MRVI - Earnings call transcript Q4 2021 | Maravai LifeSciences Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2021 Maravai LifeSciences Fourth Quarter 2021 Earnings Conference Call. [Operator instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Ms. Deb Hart, Head of Investor Relations. ahead. go please Ma’am,

Deb Hart

Day Good quarter Thanks earnings and tuned today. investor of Rachel. be we on that repeating call. joining our you information R&D our for fourth year in month, afternoon, you, so for won't everyone. us Many last Thank end XXXX

For the including IR clips any missed replays and materials us the who site. are of it video available on

financial are and available and posted provide slides our today's quarterly under on at website release that cover the financial press updated today's call Our business On are our and www.investors.maravai.com will we'll call, information, results. accompany guidance. highlights, we and results financial

results see you Slide update will business and you Carl will financial Kevin on guidance. with can a first provide and As our X, review

open regarding following make We and business or Slide uncertainties events forward-looking the remarks. On you questions risks actual to those we we expectations that statements results company the that performance call and may differ. including prepared our for X, cause call, to of the remind the the financial are goals subject for this will during then

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

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

call turn over the Carl. I'll to Now,

Carl Hull

And everyone. We appreciate today. Well, Deb. for join thank our good us you, you afternoon, having call

with start Maravai fact, slide Let's in strong a the quarter, our protein fourth the quarter, quarter largest history, former divested in of quarter reported our Today, compared revenue XXX% results which without X. to third on fourth in even from and up quarter. million had our XX% over sequentially detection growing September contribution year. last prior we for revenue $XXX.X business, year, the we in the very

Our adjusted grew EBITDA the prior million XXX% over of $XXX.X year.

million, XX%. XX% business $XXX.X income margins COVID-XX was with excluding importantly, $XXX.X revenue, million outstanding and net from the revenue EBITDA vaccines for an was based XXXX entire can revenue adjusted as performance year line on you see per adjusted business of incredible EBITDA EPS $X.XX XXXX was share. resulted And, from CleanCap grew X. top year. Our most in slide full the our adjusted at year Full

global base Our see We demand vaccine board continuing growth above deliver our build business for momentum the market to on COVID tailwinds. of to well across across continues well-established base. top reflecting products our accelerated customer

on what a and like moment. seems As on that mRNA therapy accelerates just cell daily and research in and development more a gene basis,

remains nucleic in acid in robust. growth particular very production X, slide to Turning

XX% sequentially. of Our year, and had nucleic revenue XXX% acid in record production million up up QX, business year-over- $XXX.X

Services and all and GMP areas, nucleic CleanCap cells, acid was full constructs. $XXX.X accelerate Manufacturing the utilize XXXX. over XXX% million year, mRNA production continues to revenue growing Demand custom CleanCap reagents CleanCap For for mRNA in

and quarter in for base, another manufactured pipeline see potentially with opportunity clearly From spectrum customer to to Maravai of unique market stay our while for XX to in way. will were enter of manufacturing period. we year to the transformative for you and the our active That's increase newest a XX we under mRNA more the here come. we and supply And all wanting in Today, in our review, of On durable in August, had slide infectious X, global are into XX our the XXX% innovative of across term discussion. and encouraging the seeing earnings to customer CleanCap Even with the XX technology is staged both XX programs pieces handful the estimates, term reactions. meaningful the acid more we second with that one disease seen vitro past. exists might have stage biotech CleanCap the is supply incredible the agreements. and our relationships up to These years traction These be CleanCap back customers that improve had population enthusiasm illustrate raw are a for and generally, sheets CleanCap mRNA prominent in continue agreements late growing materials share new mRNA We sheets actively value of under and the thick right in than transcription negotiations to When bring mRNA with supply earlier signed vaccines, action of negotiations of have therapeutics. a fact actual are supply in inclusion in plan improve we held more from we an expensive GMP six new and that to to quality platforms. help from expected at nucleic of try believe have executed providing pharma more We review. place. involved spans customers specifically. to arrangements that To perspective, to position, agreements, me forwards increasingly one further largest more market some underscores mRNA last under this straight XX let our the more this agreements start our call by you'll agreements that year, CleanCap critical and and

committed we in scale our the mRNA partner systems R&D we customers. and quality to and with markets growth ever our we also investment and are this the serve, closely more operations, as innovation, facilities our enthusiasm general increasing Given

and synthesized acquired materials capabilities MyChem to broadly diagnostics extremely MyChem over January key of allowing slide the for for addition very therapeutics the address X. us therapy, critical are the now that of and MyChem's years. now a used across been critical of materials going of inclusive raw few raw the customer that strengthen they our products. nice Turning mRNA And chemistry in provides The XX. vaccine We well. has I'm our supply nucleotides, and manufacturing molecular ultra-pure LifeSciences and common chemically specializes segments. is on integration supplier MyChem of to pleased extends past in are manufacturing, cell gene team trialing to synergies diagnostics several products ability markets chain in

we In addition to investments while laboratory type people, management of making our are investment, scientific resources program facilities also this adding inorganic and at collaborations. external organic new

in XXXX. able further to We pursuing be inorganic in hope opportunities growth and additional to acquisitions announce also remain active

that actively a are we materials our We working directly. so ability we as and serve raw international may to reach footprint global key expanding to improve customer to are our committed expand our our base supplier

