year represents full the capital quality made of our million For million key increase this the of growth. reported nucleic in site revenue important acid dedicated record continue areas to XXX our Operationally automation. portion annual spend year investment prioritize XXXX, investments XXX.X San significant we capacity, production and XX.X% revenue manufacturing in overall a systems we

efforts. meaningfully our continued quality through health enhancing IT and safety long-term our and programs our also have investments to processes, and support in our our supply to in growth and systems We invest systems environmental further infrastructure security, chain global

financial more performance. Now to our insights into overall provide

fueled our As our growth shown quarter and revenue as acid the portion the of Carl nucleic significant mentioned most in fourth for the earlier and release, press year. production business the

total segment the XXXX we full our the nucleic Our acid in support revenue production of was full to the year only the revenue COVID-XX for was XXXX fourth XXXX. quarter represented of second XX.X and the in in XX% for and customers million XX% of the XX% demand compared of of accelerated the company's quarter the Cleancap to year million year for fourth saw XX.X year. showing vaccine the half full

and XX% by in revenue and XX% grew XX.X% in safety quality year in the programs market XX.X% biologic the Elisa QX by development protein testing of for quarter growth company's drug the year. This of business the of cell contributed breadth and and driven high kits. our the biologic the host business ongoing Our full

Our business and full for X% for protein XXXX. year the of detection for accounted quarter the revenue fourth X% of

to of operations. on our moving Now statement

XXX fourth million to of and of full overall before quarter measure is year XX.X non-GAAP income EBITDA net GAAP-based year and from million for Adjusted XXX% interests full was the increase the overall primarily million by asset business. % full million the QX EBITDA was of for QX nucleic adjusted sales XXX.X for driven the increase leverage prior was non-controlling XXXX XX.X quarter the for was XXX million to XX.X increase XX.X improvements This amount our compared XX year for million a year-over-year. this for attributable and for year in million a volume and Our the XXXX XXXX and production margin XXXX.

adjusted XXX totaled at exit and ratio. equivalents net which EBITDA gross XX, times balance a times XXX XXXX. With cash a Our ratio million, debt to metrics million we cash both debt X.X trailing adjusted XXX EBITDA million, adjust debt XXX of the in XX-month year X.X cash with and to EBITDA the GAAP our year-end are long-term December and million

to in actively the million next evaluating opportunities. have while along provide XXX revolver continue that continues the with us see balance flows with cash to to available and we strong a growth our flexibility We talk organic factors sheet I growth credit undrawn also to the with will fuel strategic to XXXX M&A these on make investments combined that for

XXX%. breakouts XXX% continually to our revenues Because the evolving be multiple estimate of choppiness customers of gene directly not we of customers guidance. COVID-XX we demand the vaccine structure was or to $XXX to setting manufacturing reconcile for the this and to Today will through revenues historical with count revenue Because the the range or our of structure forward. at the share cycles, our associated reflecting put that million. moving IPO of back CleanCap supporting inherent November XXXX in that CleanCap million range our their cell as million as estimating $XXX referring our moving million guidance current company to therapy will XXXX and in providing full-year at place $XXX it the restructuring is GAAP is be information UPC to that attributable in as we attempting for stage. Included in EPS well Now with are individual not $XXX quarterly to not are growth at consistent we XXXX

QX, XX% of expect to in total up revenues we QX, over XXXX range XX% total be reported our revenues. However, sequentially XXXX the to

they results EBITDA percentage midpoint diluted share. income adjusted measure interests shares shares margin revenue be attributable fully full range. B count B as the converted class our in Adjusted of adjusted implied EPS any a growth several we for for out is assumption that loss a master largest generally how A establish expected and out forecasts to has and us with revenue is we EPS full rolling XXX in visibility. we non-GAAP XXXX. our assumed under EPS our diluted POs shares. all XXX agreements when fully on of class for EBITDA nucleic therapeutic in class in The months. $X.XX of which based of A on income and fully degree million which for guidance to fully year forecasted quarters share to of been included a shares factors that forecasted the that used to converted of to be XX% the customers have million represents are binding expectations supply is the For to and suites approximately of are GMP funnel an XXXX which several the of range On of programs. non-controlling midpoint in support net go are to applied of per diluted guidance the acid which fully are on or adjusted mainly top background by dated our expect to that shares adjusted non-GAAP XXX eliminate a that $X.XX further revenue our supported customers’ based XXX% of provide range on may our net revenue fully to XXXX forward for diluted the conversion Based builds those result Based the million range these measure Adjusted on good for class at of

