MRVI - Earnings call transcript Q1 2021 | Maravai LifeSciences Holdings, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Q1 2021 Maravai LifeSciences Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Deb Hart. Please go ahead.

Deb Hart

Thank you, Mary. everyone. afternoon, Good us joining first XXXX quarter Thanks on call. earnings for our

under that and and call investors.maravai.com financial Results. results release we cover press highlights provide we accompany today’s are Information, call, On the at and website Our XXXX. our our updated slides today’s financial will for Quarterly on are available and business Financial will posted guidance

of financial on you Kevin that questions. can would those see call risks Slide to and our company, uncertainties with remind you will goals business you are that for business will the and provide statements events actual may to differ. X, like we during As first performance this On expectations to we Then and a update review up regarding we will results forward-looking or the our call, guidance. Carl results including Slide open that subject and the X, your cause financial make the for

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

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

Now, the to Carl. turn I call over will

Carl Hull

everyone. take to you, newest participated like Deb in and a of would company’s offering in I moment investors to group welcome which good April. Well, afternoon the our recent follow-on closed thank who

pleased very have are with to today. We us you

with high will I who Maravai and would each addition, the start opportunity shortly extend to of every execute personal #X, In like continue If this thanks team take see. we Slide you to level, member as an incredibly could to my at to as with we Today, our profitable revenue, we XXX% very largest strong formally quarter had to most XXXX shared and prior last the up XX% to compared in year million in a sequentially over pre-announcement, growing reported the start our $XXX.X Maravai and quarter. in history.

you results top cash the end contributed and seeing also some record and color first of year. provide to earnings the with I the are outstanding performance EBITDA, markets thoughts and share line across through walk some remainder then Kevin flow our Our generation. of for we additional our on our geographies, will and will quarter trends per free

mRNA of the continues our CleanCap X, services vaccines, effectiveness. revenues for due incredibly are commercially we to Nucleic clinically we Maravai. to Production Turning for and for successful what question our future asked is business, assess platform and flexibility, durability an how and and themselves; to the CleanCap COVID-XX continues scalability holds be Acid messenger CleanCap manufacturing in in custom constantly is its One Slide GMP demand now to RNA reagents areas: constructs. established all accelerate mRNA

to some our of you try very with latest share thinking. address this me Let upfront and

needed belief come been eased for that last new have emerged completed said it in measures to I strains preventative and partially pressure of in to order our intensified countries is immunization by the have programs. virus be is numerous years as the vaccinations to that continue many As quarter, as virus COVID-XX on address evolutionary will selective

efficacy endemic COVID-XX expect dissimilar not influenza that public require we And types currently to not essential to interventions. for these of the been authorized. today of will widespread disease, has equaled continuing mRNA an We years other become COVID-XX interventions be of fully vaccinations by part an RNA to clinical ongoing use of The vaccines that of in expect vaccines messenger reoccurring any come. both health the will

about physician, and of COVID-XX that a demand mRNA are doses immunity President, have European XXXX. over billion and and over recently contract for a in successfully It enhance vaccines also von the the usage said in governmental a that first-generation XXXX further Regulatory vaccines were as worth. concluded profiles. weekend, all X.X of throughout point. vaccine unfounded, concerns, generations market seems a of alternative the offering in the this pediatric offer of of protection announcement women, in underway. held late proven case global additional Those messenger clear Ursula Leyen, the was Pfizer either groups The by to quote fact, focus also that of negotiations booster delivery against deliver COVAX, herself emerging patients own EU ultimate are multiyear variants for I programs vaccines modalities vaccine need This across appear the will development clear negotiations and largest single authorization beginning mRNA authority vaccine their pregnant further to however In population, in new XXXX as beyond by XXXX. with resulting adolescents, through well and that period. Commission with vaccine or safety expand that increase to we past share RNA der initial their followed of vaccine the the as doses such technologies vaccines, imminent on will expectations contend examples, vaccines

own for CleanCap that now increasing see Pfizer also mRNA tailwinds originally as other us use concurrent XXXX capacity We multiple manufacturing, to our XXXX. own to COVID-XX and receive believe These done. among vaccines customers authorizations full-scale their expected customers’ cause ramp was up emergency what customers likely as our those anticipate just demand and XXXX already mRNA in in as have beyond COVID-XX vaccine is well expand for BioNTech

facility in scheduled capacity COVID-XX of Beyontec dose million of will in XXXX. the Friday, For of Maravai specifically, recent And China COVID-XX announced as this that strong vaccines. up a that is to also to XXXX in our joint from manufacturing earnings Beyontec increase dose existing their Pfizer’s billion be then And capacity their reach X for doses with a now an demand expand XXXX begin – capable in further just plant each Shanghai existing call, build Bourla X internal morning, doses in vaccine even it XXXX that CleanCap to venture a from billion in formation projections. letter to Singapore, we indicating expect released in producing during Albert able confirmed their billion operations to XXXX. stated to continued and objective expansion this they capacity a Pfizer $XXX XXXX X expected X to and Pharma XXXX, to in of announced Fosun last year. X billion build billion Yesterday, produce XX% manufacturing doses they manufacture customers dramatically open

confidence the see can demand beyond we CleanCap deal see, this we year great you largest have and from year, As in growing for our of a next will customers.