Biologics and slide XX, Testing to turning business. Safety our Now

therapy, and support growth drug and high services and vaccines markets and and products cell BST biologics our manufacture. As gene

products. set safety viral we Along process global household of ensure the innovative help in biopharmaceutical Here gold analytics. and related prediction solutions their with protein the that standard impurity offering customers clearance our

of million revenue quarter up fourth Our last $XX.X from BST in nearly XX% year. was

testing safety XX% revenue three grew For over notably our growth strong of factors. the driven full by revenue $XX.X levels. biological This XXXX year, million is main

distributed as new user both vaccine, virus a result direct demand programs products and no based and their high gene continued and channels expanding of our First, analytical end attendant therapy associated through for rapidly needs.

to of all kits Elisa cell quarter, in strong services HCP of we to breadth already that full number other expanding during development the categories product vaccines product of use the our gene our biosimilars. also analytical and spectrometry pipeline, detection kits a impurity mass saw and routinely across continuously the biologics sales biopharma demand from finally, generic protein based strong and immuno-oncology line of cell therapies, the kits. innovative commercialized And use promote assays Second, for

of into host agreements custom entered protein develop us biologics customers proprietary a cell our to programs. with their Additionally, assays number to support

growth catalog and our for highest the offer often by services in the opportunity superior nucleic most a Maravai. customers’ innovate offerings attractive and is and overlooked the and community, to to technical the the support plan of BST some ensure very business products to to products to scale continuously We to quality meet needs. comprehensive our priority, BST due scale long-term our and investment remains business, key simply acid While of size production

guidance Now, our you growth to revenue at press of moving are that over we on the revenue to XX% Slide from total to $XXX our saw million, midpoint. $XXX XX, increasing XXXX million release which represents XXXX

a and cover year year more now fourth a long-term and have full we beyond. outlook with Kevin for I’ll assumptions. on deliver shareholders we're details this update position the internal guidance, and and our our We in believe great And our that to year. value strong performance, our ask Kevin? to to quarter model along

Kevin Herde

good Great, everyone. thank Carl afternoon, and you,

for wrapped year Our fourth quarter up amazing an Maravai.

into full results Given quarter year will our for XXXX financial details briefly financial then presented I guidance dive Carl the some XXXX. our detailed fourth for financial more already, cover highlights the regarding and of and the

on Let's XX. start slide

was So and non-controlling the from of net operations $XXX.X margin beginning numbers, amount before in with operating the $XXX.X XXXX. of million attributable quarter the interests to fourth XX%. our million quarter was our income for Income GAAP

Net the from Our in tied million income our process. previous R&D incurred to manufacturing an party mainly CleanCap to improve for $XXX.X $X.X million. and spend assess the third expenses quarters increase quarter was was year of

million XXXX. Turning represents year-over- million increase slide measure XX. EBITDA QX was Adjusted fourth XXX% GAAP $XXX.X non $XX.X year. to for for quarter and to compared the This

was to a was Our R&D EBITDA increased quarters for from increase a XXX% mostly in XX% over adjusted million, XXXX. margin quarter. year slight recent the spend due the decline with $XXX.X EBITDA

present Basic and shares. XX, full A net diluted a average the EPS, Our for attributable GAAP our income diluted EPS Class margin was EPS, XX% EBITDA measure for divided fully weighted the here EPS. adjustable A by On fully is shares year. slide Class we

Class XXXX. other that under divided diluted average for A would both equity an also weighted GAAP Our conversion QX as measure award net be interests EPS extent converted such and fully B diluted prior GAAP, to in income the was for dilutive Class a the if and it the to for not assume securities, method non-controlling by is which

securities. and which average weighted the equals shares for us B other diluted EPS. Class the comparable most A non-GAAP fully simplest a both divided adjusted of the It's shares of and and by adjusted income diluted is Lastly, metric measure focus net Class

the for while adjusted EPS diluted $X.XX was fully EPS fourth quarter per and share. were basic Our $X.XX diluted

XXXX, year adjusted EPS shares average our million. of overall weighted $X.XX share was fiscal For the per based on $XXX.X

lead in January of B common to will lower and A B XXXX and about in the Now, which by $XXX shareholders as tax Maravai will XX.X%. shareholders accumulated retired guidance power contributed on common A of Public the start XXXX detailed company's distributions ownership share our Class basis overall effectively and to Class year of have XX combined to a Entity our end, Class XXXX, X, I'll Company cash XX.X% moment. filed our be discuss points, At in of we Class reflected the voting million that down million percent X.X accounts to from X-K of stock increasing shareholders Topco