XX% our not fully that operations on range certain our to XX%. do effective adjusted are an diluted rate tax adjustments Additionally, EPS based adjusted of including reflect core

had a XX% to like item million and see as item. non-GAAP to this equity-based as note XXXX. QX, adjusted from normal LLC expect also in compensation tied XX get tax XX our to was Interest certain we relates we between units above be the million EBITDA range, XX.X expense XXXX. and I million our amortization certain show reconciling non-cash Now pre-IPO would to compensation Depreciation of the to adjusted equity-based XX and performance-based million GAAP items approximately XX that structure following lastly XX we to in to expense line run which of that for in rate between primarily and non-GAAP million adjustments EBITDA XX% rate it XX million. within the adjusted vesting to results million XXXX the to and

approximately For we estimated to San the XXXX, for X expect including XX of our phase Diego million XX complete to expansion. to million facility last planned invest an capital million expenditures

of success. to in can growth. year the of making the We delivered performance continued see further the organization successfully scaled investments As in we've XXXX our tremendous a including midst support company record you substantial in

the it strength Our continued these of remarks. XXXX overall guidance Carl turn our I'll business now our is a some growth investments, reflection for to of model. final back of view strong and

Carl Hull

Thanks very much Kevin.

booking to provide questions, provide of to we year. seeing for yet, Before to we half we already turn I'd the some wrap while up on XXXX aren't customers like ready and that first perspective level capacity beyond guidance and for very high production are XXXX

as vaccinations to This pressure we selective mentioned As order needed years will partially with COVID-XX direct build leaders an or become It in and should and be continue of of COVID-XX completed our coming new similar strong endemic evolutionary belief immunization suggests continues come emerge of ongoing virus for into CleanCap disease to public industry health have influenza the programs. to book by outlook is multi-pronged Kevin expansion the expect we requiring existing to to seasonal just mRNA market for our XXXX, that interventions. strains to either and created address in that our of additional line to therapeutics. XXXX is that mRNA is grow vaccines nicely with demand the starting to partnerships sight which a

to hopes if of to vaccination now will vaccines and being the to realized be unlikely is science one that effort expect initial high soon. essential interventions. those We Unfortunately, a be continue this done are not anytime relevant very telling our us mRNA that

XX about to aim It's the your all care, for critical We and infections that the health programs communities diagnostics Thanks. infectious months. public apply to comprehensive all viruses, that questions. across diseases, to over back call PPE open to past successfully the in line now COVID-XX eliminate I'd to learned to like now Latif vaccines globe. knowledge in a the turn new time have lot

Operator

Thank [Operator you, comes question first Stanley. Our of Instructions] Tejas line sir. the from Savant of Morgan

question Your please.

Tejas Savant

on Hi evening congrats solid here. out the good guys of performance and the gate

quick So XXX had at XXX seems Carl, you incremental one in question our of doses XX that an million for about to sort doses model. suggest updated guide comes we your the to for or so X.X million That versus billion least XX.

we of is potentially code all, as as you from XX how comments your in goal that well the billion of and versus zip First some so towards upside that end? X BionTech's juxtapose made CureVac if doses the right on should for

Carl Hull

there that Yes. Tejas, vaccine the I are look I to of for question from models think know terms question at it for of the Well unit direction. out us. and dealing and and thanks what consumption of in the revenue dose apples what is do equilibrates with a oranges. We opposite by that we're here the that

customers actually are the from that have books We they we have the us demands. given future for and today at that looking the on orders projections our their

things of like that. output really function a a timing difference book order that model So it's that there between and and is degree and to other both calculations the the the of

tell be buy. customers guiding can our going So able that tell you adequately to those what to reconcile just but we're I'll to you I us never for they're