raised seasonal to infectious guidance are make In as capabilities vaccines last other The represents expand some such exists that increased anti-virals. vaccine several addition, week such investment its immunotherapies is infrastructure development that rapidly development has accelerating. applications race now HIV begun. messenger influenza, RNA and COVID-XX direct mRNA clearly its for experts of platform mRNA variants the targets, projecting the reflect More editing mRNA new therapeutic vaccine efforts. advanced CAR-T as and use vaccines into future the Pfizer and investment in and of for in or cell include to spending by million malaria a mRNA-based therapies. programs cancer industry global already an COVID more, or in now gene expertise for additional flu Immunooncology XXXX disease technology beyond as for further R&D COVID-XX and $XXX

of programs activity of were clinical of therapeutics high-value other therapies clinical hold replacement enzyme early-stage addressed Many areas. on earliest our for Some resuming needs these to and mRNA the a glycogen put are the unmet number now these in of applications and due storage disorders. pandemic, customers

other menu the to Nucleic due Cygnus Biologics our customers to products, our Maravai’s to our the complement to ELISA in for out the biologics kit categories strong in process. gold Acid In test quarter our Now, and all product when and Slide brand standard kits wholesale of reputation of choose our other portfolio. custom and detection to business, Safety as comes from round We businesses assays, Testing it protein impurities breadth addition detecting during generic the kits. saw turning demand manufacturing X, impurity our

an Safety increased revenues XX.X% were high products at prior quarter all-time our First the for year. Biologics and from Testing

Detection revenue and prior the X% saw driven year Protein business custom business. Our versus catalog by growth our both

and levels resumed sales work. back reopened and labs as We historical have new to are discovery research pre-COVID development

briefly to I the M&A comment like on Finally, would landscape.

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

And X, forward, driving to balance detail operational stringent provide substantial for requirements. will that Slide with XXXX. to some our guidance meet in organic I now QX Kevin? and financial seek now updated continue performance growth between will our Going on ask our moving to our Kevin we acquisitions cover a to and opportunistic

Kevin Herde

I XXXX. our everyone. the for first Thank full you, year financial am good to quarter revised review and of to results and the provide Carl financial happy guidance afternoon our for

represented our you afternoon, record our to of of revenues XXX% press release XXXX. in presentation, X Turning QX our million have growth this Slide QX $XXX.X from seen reported as

interests attributable GAAP-based the was first Our non-controlling of million the XXXX. income amount quarter $XX.X for net before to

million XX% XX, $XX.X compared measure, from of and This million in to quarterly XXXX XXXX. the sequential Moving a to a XXX% QX and QX. increase million was Slide fourth $XX.X adjusted a quarter non-GAAP $XXX.X most QX EBITDA, for increase recent for year-over-year represents

EPS business. our to diluted XXXX. we EPS. the Acid Slide GAAP was the result volume is present to sales Our net increases Class average The QX EBITDA diluted up the margin was On recent QX driven most EPS, increase and from basic adjusted A both by XX% in overall in attributable Class XX, primarily Production shares divided fully shares. and improvements by adjusted weighted XX%, margin and income EBITDA our XXXX XX% from fully A in Nucleic EPS Basic

B Class divided for income, by were average was B Our EPS income Class dilutive average basic securities equals adjusted fully prior GAAP share. our as weighted other awards. dilutive such diluted net $X.XX EPS diluted net fully both weighted and Both interests, Class A the non-controlling quarter divided A for equity other adjusted securities. equals to first both per shares and the EPS diluted by and Adjusted and diluted the while of EPS fully $X.XX, and shares

Moving we balance have continue strong and to a to Slide sheet XX, cash flows.

which GAAP cash XXXX. million equivalents, at totaled cash are Our March XX, $XXX metrics, and

is Our a quarter performance free cash as million. define the flow of cash non-GAAP flow led EBITDA we measure a less expenditures. capital EBITDA that adjusted Adjusted strong for adjusted robust to free $XX

at of debt, ratio with $XXX ratio. cash EBITDA long-term a in EBITDA net X.Xx about in gross a million So $XXX debt-to-adjusted sit EBITDA X.Xx and adjusted debt-to-adjusted million trailing and million, we $XXX.X XX-month

some Now, performance financial segment insights to quarter for to business XX. Slide more our turning into provide the

vaccine the XX% the first Nucleic fueled revenue Production in increasing As our $XX.X business state-of-the-art Production XXXX, and customers in in portion adjusted for margin our total were revenue and of Acid EBITDA first XXXX. San Carl generated a the Acid quarter CleanCap Production reflects quarter growth of million manufacturing approximately well The major the and represented gains EBITDA our quarter. in $XX Acid adjusted efficiencies is in from as record of increase margin QX million most XX% the for company’s business earlier, mentioned revenues a the Diego this Nucleic from of the productivity our of as significant value COVID-XX XX% facility. the from quarter. Nucleic the sequential unique products