Let's move to XX. slide

ended term million $XXX debt. So million and we long $XXX in year cash in the with

non-GAAP strong the of $XXX.X million. of less on calculation $XXX.X our That EBITDA is free expenditures performance of led measure million quarter of to adjusted cash adjusted $X.X adjusted robust based free the Our for quarter flow a in million. EBITDA flow, capital cash

all flows tremendous in our financial this our interest equal. a with lower other per cash sheet versus have flexibility. previous demonstrated recently structure, expense save financial rate million existing us cash effective we about balance As year We repeatedly things performance, $X meaningfully will at debt strong by interest with and rate. being repricing the discussed us provide That

demonstrated and two investing drive by to and acquire is investments new needs this we're million customer Additionally, make work announcement and January of in this capacity, build by of our us of financial addressing on upfront And online both allows with This inorganic on organic our sheet fact to year strength contributing to long-term expansion MyChem. while XX innovation also cash to that balance into $XXX putting our the $XX the coming to XXXX. about million facilities capacity growth.

the some provide segment insights to our Now quarter. more performance into for

XX. slide to Moving

COVID-XX customers Nucleic bit of growth. EBITDA of customers XX% nucleic revenue Those million to nucleic the specific as our to as our the lumpy. COVID-XX requests same in likely pre This a dive overall our to for segment programs drive services. commercial joint address a acid beyond vaccine product This global partnership nucleic In The business unusual. of this our revenues in business demand earlier, This growth at of COVID the the the from from like stages mentioned acid adjusted fourth quarter Carl of the for that value from continuing saw we over generated can I did extent Demand In margin to continues to rate products related were reported collaboration XXXX is into anticipated orders the came production in stronger extraordinary performance is to contributions see not prove programs than total million guidance. primary repeat in adjusted not the differentiated quarter outside quarter look to was vaccines period our time. two surge. of production third XXXX. strong you'll in the and our added of represented the XX%. vaccine why And in acid acid at of vaccines. commercial vaccine orders our EBITDA both CleanCap XXXX, company's longer ramp booster estimated detailed MRA $XXX top for overall overall be we quarter our of generated As well growth annual CleanCap continues when quarter. production reflect as Pfizer-BioNTech the XX% their see for products the $XXX.X in and additional as of Omicron QX. business revenue in XXXX, for

our in $XX.X Cygnus contributed Biologics we that revenue the of Testing the business were products, the business X% of quarter, the segments in on fourth Here quarter. slide which all see XX, company's our branded Safety comprise million

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

a XX%., year-over-year While moderated quarter the bit fourth growth been too never has in the stronger. roughly business

Maravai debt, slightly product from full Corporate spoke the million I CleanCap. a LifeSciences in spend XXXX as up to is accomplishments XX% our expand said, based and go strategic XX nearly business. with the a dynamics adjusted the XXXX, year were and XXXX included Foundation, With a not Charitable growth well R&D great quarter, start start this articulated But kick Maravai our multiple detailed spend that as during on in to expenses that for marketing XXXX market was discuss offering to let's contribution All-in-all, we strong very million $XX.X as guidance. and to legal $X our momentum. being just quarter in of EBITDA to is and the expanded off around strong segment slide IP great are as wonderful total up previous a

our range CleanCap $XXX share at million which This above revenues CleanCap at internally and neither work revenue for our prior customers straightforward sell well nor total. attributable of interchangeably the We $XXX the specific estimated the products mentioned, midpoint these try we in reported both estimate million guidance $XXX top by are million are our of customers, range exercise. today Included million would the previous overall here vaccine the their pretty to prominent XX%. in commercial is Again, directly guidance and be indication revenue today, demand and case our our customers development. grow materially to to track to in million new we to revenue year believe XX% X% total $XX closely we up specific is XXXX. understand our that our specific of from from COVID up XXXX which are customers. and our implies million those our guidance about estimated contributions with raising XXXX COVID-XX $XXX BioNTech the XX% Pfizer is updated and our specific, increase revised $XXX can future Carl collaboration, end to used of That's in orders uses, a full the be customized XXXX, we're of CleanCap between at estimated the say to XXXX, COVID now midpoint. $XXX in I As million, product

total bit guidance but years from Testing reflects had Now has our this moderating also expectations. is of revenue full our a annual of business for XXXX this outperforming XX% around the growth of year This for the Safety strong history expectation a recent business. Biologic

all of this will growth CleanCap, for about XXXX. on or vaccine of million track demand million on revenues midpoint deducting based grow of at midpoint be production these of XX%. acid $XXX Now When guidance is segment implies around business production disclosed nucleic that for in the acid nucleic for details, to this to the our base nearly COVID the $XXX XXXX

of law be nucleic of growth to numbers not the business folks acid the and results, our overlooked. large causes CleanCap base primarily production on focus our profitability most While should

Now over when the we the QX growth overall divestiture being adjusted protein overall of to XX% XXXX see relatively the we to which course XX% and of detection QX for evenly, currently XXXX revenues closer of of revenues just of represent gated north see roughly segment. versus QX XXXX, would XXXX, equal

have Now metrics. financial forecasts updated our our guidance based other on those we revenue expectations, internal for key and

diluted highlighted we or at be implied growth the of more adjusted of an to adjusted $XXX XXXX As expect is EBITDA, EPS focus XX% offerings revenue see to million, day, for tied our how we midpoint advancing in a QX, we range operating our per the represents at and with EPS margin range non-GAAP fully We adjusted our to EBITDA levels spent that customers’ to XXXX. to QX gating, continue at share which needs. range revenue about of to the directly be growth. of expected at million a range $X.XX midpoint the measure revenue The on XX% product EBITDA non-GAAP of $XXX also meet R&D measure about of be see $X.XX to our in Adjusted XXXX share. increased to towards Consistent our we

on diluted for converted all $XXX a shares plan partially million share Class million award XX, A discussed, Class by $XXX full reflecting Class as slide lower shares in impact equity XXXX, year results about to fully the fully that diluted employee shares of based to XXXX. B previously EPS are B offset count the adjusted Moving to the assumption of for