Tejas Savant

sort endemic Got how should the and question run then on likelihood it. Carl is been terms we've it run of your mean of XX XX, does XX? vaccine in now early normalized comments around and in you've I consumption ongoing that rate mean becoming just XX booster Very in the beyond? and rate nice getting a of the of steady-state had forward in and what days but an obviously think we XX pull it's sort a helpful of CleanCap so ongoing the shot and still virus about for this and for around the there's

Carl Hull

going Yes. to depend Very good It's evolution. on question.

way virus once provided a that something evolves happens that that existing year. then the you're once it could protections the every to are evolves in the As going years. it. escapes be That that that It to in modify have degree happens to could be a something vaccine three

changes don't be know, the going the the vaccine just re-inoculation but frequency catalyst in You that's of programs. and for thus to the

I think have this question is immunity from know durable is be and vaccine. lot completed really whole belts. response vaccine of the but don't other single good, It's the experience immune our issue even yet dose we we waning two-dose to thought don't a how or a a of under

So that will absence the happens ineffective that of perhaps and indicative the is that to the of degree response frequency also inoculations. drive antibodies immune the of repeat

to to see So seem my that honest going every XX answer XX some to you is to I re-inoculation be signaling customers don't and you're our know but we're months. thinking

Tejas Savant

that three deal with to then CleanCap' this quick to demand proofed I here up mean Very one of there helpful future anything I production it. on are unprecedented you opened Got suites you? capacity do one I know the and incremental beyond need you is situation? mean sort how but

Carl Hull

like take you shot Kevin a would that? to at

Kevin Herde

the we made certainly manufacturing we to I'm expansion numerous improvements more Sure. scale. San lot and in large large-scale efficiencies at of efficiencies to, utilization orders a happy here Yes. automation in better Diego that yield, continue certainly waste included see a management CleanCap

than have a through a out pricing nucleic production see capacity that projected little So actually as of comfortable we look billion revenue mix can a we facility. this support the higher for we over at of and acid Diego annually previously now we lens current San our in today dollars

Tejas Savant

any that some Carl And I obviously up the etc. on some still mean launch? early it. Catalan scale the plasma in acquired Delphi, Got competitors, share since you capacity then have invested you DNA guys you Perfect. color can of there have

it like feedback supply the So continues traction? on sounds dis-equilibrium here. customer demand of it's Any early sort

Carl Hull

disequilibrium are even number based growing there. there and on out of programs This the still definitely Yes. is that perhaps

the plasmids produce extremely for customer has to Our to been an capability reaction integrated program. positive the

programs a to the had the have negotiation different soup were actually first sort mid capabilities and to in in exciting couple of place. anticipated over very stages provide of that we the of We that nuts

it's expected or all better. tracking I'd say So as

Tejas Savant

Got it. on Very helpful. guys. evening Thanks here the the quarter so congrats much for this and time

Carl Hull

Thank you.

Operator

Thank you.

comes Sykes from Our next Matthew Sachs. of Goldman question

is open. line Your

Matthew Sykes

the Congrats first quarter on My vaccine and question the thanks regarding mRNA Thank for Great. related was question. work. therapy and my taking you. just non-COVID

a the of programs the just that can vaccine seen IPO about that and terms I'm think little are guys you you've we there other growth the about with, talked involved non-COVID therapy guys in You that bit about work number programs curious mRNA related doing? or those during you're how of

Carl Hull

Sure is a pipeline to points growing delayed seeing last the I pandemic we're been had the due the various programs year. think look and there that of at resumption

we're non-COVID working customers the support additional for but disease, to with our infectious need So vaccines.