business Testing the of quarter. company’s in first contributed Biologics Our the revenue Safety XX%

from customers to representing growth of comprise products, This business, grew from drug record segment’s virtually quality of saw Our in was our by bovine cell HEK growth million used growth number and biosimilar which and biosimilar gene strong the endonuclease programs coli development increasing a attributable QX contributions new the Cygnus-branded ELISA the serum breadth of our driven well quarter kits. vaccine This quarter, strong used quarter as the biologics to host-cell $XX.X as as XX% and gained a in therapy and all as programs our and high included in offerings. we protein products the kits albumin, from of E. in well Further, programs. increasing for XXXX. BSA,

the EBITDA Our Biologics Safety $XX.X delivered million quarter. Testing in of business adjusted

our Our segment our in each represented first X% adjusted EBITDA. part the that to in different revenues in public of the Maravai-level QX rates expenses cost-effective totals and quarter, manner. to Protein costs increasing for growth most our included levels that million for smaller other in Corporate we $X.X from X% Detection continued business, support not due million based overall the back-office marketing and of of just accounting our EBITDA centralize a I of on the $XX.X only the of investments support businesses mainly company our efforts business, quarter and discussed adjusted XXXX businesses, just in are were

increase supporting in annual XXXX business. our total up moving XXXX of $XXX are already to guidance the new segments estimate our of That, with customer revenues across bullish Testing our for directly vaccine guidance $XXX on reflects This guidance, dynamics up major CleanCap million which million business we to COVID-XX to million see at growth wins for million, million, million segment our of that repeat fueling estimating year to to Slide and this million Biologics of range geographies, full continue year from guidance. clearly Safety from the outlook raising midpoint. this last biologics. $XXX base our $XXX customers, that we $XX at attributable and XXXX. for we updated Included solid quarter prior the our XX% at midpoint XXXX more customers, build business, our for combined million, global the strong full Now, to prior revenue in our growth market is off expectation XXXX our in are $XX $XXX revenue the guidance Coming today, a to $XXX record for XX

growing by returned off lower We also as has see pre-pandemic business totals. Detection XX% base revenue year this Protein XXXX to this the quarterly

really the will for for COVID-XX be math, our jump $XXX Production at good Nucleic to of the what of of XXXX. in the I guidance to the this $XXX you Nucleic implies our year, this shaping is listening business. around to that million all represent call Now since are total the you versus subtracting Also, which Production midpoint This for Acid segment be roughly XX% will that at business Nucleic would straight CleanCap implies revenue see midpoint Acid growth revenues up over XXXX. base guidance, comparable million will Acid

players traction cell to base and as momentum major gene non-COVID good customer mRNA outside COVID-XX orders of growth. represents vaccine exciting our well therapy development. blue-chip rapid from as see strong coming opportunities. to the continue demand of across initial CleanCap validation development fueling our a segment and for companies Furthermore, of platform long-term mid here, is The offerings We with including

the We are mRNA role for contributor we and here, new to platforms key about very extremely a busy future. are our foreseeable excited as these

our of products, We other exciting for platforms. really to we growth as for number of that As long-term particularly these mRNA-based some for Maravai. Nucleic Carl growing a in the prospects continue see being interest mentioned, Acid see

will be continually evolving at choppiness revenues development as cell inherent gene supporting CleanCap because not turning spaces, estimates quarterly as well the we of customers and to revenues, gating our for demand providing through this in of their therapy stage. Now, quarterly the for the

as the quarter see orders of continue rollout do expanding being our QX we book a from primarily However, up second and grow commercial result customers’ that major vaccines. meaningfully based successes global of CleanCap our the of on to

address currently are Maravai to to of be global forecasts we these for We accurate all CleanCap customers revenues total least from QX and quarter working for project record most levels. our demands, our current second forecast develop over closely the up Given all of fluidity XX% the to with size vaccine at possible.

degree is in funnel based our several that are part are several As shorter out for GMP call, used that, may last term by top large and extend to customers’ guidance on on further in the rolling our POs, for suites, which discussed have forecasted forecast for our which quarters out a largest our revenue supported factors, months. On key considerable mainly and builds our Based on we but binding go of revenue subject with have Based fluctuations. forward XXXX metrics. fluctuations, some internal those support guidance forecast have fiscal we other to guidance visibility these in for year acid programs. we a quarterly our updated financial will of nucleic for expectations customers’ be therapeutics – our revenue on comes our

our to EBITDA, non-GAAP our to focused implied that $X.XX our some $XXX growth lower reinforce non-GAAP the margins which, of EBITDA million slightly and diluted Adjusted represents the at range our the our since to of be EPS, recently fully per reflects to than to midpoint reported of million, growth. support investment adjusted in of adjusted revenue of ability at level to nearly range, measure, range mostly long-term of business percentage organic be the share. is expect continually midpoint non-GAAP expected We of This in in a it $X.XX $XXX margin range. a measure, XX% is margin EBITDA XXX%