Additionally, our EPS at fully not adjustments XX%. a reflect range includes certain diluted do and to that of are tax adjusted XX% co-operations effective

for to $XX as based million the the following to non-GAAP it show million As XXXX. new $XX get between for to expect items GAAP and our million, to $XX the expense facility reconciling below capital million $XX other needed equity revenues. run million relates Interest majority item adjusted to from expansions non- we $XX vast to we to $XX amortization to compensation and $XX range, GAAP maintenance of invest which depreciation be the million continues expenditures, tied EBITDA XXXX of $XX million, about see to adjustments million, to EBITDA our in and X% CapEx as a between and we

of and slide income reconciliation from our to at of adjusted in EBITDA EBITDA presentation. EBITDA is and to net the end press presented release Our the GAAP GAAP

plan information remarks XX. now another back file to segment setup to you for of Carl, to Form And detailed X, for clearly growth. you our Carl? for XXXX it which XX-K, turn your see prior great some overall in be today, the can addition, slide deadline. related year In Thank final I'll on March we XXXX all the will time our

Carl Hull

Kevin. Thanks

up incredible future wrap and So XX, in beyond. are XXXX and we slide on had XXXX for growth poised an to

in on forecast single address now. to right playing financial orders Let of our full year for drop expectations will their proactively markets their for know are from Since that the while biggest basis. them CleanCap, vaccine our But portfolio a We high positions about how biggest biggest about which yet factor I inevitable about tell purchase final our try current the forward we XXXX? current you is year. question. get what develop areas. me go that dramatic leadership have target specific you. to volume value a customers seen a We that and product in But XXXX no right preliminary with strong in the evidence we've building the off coming other discussions I customers we share with a with engaged we expecting can guidance in are don't volumes

is daily news nor single one to the of complex here and preprint among to I initially unlikely static This studies of are populations, that future role responses positive factors it in or utilization immune vaccine of not the with yesterday, either customers growing X.X to a yet different of the response who has of multiple be single of reliable CleanCap that relatively people consortium the of appears scientific vaccine any predictable. adequate greater to of demand. health or easily mind Changes in anything utilization do us COVID-XX virus, or BioNTech the And to as believe number volumes reports predictors online mRNA have single global our will that COVID-XX optimal potential a emergence market already immune people of yet thirds is tell public vaccine. necessarily that understanding share in reflect overall receive the for of that Pfizer off seen. volumes than Also, such the by or have about and margin full of two that the to about fact, future have the come one that all billion keep need the vaccination manufacturing it some to need new expect in kind capacity neither built have this will XXXX I reports In a reflects vaccines. a they of factors vaccinate individual sustained the The for variants vaccine long-term maintaining the SARS-CoV-X point in a view receive that globally XXXX. boosters billions is escape. above

COVID-XX vaccines is mRNA health proud vaccines key malaria, the shingles, role our therapies gene transformative that and making battling Maravai for from are playing having to influenza, are global accelerate, that on of we customers, partners the impact to cancer, that and happen. So only human and in cell employees at

are We line to our call strong three sustainable for would growth. committed to and back like operational over foundation as over we'll focus a to continue questions. building the on people innovation now the long-term excellence, Rachel? to And Rachel strategic for business pillars. I your turn

Operator

[Operator Instructions] with Your the of Couillard first question from line comes Brandon Jefferies.

Brandon Couillard

future afternoon. Hey, business detail Good on outlook the into appreciate and the Carl thanks. development ‘XX. all

Just therapeutic terms able on number are COVID the in to now, those relationships to or that quantify XX drug degrees on me XX across varying way? funnel of or how many supply in agreement of customers CleanCap the are expansion different in programs you quantify actually are excuse the involved any programs

Carl Hull

us bit a when one program, aren't little after. us And hard that, they supply Brandon, the a be agreement, they at supply that they're have time may only of to going of disclosed a portfolio of thinking do agreement. it's or No, may whole programs to customers those for sign typically our the because

there. estimate you give really good a can't So

Brandon Couillard

you. Got

Can down is new margin plug necessarily puts-and-takes behind margin, closer kind there, might And over the it outlook, that? gross X%, us of just than Okay. about I know Kevin, you gross basis understand like. time, suggest of kind year, that R&D other is the of next in of adjusted in the to you kind to would stepping points EBITDA suggest up down guidance capacity come talked maybe stepped then probably margins help terms step XXX