expect deficiency, We benefiting to mentioned use here conference mRNA work recently that's being Pfizer mRNA COVID etc. the will acute include those believe or non-COVID platform of from Other done that Many Examples that an orphan seasonal diseases accelerate programs glycogen therapeutic they can conditions see their CleanCap. the their I today. for for that in call products. states these lymphatic, include leukemia, flu are disease disorders, OTC program. vaccine storage of examples rare incorporate

one. those those production That of on of a of disclosed doesn't sponsors there their publicly multiple really programs already we clinic generally majority vast unless field those further happen a continuing comment them is bunch have methods. phase those and So in own number we can't the competitive detailed I have with the applications. in hyper see but the much partnerships of this being

Matthew Sykes

mentioned we purchase in and just on that terms of CureVac wondering how ramp or requires back helpful be baking Great. it to Thanks of a COVID XX for up? I'm number half taking in should expect place you that. vaccine Should of and side. from loaded some orders that at you're on there look the that had growth manufacturing very increase in guide, is orders? just purchase the now when assumptions the sort you It's customers some

Carl Hull

of years with We've to prior program. accelerating would into the just our They're them answer from a close say to That's of public at a obviously the bit about best we their it's working we Let announcements me their with relationship tough good an for pretty those I have how to have excellent probably about think details CuraVac. been efforts. that. relationship. partners number little and because getting COVID-XX onset visibility

So if that beyond. fair in CuraVac's it for I it is accelerate Pfizer see year will in then the like you and to think this to and scales efforts and back expect you totally the first impact relationship year of of half see continue with half the BionTech from the to anything

Matthew Sykes

my and question for on just Thanks biologic safety. that last

past have breadth dynamics have over the guys wondering good generic competitive at in of terms still that of generic in just far competitive yourself good with competitors have. what pretty your and advantage in the the position your some You do that find test or I'm few kit a kit? quarters a all of test above change pretty you

Carl Hull

and programs utilizing as strong and in of No based therapeutic growth our up lot product they targeting COVID-XX that spooling now We're themselves legacy had are relationships. imagine to on business one are a iota. you can they continuing that the new see changed haven't

So it good be seems to in spot. a

Matthew Sykes

it. Great. Appreciate very Thanks much.

Carl Hull

Thank you Matt.

Operator

Thank you.

Our Couillard next of Jefferies. Brandon question from comes

is line open. Your

Brandon Couillard

Good afternoon. thanks. Hi

Carl Hull

Brandon. Hi

Brandon Couillard

the that year the or high we that versus Carl upside a in second progression fairly of about linear us XX the most assume of revenue steer the think and help you consider the outlook and terms first end or in low the with important as we can what should phasing might would through of dollars should we the terms downside toward the you or half outlook? be Kevin half variables

Kevin Herde

Yes.

we quarter XX% XX% QX revenues. think first sequentially I the on total from we're up from as said think to remarks, at a, looking our prepared in I

the as can think get I choppy a start out. little we business to go

So first think as I to keep either. quarter, XXXX of be quarter in see being gating our but but we're quarter we CleanCap CleanCap relates solid to up the now. Certainly the had stage a this quarter at level fourth going it at that moving we for will largest meaningfully first for the don't it quarterly

account into as of for stop that the that stage. prepared the when kind our take as to at vaccine quarterly this range going remarks we're where to and the COVID have we're at we that's gating put far you that CleanCap So looking in customers giving for

Brandon Couillard

you to thinking you you and are speak here online? recently DNA imbalance plasmid the still already on supply here demand the understanding success early capacity could curious launch, additional near will then given potential with term and I'm measure that from about how just you adding very the but Thanks. revenue kind of Got it's suites three the the that and into huge brought

Carl Hull

as conservative Yes project. we look pretty we're

a not only have we plasmid baked of our numbers. revenues XXXX lot DNA into So in

occupied utilization; to I do develops. So time and initial are at as capacity as of to of I the we'll of success potential area and realistically we're think up jobs have it given measure think upside look many that's that's spooling how performing fair going jobs that by success. think the I'm indications as of measure suites But an it's how and the we I how speak interest, and jobs

all it everyone see you true and has continue confirms to just So just further. investments Delphi when that like that of the us things tells heard that plasmid shortages Catalan about be and

Brandon Couillard

Thank you. Super.