count income share a to on for all shares, shares. Slide year as full B interests adjusted fully has income is fully a assumption included A non-controlling the results loss attributable net to diluted diluted adjusted been shares Class eliminate A any the result Class diluted Moving EPS of to Class The the an shares to Class net of converted which that XXX are million XXXX. EPS XX, adjusted conversion based B of forecasted fully assumed full or of to in in

adjusted XX% fully reflecting the based EPS, base. certain are on diluted tax to the our our on operations, effective tax rate an growing adjustments forecast distribution of geographical of based reflect do not core Additionally, including some improvement effective rate our that adjusted XX%, revenue

and and non-GAAP rate relates tax of adjusted an to XX%; the we as and million $XX non-GAAP EBITDA, to to equity-based to see item for $XX XXXX: million; compensation, capital our million; from XXXX; $XX million other interest approximately in to million and $XX be which depreciation following of we reconciling range, EBITDA to XX% get GAAP expense needed it between certain As $XX in million X.X% adjustments adjusted $XX items to amortization million also $XX revenues. million which show of invest estimated an total to expenditures, $XX a we for expect XXXX, to between is

to Our our EBITDA to reconciliation income from adjusted press EBITDA EBITDA presented net of release. GAAP is and GAAP in

to In in will the addition, XX-Q, detailed our coming in information which be days. our segment-related Form file we plan

great to to committed incredibly continue are support Lastly, Maravai to enabling service our sciences. gratitude express to personal in the quality to advances are be life such vendors I that like and numerous with all our my part to overarching of employees, that products continue mission and of to providers them a customers would contributions make great such

Carl remarks. final you your will I thank support today. your to for Maravai. now, back for you time it of So, turn some And Thank for

Carl Hull

Thank you, Kevin.

this medicine. moves customer start development momentum an the So XX, entire is all a in strong We the mRNA XXXX Maravai. global first company. across and of our momentum very that in as feel year we incredibly up is as off forefront about clear modern wrap to seeing full to to good we’re are our base public It across with Slide building of research

into book our strong We in of And have for coming of expansion is nicely, industry partnerships XXXX, of XXXX a sight vaccines direct outlook and leaders existing market continues line our building additional therapeutics. CleanCap mRNA demand with with mRNA which the to the grow. to with

waiver of to of reports news, position the guidance throughout in in seeing vaccine potential week about we are first to state The is promote ensure can. a calls last more the of as the rights we we While vaccines on committed late some, the is globally as And fully of have to booking is half that that vaccines. capacity with and to been to COVID-XX provide partners even inbound still XXXX, intellectual of year. already more more supportive effort of the working rapidly. a receiving all breaking customers unspecified, production quickly our of yet access broad and widespread production property and for of as aren’t government category concerning U.S. end the intent of the doses number Maravai global availability we this of current

In Japan, based and for note production fact, vaccine availability Thailand programs capping our that mRNA been partners. we has of We already. are by our never China factor a Europe, the supplying would reagents vaccine of the in U.S., rate-limiting any

and require quoted ultimately XXX a of take Tai, WTO. statement that While will what Representative we consensus as prepared in last is was those on any our time. administration the Biden this Trade any negotiations among at the details take the don’t negotiations unanimous the will saying, understanding World about week will direct to is time issue Ambassador members Trade know support U.S. the Organization, yet

equipment A different that XX demands recently spokesperson mRNA-based vaccine meaningfully suppliers scale. technology millions countries. the vaccines that It be of between long of the over set will access do waivers highly time, global and their element of might time-intensive to to is transfers waivers a the We complex raw of critical and complex of IP requirements next have and While Pfizer short in expand the X also vaccines components absolutely at ingredients needed COVID-XX only for from supplying more the so those of and that believe and potential discussed vaccine years. consistently and quality manufacturing to Making them not demonstrated may hundreds vaccines doses enable is partners diverse and a of vaccines IP requires are to specialized whoever company’s which have produce of and supply a in one of mRNA-based producing networks. being supply the and personnel, supply XX the the set period safely. XXX both of noted capabilities suppliers in global expertise

cancer, now of With the developing the increased role proud believe of raging channels complex in corners particularly playing and we open the productive the transformative vaccines unvaccinated that biologics human key therapies to world, pandemic only that questions. investment impact production And global take. of on the still the Maravai, for battling to can customers, is today, that I at the employees partners health and line in is From manufacturers to mRNA our for over your happen. will turn the back in vaccines call gene have accelerating. these proven we, the Mary? Mary would capacity most of are like COVID-XX making distribution and to step policymakers that the influenza, to cell are