Kevin Herde

gross the is half bringing capacity. we're consistent. facilities relate mean, ahead increased actually to a the the the relatively year, of seeing additional overall bit XXXX. expenses spend where of I areas come second on few little margin There's those the in Certainly it's Yes, a as

the build Also, impact the going initial R&D the on we margin. in a quarter, our and of around the we're and saw that's fourth there focus bit looking certainly continue in marketing CleanCap. legal we're bit the to our a of in quality spend commercial So footprint, and IP have to well little infrastructure, weigh do that side, also as the side little our particularly building team, out, to support and our our and as

about each very of margins So the pricing steady. very, our segments, real we is in feel good our gross

think, really you've as the continued expansion years, facilities, last seen protection our growth the and around I for cXommercial R&D some and it's few organic over reinvestment IP channel, CleanCap. via of

Operator

Your next with comes the Tejas Stanley. line Morgan of Savant question from

Yuko Oku

the this for your for call Tejas. is you on Oku Yuko taking Hi, Thank question.

much past the Over that four be modest assume upside significantly. than on to of of by more it forward factors? Is magnitude improved fair quarters visibility will Pfizer has go- driven contract a basis, non-COVID

Carl Hull

suggest, are. into point Let better visibility, have you customers’ needs me what think about a where that our to for a second. Realistically, as getting I think we we're

customers. with is relationship of Some that a closer those

of a to own And what as will be some need demand their result. and capacity their what views customers and improving as going of that they're

but expectations. play very that based I in So question? that both well past think with, as here. I think both history, current Does your as factors quite are comfortable are we're numbers on these And answer honestly,

Yuko Oku

the a then ‘XX follow $XXX up. for By of provided math, to upside and roughly And getting you. modified our From MyChem $XXX guide $XXX thank million contract revenue to we Yes, DoD to million were million prior an just elemental to? vaccine year? us doses earlier this it's baked math Or that million given you still that announced could of early is in offsets Pfizer an the XXX year. this conservatism in in the point there Are additional

Carl Hull

Yes, Kevin, you do take? to happy

Kevin Herde

in that. output our they on customers sign guide we our guidance, don't I Look, happy again, direct grounding based providing our changes our forecasts those aren't us. or other the directly am the mean, or I the to POS providing contracts and And we're things. contracts take Yes, they're forecast to -- revenues necessarily that either tweak or additional or us that demographics correlated are

divested that's protein that stay MyChem of contribution say true about of being We've And the the roughly is one we was size equal caveat historically. acquisition been there typically, detection our us some for to relatively conservative. of where that's previously the the to So business. I'd grounded. talked Very the business. that revenue

in and So that up seeing necessarily to that improvements line as acid and contributing not we're growth obviously will nucleic top margins EBITDA fully show in the sorts and of production. all gets eliminated things, those but

So normal come look that that's triangulate the we seeing midpoint of million all use put and through out. to you're forecast, different of factors here. those that our increase we and right $XX kind and kind And we've just where roughly at that's on

Operator

the with question comes Goldman of Matt Sachs. Your from line next Sykes

Unidentified Analyst

Hey, Nick on this is Matt. from

me Just is drivers Could raise XXXX expectations. on the bit portion of of of higher more talk coming question, business based revenue little better guidance two those expectations? kind a just for from the so you first a that

Kevin Herde

am and there, it's roughly the kind to kind has midpoints again, In color. and of so Yes, where continuing business that the where surprises I should perform happy little sort of look, been Yes, you think Safety of strip can has production, Carl the business think no now market and provide out within where nucleic same but guidance well Biologics some to growth it Testing about from historically, been went starting I XX% I there, of growth, it of be a performing. XX%. is, given our acid moderated percentage

just up you next And that's COVID mentioned, that building at as we biggest bucket, for indications investments contracts other all the business And products, after of things. planned outside several of And for mRNA where have bucket and we're the you as the look of the the we're performing for kind demand CleanCap build seeing continues [Indiscernible] customers, of always the see COVID. various that seeing. rest So and CleanCap of that's those products. see our demand, that of sort as years Carl be we ago. really we maturation in the things products, the And these then is that sort that, and is therapeutic And of it to it. blocks the really

XXXX And in into happened getting those as we customers, look funding encrypted, several and be as frankly, continues forward So, over that the progress, just involved meaningfully more has are to flow additional as things of last mRNA. outlook people slowly beyond. are we and to our and quarters, our more increasing in interested

Carl Hull

development of Matt, to do Yes, for and capabilities we're partners to help of is I new early this into them positioned have may that up to is a synthesis entrants the only new And the would looking the them. get And work market, not for they're from there add a interest themselves. color quickly. coming very well the lot lot very, speed they

Unidentified Analyst

it into areas then you. That's of And any that's focus for another continued quarter cash generation. M&A Thank it. Is strong case? there specific call of the Got if helpful. appetite and

Carl Hull

our I there's part clear certainly Yes, on mean, continued for appetite M&A.

a I of think formula and we represent Maravai, building MyChem is first future. for they as were classically deals success the pursued in we sample that us the

main on chain, our very to the interested you in the structure? you two always the think want And comment interested in and I go that today. same debt extent we're to at a are looking we're adjacent customers about those focus. of we maybe bit that we're Kevin, quantum and about ensuring supply the feel services some So to of that products degree kind that how to little avenues also can, would serving