Carl Hull

you. Thank

Operator

you. Thank

next Our Larew go Matt of William comes Blair. question from ahead. Please

Carl Hull

Matt. Hey

Matt Larew

good Hi, around wanted M&A. on Carl afternoon to commentary up follow your guys.

but is about plasmid As file much capability this something way that how the etc. in your progressing built is more you labs, thickness to idea leverages established just maybe adding vector infrastructure maturity processing business the organically a the How little building existing you might and you like think accelerating? balance trial demand it how do really versus some with take market this of rapidly scale a time

Carl Hull

a do want you great that's a at take shot to Yes that? Eric question.

Eric Tardif

happy to. Sure, Yes. be

and really activities then the told as to then and as solidifying and shoring our up followed think road capabilities I discussed strategic I have in in So mRNA by we've biologics we've detection. M&A position protein on and do our think past in a lot you with primarily the our rather

finding that M&A that offering buy capacity a what we capacity to When market couldn't just versus at build ultimately frankly our to absolutely capacity the build is more and capabilities. a that's versus provide we those ourselves. complete moves building acquiring be analysis up And at we on so, and in about able capabilities shore pure our of strategic really to do of it capabilities at We comes majority activity that analysis differentiated service that on our build our look and customers. certainly the to and look much pipeline in centered we to look much fill addition we need market is buy, but it factor obviously very time and but we product the to offering

Matt Larew

terms as in but sense thinking Yes. spent That time in talking capacity, obviously you makes are curious up a about up ramp we and infrastructure this spend you're might maybe of you're around XXXX support you customer obviously a seeing and Kevin any the put to can up demand engagement then support, to building too? that helpful be team then about manufacturing the thinking of ramping how just the lot customer extent all that that numbers increased of in help

Carl Hull

right we chain. so that this certainly I'll are touch need top comment wheel can and day stay forecasts supply the to We period changing to customers the on hyper with trusted see offer of we Their Their turn it have close-close day-to-day. that now. then that don't first a and just needs to in be to squeaky that We be need in Kevin. of day Yes, to changing partner anybody's over expansion. be our throughout they are want

have expanding areas; So we that are marketing, etc. all the we in customer support, those resources

on in already future. what more some and expanding obvious We us the on but areas them want to about get that think to desires there's needs are. we will time we can customer, based in We customers’ and near with expressed customers’ have of tighter voice spend better been very

happen will that XXXX. Kevin? during So

Kevin Herde

some SG&A increasing but an think on see I less to certainly basis for investments revenue of absolute growth. continue we those than Yes, expenses

organization I within our in We're scientists our regards we mid we'll public a from input revenue in just of marketing decisions the about in further well percentage a certainly forward. potential to specific increases have the company inform light to well working some organically and hope think we'll to going that programs there help some the high of teens and XXXX. as to for the full think talked with Carl to invest that some on still them as for year support voice relatively R&D expenses and XXXX costs as R&D some see define with marketing will as the of customer I with really

Matt Larew

guys. Thanks sense. That makes

Carl Hull

you. Thank

Operator

from our comes Thank Catherine of Schulte question next Baird. you. And

line Your is open.

Catherine Schulte

patent I how competitors for market if a release Can for last seeing and through first and talk any feel Hi a month you guys you out with therapeutics. you you're had an issue guess new from to questions. increased mRNA-based around the coming excitement CleanCap. thanks perspective press about an vaccines new just IP

Carl Hull

co-transcriptional patent It that's kind it multiple enable position in The point scientific in proprietary further capping patent third the demonstrates that covers Catherine. novel U.S. Yes newest an of issued figuring to the ways think this CleanCap we important technology is out leadership here of and our our here advancements on mRNAs.

the of got that turned large scale manufacturing for So up needs solution operations as it's these they it's that's meets good we've and turned of a sudden out out a customers’ all very important some there mRNA. incredibly

people in believe pretty encourage it that we IP that come and is feeling to we're what's fact and about good us would happening. to first So the

Catherine Schulte

Got have Alright. hard then you acquisition it'd EBITDA of it you be that margins not margin on an type M&A the do adjusted and for to the side, when it diluted. be

walk So that comfortable asset of with? be what when you us requirements would can you those at leverage through type just financial an you're the and kind are looking of

Carl Hull

do that you one? to Eric want Sure.