Operator

comes from Stanley. Instructions] question Your from Tejas line first the of [Operator Savant Morgan

open. now is line Your

Tejas Savant

Carl, guys. Hey, guidance here. what’s question morning. included one opening Good of revised versus your in would upside what terms just to represent for you

vaccinations, issued So, in pregnant your the apparently Was pediatric are and you the these to now that including imminent. for just I know new categories, the mentioned vaccine proving prepared guide? FDA vaccine EUA women remarks that contemplated an XX-year-olds. on in XX

the down also X that’s degrees contemplated expected BioNTech is X range be in second at and I X to the around the vaccine up around comments to and Is stable suggest room part. So, to sort X would in that it’s is their months that’s working believe X in on part beyond? And stable your the extent is for customer, is degree your something first road. a that’s potentially ‘XX for vaccine the of there that adoption here that emerging to for markets months, CureVac,

Carl Hull

in thanks start it’s that’s and no, or the yes, group of guidance, or for hard me at the that’s guidance. look vaccinees not new any Tejas. saying questions, by say to specific indication And let in the Well, that

highly to an level our fair at But operating and obviously and We’re regulatory of needs the I customers they own demand big customers. plans that that focused their have are think in from aggregated approvals to big their capacity on are those process. what say it’s they know support

our answer and orders question it’s your would that’s have my and partners, think of first then we expansions reflected that anticipated get demand of is, – I by to the part those of vaccines to as been or yes, in explained. your question, ever world we of believe much on build way the than guidance, mRNA And months the X that even see we you reasonable in thought Kevin will use I developing then assume So the that in second absolutely more ago. X our coverage

manageable. Before chain to the by were among hurdle FDA hurdle approved more a But like changes the first momentous cold monumental right get much looks over. seemed – that now, it like becoming that’s

be of not will you a So, anticipated. going number used places that in see to were vaccines large I previously would are that mRNA expect

not, changes As think fully to have in. or been or anticipated likely it’s whether baked incorporated I those less that’s that

Tejas Savant

‘XX, as in obviously, year well? the all X.X some push then a billion Leyen’s approach starting then upside And or was expansion all EU commentary of help later is will And that contract locally. source lot made, Carl, mRNA supportive this and a on Is doses. are you that pretty also comments ingredients Ursula Perfect. the second, of von you der made a there of to comment doses around that

Pfizer BioNTech the mind, can you continue in the you States? would that CleanCap or comfortable do need your ingredients that sort and that consider is mean, from pretty something here with a to feel sourcing expansion So in of European I current facility

Carl Hull

simply Tejas. don’t I question, latter know, the on Look, Yes.

source Pfizer’s to is all there countries. XXX you probably components look of of admirable if quite motivation at the is that, seems but EU. one think an It every I supply different that me stating from those there that components XX by duplicate commentary they in unlikely

a to matter, practical a more handle. difficult that So little bit as maybe

Now with what XXX we respect is obviously, to XXX. this and the timing, heard is,

heard might obligation the XXX option under the that I an the it’s on a order have shipments additional demand and quarter have and would fourth but EU XXXX. in you then for majority suggest the the XXX in in XXXX December, this is ramp of million some million So which expanded for of the year, this would first doses purchase very occur doses. vast

Tejas Savant

fair to but comments like you per clear. one that of developed made one, for dose a the final dose it that that to an the then finer in the the terms overall the given point for we waiver final as price play gotten world, much sort well the it. expect clarify can that And had market perhaps how on you one a couple or see inbounds Got IP so production? you in COGS that helps might Helpful. to something and terms around vaccine Is Very assume emerging small revisit of of of put least should CleanCap? just that relative impact as well, is out you need not the price point you per it Carl, of the of of sort price at to the is in

Carl Hull

waiver asking you see not proposal? that... Was Well, of IP would impact if because are we the

Tejas Savant

exactly. exactly, Yes,

Carl Hull

occurrence. you the terribly geared we vaccine that somebody suspended regulatory a of those I possibly don’t then Yes. that thus, to are just pressure. think If Look, producing submissions see can Tejas, would and through And you have be things being all linked as would price in changing compounds. go to the related suppliers that today, likely I would IP capable see I on two to exact used still how have the and don’t components don’t together. being compound, see up have

Tejas Savant

Perfect. Thank you.

Carl Hull

you. Thank questions. Appreciate Alright. the

Operator

line Sachs. of Next of Matt question Goldman comes the from Sykes

now Your line is open.