Kevin Herde

hope our based founder the we right most spot production, about in being a segment, it, to Real we go in to real And flexibility north great have deal programs million their from the be industry, in their nucleic certainly for did. with to is, that ended integrates the as the to lenders, apply MyChem But programs some the to position certainly But we cash ability just it obviously, same, done of flexibility, technology. real the what to drive $XXX just debt have to in spot upfront right sweet we integrate be acquisition that to kept repricing, has to home acquire we and just customer like we loads throughout the where move the and our the if up what do those so going we to assets our are with exactly size something hold be acid continue the and and we still help cash larger, organic and capital. consolidation try and with always of highest debt base customers looking the still again, we that's and suppliers with fix. cash when company, great relationships this sticky strong quality make certainly products prudent our debt the of I mentioned, our the the new be accumulator then, we're Yes, particularly Carl just see to balance think did MyChem the providing that a load. to and consideration tremendous sheet. with was off for to would we And, continue right of it. total there's customers that really our has in the products at them and And take sweet right make we easier to support a look our growth inorganic assets possible. see we we opportunity know thesis for year quicker customers

Operator

Knight the KeyBanc. The line Paul next question from with comes of

Paul Knight

Carl initially was guide XQ, on the then think I the that how think visible portion went activity this XX% this guiding I see trial it you you're growth you ‘XX? you Yes, clinical ex vaccine of of mentioned business? year, nucleic part on on color And of history fluctuations? down was yet. and this visibility give business what the could from in

Carl Hull

in both scientifically or specific, some the get base the as impossible to I in almost Yes, the business, his as wouldn't It programs. lumpiness of of in terms on well are see because sure, and program vaccines, of much into clinically, quarter-to-quarter business, to Paul. we just fluctuations those cases of those parts and as predict. success project depends really both alluded in those too comments, Kevin the in

So right trend. read don't we being And don't that much then that see really certainly now. a into

Paul Knight

do And year, customers months? your us the in six portion outlook, review Are are then -- on a businesses What of order was having to ’XX, at? they Carl? looking out

Carl Hull

we of told related we on Last time. of over CleanCap our think COVID you since all only XX% That that. has coverage spoke had I time, that look, we improved Yes, the POS that ‘XX. from

these the future much in versus much with need customer’s business, very customer feel we rely how programs of as on are truly is comfortable of how that to critical to they the it and plans, how bring themselves. So specific outside and house they rest to vendors, can business, chunk

are months profiles see individual And interested some nature. very in of raw different guaranteed and transactional materials to from customers, quite are out, XX supply them in we more others in so where year a securing manufacturing slot

varies. it So

Operator

William line next with the Matt of Your Blair. from comes question Larew

Matt Larew

But you is lead about you're Kevin, some processes outlined to think capacity online, and manufacturing going yield. higher afternoon. margin good at Day Hey, year-over-year. clearly, streamlined flat how gross Investor bringing you mentioned recently your new to that's

get I'll and maybe just capacity to speak new could look guess I gross what's like up up? is margins about started this built So choked

Kevin Herde

Yes, that's I good question. think

a as of so the about forward, I that when we've we're increases, for forward extremely in them. new been these blocks XXXX, big I book certainly to in ’XX, place existing always ‘XX. things it's facilities and one looking of to it's we and volume here And done of we more to need think, do the ability the manufacture couple trying capacity there's putting business, building ’XX, our contributor you, don't that's been look have for scale well, tell automation, still meet a

to we certainly looking our again, investments a XX% at the of extremely overall lot that's our we've have, from that lot the variable a extent and absorbs of the contribution margin over above high. growth solid products been overhead I made And perspective, we're infrastructure. the other of our growth, that in driver think seeing is given which we're particularly

and that there. little So from nice bit consistent too, the of were the margins. we investments is to And impact of cushion both very sides we're we seeing say a thing really able kind facilities additional

costs that's our own great steady then and growth control overall increase pricing continuing to additional of as labor So chain. by supply is

So our up price as as there. scale we we house of points We as vendors contracts the with term and/or acquire at renegotiate bring or commodities our master picked longer MyChem. from buy that case own in them declines some

real this talked OpEx and gross So that like year there's I in the in kind the margin a of investments we margin with given see the but about line few a line, previously. puts-and-takes steady takes a for looks

Matt Larew

about vectors Or IVT to create Carl new capabilities there. you customers then, is it on on for long-term intend specifically that be But other of used markets? of how the side, are and Okay, as started and focus with kinds to templates offerings remain there of thinking current just or opportunity be plasma be their an will leverage your to pleasant raw you some about long sort used term, able for as your our to of the mRNA? of your curious viral integrated there. know plasma materials to I opportunity update do

Carl Hull

Yes, potential still that look, the shortage I think in capacity of now, in there's certainly the significant. right a is industry future a the that's

customers, smaller think least become to opportunity that's that they particularly customers, concentrate at so viable, us with through we think And kind enable area, that some there's other can line focus, providers. I are for our the And the back going at of them mRNA new Our to with and customers of ample in of us. and be the customers XXXX.