Eric Tardif

are you Look sure. for right. Yes,

that example math. for find at looking the it's really at targets we would our time. on hard to margins. We doing have over capital and are to margins return think be to that We're margin as calculation I on Certainly, impact the M&A and we're look don't earnings accretive hard when invested beat a our

But trying by engineering are percentage acquiring where financial a we assets of modeling that do really I strategic not we margins now margin or financial to our do, really it's we So is very keeping think calculation assets. on right are. our acquiring target rather mindful than

great address got We've in is in margins. the to might capabilities Kevin strategic of organic one. focus that on and great growth. the have we leverage you M&A Really So terms want

Kevin Herde

about more mean right forward comfortable investments debt million I in be with. asset over and feel EBITDA position organic take undrawn our one for times just M&A. that's act XXX certainly for hand XXXX with on some on like a liquidity projected very or Obviously looking to We the net in in to puts lines immediate with if to quickly net through assess needed We either more our and with debt also leverage that revolver. our our adjusted can product we're cash our we Sure. something us in XXXX.

the So us. our sheet we affords flexibility balance like that

Catherine Schulte

Great. you. Thank

Carl Hull

Thank you.

Operator

you. Thank

of Our Credit Sussie. comes next Wright from question Erin

line open. Your is

Erin Wright

Great. Thanks.

So from the the visibility on or CleanCap of may again you to you relative from pavements vaccine assumed of maybe to CleanCap? outside Pfizer-COVID other and or sort or mentioned relationships would other guide in the or of on changes clarify others that and help your revenue of and factors does that what's level to there with is but just be considering in frame been just meaningful underlying the recognition high any conservatives been and there numbers guidance has trying factors out those publicly or CleanCap disclosed relationships I'm Pfizer reconcile revenue timing us contribution

Carl Hull

that are digesting Yes and we all full and a our do fairly of what and combined a and Let there contribute is conservative I just can outside other them what of projection do Pfizer, hit estimates are eyed the they to know, we sort probability number we me systematic confidence are in we points of sandbag with We could do our order. realistic of particular that go through together our materially so to CleanCap what for you way in reverse forecast. don't year tend up wrong put them we but considerable see be of gambling maybe data coming forecast, if and relationships go those of in intentionally. fact degree of and those right about when

think but the being out we nary same time and we chance what us of we realistic putting won't see stars a moon meeting, today. that's know have You we're at on something that the based

daily change does I like qualifier one on to you the seems would it that the Now basis. sometimes is a offer situation

multiple based are as particular being at go they So a supply in problem gives all on are child they can their that not chains I problem our what involved a customers it other here need and you to that that out constraint that Once chains place. with they and imagine looking supply that and next constrained being move and projections is be constraint it fix on are at the child. vendors complex think what to our customer being look rethink they as and is problem figuring the objective is

Erin Wright

potentially fair XXXX you and seeing or how mentioned and related work you're across it largely shaping what the to you That's COVID front your things curious board. is then of covered that outside on that front. up remarks up I'm is shake here nicely are on or referring

Carl Hull

One work vaccinations enduring. that the reflects that needed be is they is there two will It will the just related sentiment and repeat growing and COVID be that elements. Yes.

as known a even the of of recently the in be may XXXX greater gives ago that So I four opportunity months was think degree the us as time IPO. well what versus what confidence at

obviously significantly because timelines that into bunch second and as not pipeline. timeline better a and understanding that programs like these The accelerated. super well. are contributor look therapeutic in play on our there XXXX is they resume Those of the programs just development These the come resumed COVID would be of these

Erin Wright

Okay. Great. Thank you.