Matt Sykes

questions. Hi, thanks taking for my

a that terms post us of some any sounds more involved COVID strict programs lockdowns. are coming or in back other like give more on it these just with of little actually and non-COVID a gave you new on, maybe working of you’re just minute, vaccines some for the from my – some Can little Just flu, malaria COVID more a pivoting you on of and additional therapies other mRNA potentially the Could non-COVID a areas projects basis? you’re first just some other online away bit color indications. sort disease color give one, color you

Carl Hull

Well, you want credit at think We all it’s take that. yes, propose end to Matt, work this vaccine and at customers can and be discussion most day, that influenza our multivalent, work. around wouldn’t the however alternatives accelerated, most with noise combos, to for the are obviously, has want of the been to those But it. the who look doing vaccine I the seasonal

and So had I it. obvious the commentary one around is most has think the that, that most

HIV, other alternate been that long, to been programs, have of and doing including a The targets for have vaccines time. long vaccine ways malaria resistant

those. caused a the the the to mRNA on there mRNA So valid for of experts has targets do validation field these people that lot working the that know platform and in represent feel next of are we platform,

hold are a or resistant call have that are These like hyper-variability large the as In being similarly infectious are – number things vaccine full I’ll now include perhaps of, that disease with it’s also etcetera. addition, concentrated lesser people other been mRNA on think And and was COVID targets again put there them, those I might Ebola, reemerging. diseases, prevalent other programs on for. rabies, used in swing,

Matt Sykes

to towards? areas? know I then the CapEx longer even up into see might shifting are CapEx in focus facility types $X you on a capacity I think, so, And CapEx, or just you for of billion If about to shifting lot get basis to you where of put had trialing that. you Are for shifting are – of your the guys prepare one, sales. you on volumes continuing are to in on you a money it to, that other a Thanks Great. the

Carl Hull

Kevin, to shot at a like take would that? you

Kevin Herde

on Production. Sure, Yes. for San right square really, Diego-based Again, of Nucleic we facility built all been footage out completion Matt. focus mean the yes. predominantly of Acid I had has available the now, to the us. Yes, the

Now all and runs I think, are and and making lines X,XXX we for have equipment. need feet, square sure doing the that are those up the except size about we

as little to well as lot of things. forward, biologics focus recent quarter expectations. as to expand And quarter. look So that’s recent the from I this really first a as continues bit we to a our the in business are above at going think last continue this Certainly, point different the far

organic something in of flow, kind investment going evaluate. to to we’ve about, the Also, free we the that. evaluating mentioned, that cash ourselves as our talked Carl be M&A with we’re of So is outside continue

and or years our additional that’s forward, infrastructure as turning make we’re as for facilities demand, the additional look several we we expand, that’s to to whether additional capacity as growing geographies have continue we have attention always something So we sure meet to. to this

output. couple the look where perspective, even you But potentially growing are from how capacity $X nearly years least percentage in with we San Diego have We non-COVID-related vaccines, a a today billion we’re at of take if away. and you talked that’s the here at about of previously

But So on and things you’ve of of last as currently to we in looking stay segment. couple well, those is quarters have the all that that what focused the are seen at. we’re in predominantly NAP front

Matt Sykes

for guys. the Appreciate time Great. it. Thanks

Carl Hull

Matt. you, Thank

Operator

Couillard comes Jefferies. of of Next question the line from Brandon

Your open. line now is

Brandon Couillard

to thanks. in coming Is your gears shifting CleanCap. your afternoon. it about over Hi, premature or on Carl, be think down reasonable that pricing with conversations today? customers would maybe Good back somewhat ‘XX biggest based to CleanCap

Carl Hull

would it premature. think I be

Brandon Couillard

Very clear.

can terms gears that months share anything shifting to an customers launch, Now over tangible maybe update? of can you date? the number – DNA in to into give just terms you with that several plasmid us In us of you’re buildout,

Carl Hull

its the CleanCap its it’s the is utilized. I on box a expectations end-to-end capacity be in given of custom well of along well, But want of who tracking mean it’s go stages. the customers will to We construct, product, for to resonating mRNA in have and all of Yes. services terms high growth the particularly we think rapid out the that way didn’t early in sort story from finished right contribution side. through

Brandon Couillard

Very good. Thank you.

Carl Hull

you. Thank

Operator

comes Larew William question Blair. Matt Next from of

is open. Your line

Matt Larew

sort But in Hi, the the vaccine. any supplier of as COVID respect Carl, curious other be scale the highlighted has Pfizer think Brandon you about and of just helpful? alluded good particularly bottlenecks, to experience afternoon. expertise to asked could manufacturing Obviously, has chain the complexity global supply a plasmid fragility if the offering. or with particular, where you

Carl Hull

lipids think manufacturer the about equipment lipid the certainly, I the high when that and to volume right Well, formulate go of is of just nanoparticle needed mRNA enough into the now, of vaccines, supply the challenge the biggest mean, demand. you this

sure So and consuming is efforts that’s lot of certainly customers’ a I’m a point. time our at consideration this that

our grew say suppliers primary increasing pleased And Beyond with effort case materials that own something demand that, our we chain, viable that, concentrated suppliers. supply making making on source in to and as I’m backup all sure quantities have happens that has well. sure in that the we we could the gone

Production need of any to had Obviously, getting U.S.-based under manufacturer rubric haven’t ability components. our Defense this We in question. and materials of delays massive being we been Act level, in get the all at some the then the that being a hasn’t stuff

pretty feel we about set aren’t mean folks today. it’s doesn’t having. other that there good So how problems are that up That other