Operator

of comes Baird. question with line next the from Catherine Your Schulte

Catherine Schulte

to guide, guess guys, $XX the for expecting I I thanks last of about quarter, about ‘XX. talked in first, you've Hey, related million for million the COVID $XXX million your’XXo CleanCap to $XXX questions. think raised

raise So from seems from was like million And protein running your MyChem, you is run when divested at COVID. about$ to XX detection then million rate that million it. $XX $XX of business

So based to COVID guide? cancelled has non and out versus, updated I'm trying supplying lower better business expectations just the MyChem’s I was getting that for, thinking the you a how get sense revenue of in guess much is

Kevin Herde

protein million mean, look, said I to running detection million you I the XXXX. $XX.X business $XX in think sure. in ’XX as was did Yes, closer

sized that's So it there. I fair proxy, a specifics takes off you looked to get But we're million number. the reasonable $XX that, in to customer, going a range, bite think not million at $XX that that of were a all we low

low of I the that's seeing in what XXs about which again, grew run happy because business that's look is on you programs, both then days, XXXX So this going with is working overall orders. the go, in the production from roughly a the directly COVID XX% excited XXXX, guidance the and in nucleic programs of Certainly little firm strength as think are we're are in where percentages. those to is real majority growth but a part And contracts, it. we core our that's of to we increase part and rate purchase customer related of And that XXXX, of coming that really base about. business XX% those acid early multiple indicator vast see roughly we're really big we're at guiding leading each non-COVID our

fundamentals think year. guidance are start we're base it goes to for where And excited from about there. good the these we So

Catherine Schulte

CleanCap? on in quarter, a step maybe party and Okay, we be about? a a up was the work the thinking then process fourth Or this improvements more should in in R&D of you're about with the third new is project? that level, you on a kind onetime And that more can looking And make topic, then of manufacturing for just project? a talk little what to

Kevin Herde

look, it's think project Yes, to discrete we going improvements, probably forward. I'll CleanCap, we on related I was meaningfully. more and we about, little as quarter a a start quick. project a to at want over talk necessarily always where bit area but how is about And as financial it talked a make talk evaluating, level, be But the the going that looking we not are, I'd say and working bit it, product Carl every can it some learned up from I for an yes, think the little we to moving component about real lot time

of R&D kind that some areas I can expand think of the our really day you on. we shows really

throughout move right of a fourth to the it the here points basis on bit won't be was the So two, But a or repeatedly same related XXXX. organically. next year project. XXX course of a that spike products or that over That a few up quarter at discrete to level we're looking

Carl Hull

to little particular and known for process looking technologies us That adaptations Catherine, leverage some to things in you're but in of instead chemical driven used may future. other manufacturing, give doing a is continuous you in And batches. of the space doing at, a we're an Yes, been not application. trying haven't exciting. in been them have as may innovative give We that some technologies in synthesis as where pretty you're to we're this applied what think before, insight areas example, process the

Operator

question Your from Michael line America. with comes of next the Ryskin Bank of

Michael Ryskin

and I the on taking and for And reinvestment squeezing the the on to in. you last up question, year for want years. business a get SG&A just in the to follow bit of me forward. R&D touched Thanks next next trying am question on sense couple there in out priorities sort I go the little the gross of earlier, but margins of a as you going

a in the XXs COVID I through more maybe, How of close normalizing? And maybe that moving on we of some that about or about EBITDA you smaller is walk getting of if maybe I'm from X%, what you we looking for digit sort mid-single or to out of profile of business. of in years, R&D, a past little normalized we're normalizes something think margin there. think us think profile And the the a at contribution, XX, high to overall could especially just talked to revenues COVID margin XX% become to the a pieces think had gross if the little just maybe SG&A, the how should fade wondering bit. I'm bit base to the I margins. sort again, part the business starts do

Kevin Herde

focused on differentiated from because CleanCap the we're again, Yes, not for it's sources look, all really the indication. for overall product demand us, for I think

paid line collaborations parties be some the from up various is in four a that'll moving did continue that's to going think bit SG&A see we like almost they're of little very, overall embedded maybe our just some a a customization up customers, two not right, of So, the basis, there. products, we about that I high, bit very we do unless development we'll very get margins provide our fourth sort at, line our looking strong, it. if we've time, here, I we're think all or we're full for estimates resources COGS are at steady. points take to with really And or into A look And on margins in closely that's continue we but one demands, lot a very quarter, spend your one that's as little do to with going COVID something our leverage think and being we of in I the because to when for line with I unreachable. particularly see that little specifically, certainly start customers you think, getting strong market, two in getting to past, what probably going staying lot what or that's working forward. five But R&D working talked with you're of third we

testing, of with of spec working our customers goods cost biologic become sold seeing we're that seeing cost work, well. mass services and So or and a more service lot where other provided in particularly CDMOs we're that work safety as

demand, But big as cumulative from allow those well saw to stay us couple the time, we years. well over cost CleanCap seeing continued for spike mRNA, last model, unique investment to get the I consistent bit manufacturing as be, business as rest is So, as buildup in maybe relatively XXXX help in the customization model the biologics catch good for forward, in from think customers up I them testing, capping. our products, most safety we're that one, have very the a we the our our given effective think structure, strong go organic of margins, little revenues and going a of profitable and certainly, investments for to the really as of faster, help also that a products offer of cost it's very R&D, very of market very with outside the to certainly all

And fairly over why we're work consistent out really So well. margins those that's really combinations looking at time.