Carl Hull

you. Thank

Operator

Thank you.

Our Brennan of Dan next question UBS. comes from

Your line open. is

Dan Brennan

the capacity taking know Did earlier CleanCap? I question what you. was, call? you in your is asked Thanks it was the COVID earlier on doses first that question. for Great. for My Thank disclose

Carl Hull

is that revenue and annual support did not. Kevin ability more comfortable billion that. feel We indicated dollars that a our with to CleanCap in we over produce on comfortable

Dan Brennan

it. Got

I mind, when was there. dosing is years annual I with regimen we all the today at the were kind the which looking variants of to output and the where out guess, thinking centered company an of now then the on XX if thinking we were time about don't out Okay back in or you believe we're getting

maybe the outlook. So just XX follow-up another on

how hand in progressing. are given you just frame any we hard you when outcomes mean you're the could pleased maybe range would that with or some sense of talk give orders please Could to see committed of about what in XX. the So it's things us pleased

without outlook? trying that get number So how about to a specific directionally giving to we think XX

Carl Hull

to into the number down variant you come and you to expedited is of we there the a arms. who then have a that and to Yes. delta there dominant potential in are required specific it end path authorized from for people's the one. the a of underlying changes realizing And or thinking going depending how at be globally you going fast one x-date, the vaccinated. breaking of going know been modification product are, change of doses true a to by existing that two yet sequence then, not to get being a but a not is the into vaccine the could completely areas. recognizing and becoming one vaccinated projecting now are see have where of Realistically, that that looks those vaccines on One like to Look is variant we about the the that's change of roll-out are going or tough new haven't vaccine globe we're you have an I kind and people on if alluded it. regulators

other the dose. that's the as a Pfizer yet it and is one and impact So elements the third element study approach announced their of other just are of of BionTech then or

to two those to variance and driving with dosage in does what boosters potential initial XXXX that and response things immune are your beyond. So do demand the that are

Dan Brennan

XX maybe the your we just vaccines. Could thinking the should give the given a steady then about interest transformation in growth us of kind rate talked state be and call A, you. opportunity this baked would COVID a I you how you related XX if non- think so class in like nucleic normalized over non-COVID like base a Thank mRNA the mRNA? of of for far about there think, what acid business opportunities what the kind characterize of how and just success it mRNA we Great B, sense is tremendous you just you beyond about

Carl Hull

to you at that shot take do want you Kevin to? or me want a

Kevin Herde

in the look guidance that's think CleanCap related from growing our business CleanCap that of and Yes, of that's in being and perform the Carl COVID-XX virus roughly grower consistent low market three at particularly our single the where acid the the vaccine you you protein from midpoint look market business midpoints and the segments XX% a I nucleic COVID very and biologics given been perspective. the with I digit of think detection some a vaccine see then you across underlying production remaining we've the business the seeing and when at certainly impact revenues we trends excluding particularly

Dan Brennan

because historically XX, XX% and the And that I XX, acid grew business XX know nucleic XX.

Maravai? excitement success number and efficacy given about specific far above am might do just of opportunity think and for how certainly means and has without So we the think wondering that and the I I what we transformational mean how giving as about it growth rate level so a just we mRNA look out been this just

Carl Hull

you the the look was you of think do talking and would is historical COVID about have and Kevin for numbers this I the there was rest blend related I Well, units purposes. XX% those the remember to different that albeit say look in that business of numbers a CleanCap three not when on at the that

mid-XXs included have of business That growth be some increase. we a stuff will the be bit I little we've IPO would spelled expect this the a think out a I and that our that time that how So of XX% it's would thought that little rate CleanCap Sam acid I come and apples with it market in bit to large in the go up other the the at nucleic also oranges. and of higher about areas. broader but a and than say outside this do and we'd all may think pretty is carefully of Sam

Dan Brennan

Great. Thank you.