Matt Larew

Okay. guess, on touched follow And but to wanted then, I in about Kevin, thinking you’ve this just infrastructure. I bit, terms a maybe up of

Singapore. months mentioned partnership you $X to Carl, alluded X expanding and ago. perhaps than faster Fosun scale thought have into your the billion You you may BioNTech in

that perhaps considerations? that redundancy about, thinking of you’re and curious, endemic, thinking within global footprint then Just manufacturing kind context there if as is about thought to other an COVID and

Kevin Herde

something certainly we is Yes. our think mean that Yes, are. I certainly, also to important. certainly, and customers is redundancy very see there want

that. organic domestically enabling us buildings. be additional as It with or either capacity So could or needed; in take long-term, that internationally. several And forms, someone right? we’re can investment evaluating be to overflow It help could partnering

evaluating constantly are we that. So

all have again, whether be organic And additional And or each that I of capacity different one we’re ongoing. looking opportunities. are those at through several it getting strictly via We think partnership conversations or them. M&A,

are demand been continue there. of supplying it’s fact been sensitive out to well. something the to we and years want That’s have us very for very, that’s focused We’re to on all we that now the ensure that served we

we are to long-term. capacity continue invest going So in that ourselves to and

Matt Larew

time. the for Thanks Okay.

Carl Hull

Thank you.

Operator

[Operator Derik Bank of Bruin Instructions] De of The next America. question comes from

Your line is open.

Derik De Bruin

Hi, good afternoon.

Carl Hull

Derik. Hi,

Derik De Bruin

Hey, ask I’m different sort asked going Brandon a of but it to it, so way.

you’re EBITDA think sort way that look – that about at hold a you in model? – initial of a margin into to If ‘XX. talking Is good of to ‘XX? Does that XX%

Kevin Herde

Yes. Go ahead, Carl.

Carl Hull

Kevin. ahead, Go

Kevin Herde

the mean extent certainly, long-term continue to yes. we’re – I growth. again, margin P&L was to same, going that the the say, force I the the not to extent at mix be to certain to squeeze it going sacrifice to stays mean will level. a necessarily think Okay. I I around the

business now seeing sort margin you’re what that think is the of I natural the been generating. has

be R&D. right it commercial quality, to be continuing it the be we’re remarks, in my invest in said I As areas, it marketing,

the going throwing Production think be the the as of And the of some controls cost I high the for infrastructure you’ll we of in to because we off have in get have that second continue in is place. we that margins see really But that’s half us that Nucleic and into to growth year. business important Acid long-term. and the the

As Carl pricing, the about chain supply about our where inbound where feel contracts and stands. mentioned, good we feel really stand, good those real

are pretty being of most sustainable. given think margin, the driven So right is by gross now margins those I that

Derik De Bruin

Got for it. amortization And is depreciation, the $XX $XX that million year? still a million or assuming

Kevin Herde

to $XX Correct. million $XX for year. the D&A Yes, million

Derik De Bruin

here, to sort are able people the interest pricing like up given obviously, you as of and pathway huge to rush go it. And the be Got demand, is mean, mRNA going to projects? I take there this actually down of

Carl Hull

Look, up in in think we pricing programs. current situation, way, Yes. a I involved affecting in critical large would, people number don’t systematic expect these the a to take of

fit opportunities workflows products customer. We to for better them the and applications make will the improvements, look value to or the of enhance added individual contribute those to customers’ degree to

contract. in the preclude per for we board. business mind or of would I don’t systematically, activities expect that a that multiyear customers take – they the portion that material service have agreements And big that. or X% But agreements will of our of X% we where You price some pay no, material as with supply year outside see across this some could keep being

Derik De Bruin

color then general is final adjacents, the you what’s incremental just sort as strategy new just the right thoughts of current your any And for Great. one, company basically on look verticals, the company? or for it, what strategy your one at M&A,

Carl Hull

still same. the Look, it’s

tell in with continued it our or the add-ons have but of super in we is to in past, to verticals be over which the there, that is that always we’ve the a short-term last companies we think we’ve you those looking anything try of to in meet great those markets and adding to that right then on we’re we look to the needs target months target for with able reflects would three and balance now. I focus active organic customers done capabilities existing growth participate the deals. focused each science will M&A for seeing acquisitions what some conclude happening significant within us, in few I more super be been potential We’re our high at can spaces. that don’t

that so think And I remains unchanged.

Derik De Bruin

Great. Thank very you much.