Michael Ryskin

is commercializing can contribution in what of think from I that of the work already it, going first new terms mean, to could be some expectation last is some line. XXXX. just or talk and you the you're some processes, sort the in I bit of the use month, R&D hosted of little Okay, the of products, progress in about ‘XX, down or new it those that anything to either you back Day a

just in of of meaningful is So terms that sort how contribution? XXXX

Carl Hull

I it's that in to say a significant be driver Yes, wouldn't XXXX. revenues going

we're of technically then what the some spending what will, or meantime. if grades GMP market, you manufacturing our switching may materials in the a on we so but of grade talking from already of on higher improving, about, to is Some quality grade we're time that already offer, moving that research

research bit may been growing little we a for the for those towards in see better in So to the that a products apart. tease But trend of things grade industry hard standards we years. have quality supplying number

Michael Ryskin

COVID the of it you terms of terms then in contribution one for they've me in news one CleanCap, been and that in. in a to could Okay, last say lot I plays obviously, and Anything recently. if can the squeeze CureVac

or just So, COVID talked to just there if that not. wondering I XQ the role of you variability CleanCap CureVac XQ, touchdown I'm the know some a in played numbers.

Carl Hull

been partner been customer a numbers standing Yes, us. in past our look, and I revenue supportive it mean, factor long very CureVac significant has for hasn't And a in quarters.

that. about question no So

generation concentrate vaccine, partners very are I made second to think they program. as with their and new GSK, they aggressively decision as the moving that forward on strategically

is the we infectious any with purchases, other suggested vaccines but were expect their very be generation to expect have curve, not and at through you think process moving will that first those success see waning. they follow they programs So historically the see same question. that I to one candidate, a in forward they we of may way think that moved would as is you today their could what commitment they're nothing development I level which time similar for as with disease Rachel, more and vaccine

Operator

last question John Sourbeer UBS. coming will from our be with And

John Sourbeer

Thanks taking end. the question at my for here

company's sneak in customers. on could I this pass and increases the to, cost anyway that think just you're to on on supply and Just to pricing seeing inflation ability the the in maybe one, maybe

Carl Hull

ahead, am to right -- go Kevin, It’s John, I you, think I go. sorry.

Kevin Herde

So side. I not seeing commodity same increases it would yes, in look, say we're on we are commodity on room not the Anyway, happens side, sometimes. when the the

that's So good.

we're chain about, maturation scale economies there. do talked of I and as group, our anything, if from our supply job think of seeing and great the I they volumes, the a

very those the where inputs, online, increases we're as cost cost seen those manufacturing then seen on with everyone's people, think and the I are sorts side. So and we're happy and by labor the bringing facilities But in certainly see we is with the increases, overall, savings their there pressures seeing, inflationary those wealth I've being of of wrong the mitigated things. there's material and the growth of some

real So good I that. feel think we about

mean, some logistically, the customers So products out at not in a in point this lot and our small we're contracts nature, picking and I that. on time. us our of putting overly not certainly up And that's tab pressure of extremely are on certainly, going challenged. our have

us of price the again, think lot So custom with they comfortable our we, pricing at a being see customers I position business is I value we're don't, and points quoted. the at, very and also stable, it's certainly our

what and it's drive of margin cost And modified scale complexity, on and inputs mRNAs business sorts So and get of just the CleanCap, and or whether those at it's with our scale. they're whether calculators, it's depends what quoting most most just to of decisions. and price calculators mRNA, looking a our total lot

John Sourbeer

how appreciate questions, maybe on just in think just many I on gene therapy the serve And what on just about, And of XXXX? programs to you the this guess, just cell way yes, kind funnel. today? you to on opportunity then, anyway, earlier, gene And cell agreement Thanks. any and kind supply the building color additional of quantify, for see and that, therapy

Carl Hull

programs hard, therapy, a cell quite changing on obviously, big gene John, very that's and rapidly. a number little Yes, because it's bit of and

significant vaccines we premature. capping, market, in supply it products, are focusing comes think of a give and is of number reliable feel also the cell probably the percentage to that on the commercialized little vaccines, that but mRNA therapy share we mRNA Certainly, So when vaccines the or number you of within that on gene clearly to we of us there. a for bit not have participating and world only a is the

sustainable, that's have what reliable comfortable our a sort in market I share thirds of of mentioned, feel We the actually estimate participation high with that very Pfizer of kind two As than as market greater be and is. XX%. both COVID BioNTech mRNA may of as

John Sourbeer

Guys, the taking I appreciate the color. Thanks for questions.

Carl Hull

and to remarks. John and that with you, Thank we'll sort over and for back closing Deb Rachel, think of conclude

Deb Hart

Thanks, us. your be Forum we'll Carl. at on and the you, Kevin, I XX. today. Keybanc And XX. March we'll the in you just be Thanks, Sciences all Yes. also want participating thanks remind help Conference for for on Thank joining Capital Rachel, March Barclays Healthcare Markets to Life

So and will website. viewable replay on both presentations be our both live from

reach to forward questions. So time. me out to Thanks to we any your year. for look updating you free with throughout the Feel

Operator

all Thank you conference today's for call. This participating. conclude

You may disconnect. now

Maravai LifeSciences (MRVI) 24 Feb 222021 Q4 Earnings call transcript