Carl Hull

it. Appreciate you. Thank

Operator

you. Thank

of comes next Ryskin Bank Our Michael question from America. of

question please. Your

Michael Ryskin

question. wondering success just terms have last sort the words end lot other BionTech, over attention months thanks BionTech's has your broader a CleanCap, obviously curious taking want the the ask mean squeezing the technology, a other you've term picture aren't even I'm biotech the a in. a cycle in of programs a you I'm with has the have mRNA I beyond go adoption if three, penetrate some prominent I customers? and and more Thanks to a I for technology? long of at just me big but into want longer CureVac Pfizer, very already I customers are more and number some capping for are So pharma of these but I'm program the to we that opportunities into just ability with realize lot to guess be one become working once six dominant your CleanCap been on number growth the of adoption as leaders with will to method Hi new for I wondering existing that vaccine covered, back in in you, and but this basis of whether CleanCap customers? disclosed space. leading in it's then? penetration future in a just therapeutics Pfizer, utilizing you're there even other others more steps of prominent of topics taken it's gotten

Carl Hull

new and is point. That some related work the very in to important and Look because caught Yes. have we our therapeutic ongoing own us their that's of programs early development vaccine have number a come early. of of customers a seen now them involvement

the market phase change it's early awareness there's plans CleanCap methods. of early not aggressively their greater of a enough think we so part that to and of your marketing disruptive a companies utilizing I work own are capabilities our So and benefits as to

a to change they're be anybody nobody re-registration change side that a change alternative a the enzymatic would they going which using making keep big not so It mRNA method demand. they're the CleanCap fairness in using when COVID-XX to overnight. you capping and at vaccines other Now who's here, can is with if very-very just and time of anything to wants is up

methodologies not we're from vaccine see us. change or to So expecting towards either us away programs

Michael Ryskin

Thank All you. right.

Carl Hull

one for have think. you. Thank Appreciate I Yes more it. time we question

Operator

Okay.

question Arias next from of line the comes of Daniel Our Stifel.

is Your open. line

Carl Hull

Hey Dan.

Daniel Arias

getting of curious small I'm ask Hey thanks me wanted about to for to there? for CleanCap the vaccines from capacity If molecule order the out correctly sort and in both you need Hi borrow whether you on for I guys. just to the Thanks. where side to you found Carl small that or here. I was to in in expansion you get January. needed remember molecule build were be able

Carl Hull

work use we CleanCap for relatively that lines other The Yes. and fungible. molecule are small

in can them this other on to So one distinct that first the pay demand are which Paul Peter in we haven't from move requires, the thing quarter came is plasmid the we so robbed we sweep that entirely as online this.

Daniel Arias

If I could speak one more in.

Carl Hull

Sure.

Daniel Arias

six ones It think in we’re as the about Last there. process could out vaccine that like sitting were year when of locked you be there additional mRNA there going providers I had others of sort sort three and that through there we sounds potentials. being were with just talked

if sort customers wondering firmly lies committed of just to you on of be us at the where that update willing So tally would moment?

Carl Hull

We we tally say and representative but there's where no makes changes program significant disclose future a I point going think have that at now. right is that still a on of would probably material major we'd if what's developments that progress,

Daniel Arias

Okay. Very good thank you.

Carl Hull

very much. appreciate you thank right We it. All

Operator

Thank this back Debra call turn the time Hart closing to like over remarks. I'd At you. to Madam? for

Debra Hart

KeyBanc be via be on March Capital for at we'll Cowen live March the Conference the and can today. tomorrow Relations joining or at everyone Both we'll also to let participating and us forum want Investor from Thanks you. the Thank Tech XX. I replay accessed be Healthcare investor Med Great. Markets/LifeScience presentations website. X, did Maravai

So feel to with forward you during free look Thank any updating to and of contact me you. XXXX. course we questions the

Operator

Ladies Thank and concludes participating. gentlemen conference this today's for call. you

disconnect. You may now

Maravai LifeSciences (MRVI) 3 Mar 212020 Q4 Earnings call transcript