Operator

The next of question comes from Dan UBS. Brennan

Your open. is line

Dan Brennan

you like about Thanks questions. you Can far EU taking and the you. see talked how you and coming in? of again Great. in just orders X Maybe Thank doses. advance out thinking ‘XX, and remind But Pfizer us do talking the kind kind just contract two, do ramp. And currently have X come number like you’ve prepared chain, capacity about capacity? to billion set then for about about your supply and that potentially talked I you’re know billion meet doses you ‘XX if can you in just unfolds? you up that to the of mind you us typically

Carl Hull

would that? you try Kevin, to like

Kevin Herde

right part I mean have meet ability probably yes, question we’re of XX% we’re to Probably that your at, to capacity. XX% the the question look – at certainly. do to second we there, your now, straight Yes, we where capacity. as

forward. comes ability comes and a forecast. to in mean those production us into the sizes that’s work MSAs. and at. ramp And a in substantially look They build And customers their collaboration just long-term – flexing are with kind up with of we I that So planning, from our a year they have have that’s things. of why sort we lot where at certainly the sort demand that of labor and to we’re with in

will if use As us plan to visibility. couple place Carl sure few of quarters. a we POs then that’s again, their they year make one meet orders of And demand. they and us not contracts typically we binding the for based for And mentioned, and that, out and months, give can a worth on

of those the already. forecasts our going all XXXX into place out a Some provide PO, way customers and rolling

want they Some want they their to have guess really make sure of them to slots. – just I

little been we’ve the bit – So but but term, it’s are in high-volume customers just been do forward. a that’s meet a bit requirements a many the we shorter visibility different, with as the to it’s continue great demand. again, able these and able relationship nice looking working little something forward. And we make that’s sure to with them do, certainly Again, look to been of we to will be and

Dan Brennan

gets And are with not of just of the around I whether savings. whether or enzymatic volumes, locked know Great. don’t to volume there wondering more some kind switch? any more a I not CleanCap maybe economical. then or there or of any vendors looking I’m risk cost in is could risk become some wondering am is scale? just an there approach potentially

Carl Hull

more with I differences significant processes, think greater experienced are especially cost much here, of our frankly are as efficient costs, their getting of are and customers yields cost getting be any than reregistration And to methodologies. more we the more they regulatory switching that believe in overall. they are able

vice or point this from in versa. a So in time you’ll I CleanCap not switch would that enzymatic somebody which is think see to

Dan Brennan

seems have how to through guess, share to any And kind I have volume been we’ve just an you seen how Can being be challenges more the of scale? am to in things scale to-date? characterize gone of you terms given yourself of according mRNA modalities. more other walk to commercial wondering in kind able plan? just just date, run own issues that It’s you unprecedented and some capturing faced I an your

Carl Hull

to process means with, on focused space larger with facilities, doing and had the we meet minimize mind in brand-new design, at growing Yes. efforts Well, heavily not team things that ability in team which and look, purpose to in I demand. of very don’t want to lots that and scales. are Brian specifically, in his our grow, Neel we Keep TriLink, to but of this lots addition problems have started improvements. Brian And

or if would have clock been the at of us a XX for order years, that have X back operating kilograms a for scales multiple gram quantity. CleanCap filling that So material. a gram wind we’re significant orders Today, you X.X a

into room improvement contribute, we simultaneously for goes to lot the we see they pace demand, and a that us still have have with been opportunities. all So and things but it, allowed doing several further keep

Dan Brennan

COVID? we’ve discussion few you as lot looked been the for we sponsors And pricing vary of that opportunity the of And at and flu. the think you kind about obviously, flu think kind is versus set mRNA how and CleanCap into a from all? that in times, of the well. of about came would using CleanCap some there flu, a of about Would mentioned content up When of

Carl Hull

on flu to too I for also think different of step us little a to value in to of be we functions added be orders maybe If or that But bit may magnitude for going I course, depends a might And need you have to work to early can it it’s think the quantity do. it there deliver. make vaccine, tell. it material are basis CleanCap then opportunities modifications better don’t that of you different. pricing. make a some there

early self-amplifying center use? to to give too little to things construct? straight this need a or all you are do construct to bit anything mRNA look. much a or how Is So a Those you

Dan Brennan

happening to potentially is that, yourselves is are And to open forced replicate its done risk risk one, you’ve own up price? is knockoffs being there just IP your at it do patents could that a a using maybe and much to the around just CleanCap? If something potentially supply lower final COVID on sponsors any for IP, that Maravai that just what

Carl Hull

There we of little initiatives. provided is Dan, information of been the bit Honestly, know. these some in specificity that’s not don’t enough about

what earlier wrong just about of stand kind problem. the And so wrong solution we I the said by to

Dan Brennan

and you thank congrats. Well, Great.

Carl Hull

much. Deb, so to it thanks that, Well, appreciate turn with think, We will I it. you. over And we back

Deb Hart

the I Wednesday, this of Bank XX. will just at we tell you thanks, Great. everyone, Conference May to be Well, joining America today. for wanted us

Both of be the with XXXX. UBS also We you touch in forward contact during any will questions live replay presentations to we and time. be in course if participating your month. free you Conference will later the and at available me look Feel have on Healthcare our the both Thanks for staying website. to

Carl Hull

Bye-bye.

Operator

you That conference for your Thank concludes today’s all call. participation.

You disconnect. may now

Maravai LifeSciences (MRVI) 11 May 212021 Q1 Earnings call transcript