Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Maravai LifeSciences First Quarter 2023 Earnings Conference Call. [Operator Instructions]

Deb Hart, Head of Investor Relations, you may begin your conference.

Deb Hart

good and Rob, you, afternoon, everyone. Thank joining call. for us on earnings XXXX quarter first our Thanks

release the available press on Our and our are today's website posted call and are at slides investors.maravai.com. that accompany

Carl will see President on Trey a for Slide you As you financial will then results our will provide Kevin can first update, Safety our Martin, our today prepared agenda on Nucleic X, review business Biologics our guidance. Officer, the with Acid Chief Testing; Buzzeo, and Becky remarks. Executive the President, of for Drew Vice Products; the Commercial question-and-answer join call following and Burch, session

remind We and from our We detail measures. refer during will measures today's statements and statements call. X financial on you It's forward-looking to management's refer expectations. Slide actual forward-looking for differ to you, possible more use and could financial management GAAP non-GAAP non-GAAP that of make results

reconciliations also filings comparable press results, directly to performance our release most just operating information additional and that for to Our refer and may on the impact condition. provides issued uncertainties the risks Please Maravai's financial measures. GAAP SEC

Now the I'll call over to turn Carl.

Carl Hull

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

to highlight over a Kevin. of give turning few a quick are Let me introducing provide call new the some quarter recap products and innovative and we before that business the updates

we $XX you million within adjusted expectations the fourth EBITDA for conference with for with quarter adjusted range fully results X. revenue first we results quarter in the our Revenue call. first were EPS start our reported quarter, Slide quarter. diluted Let's in that for in of $XX shared on the $X.XX quarter during and total the million Today,

business consistent and the While that the do our in our continue performance the guidance later field, in will go detail market the the other on second results we the more call. players into to Kevin broader factors note impact was into likely quarter. with our will like quarter expectations, revised in

the Our business base This Nucleic Biologics Production includes an Acid the had nucleic in million $XX Safety revenue. Testing of $XX of estimated acid quarter. production first The $XX first quarter. million was revenue in revenue million

you'll to a the $XX free on of our growth having adjusted the the X, acquisition. own quarter at Slide was a down Alphazyme investments million see million million simultaneously was gross. M&A. the in the in $XXX hand Debt we maintain year-end we quarter million. puts net us only the great Thus, fund our for position flow sits from million cash On in upfront long-term quarter despite Cash $XXX while $XX and our pursue million, strategy external paid position. $XX This capabilities, $X at that our end of organic cash through

space we We continue to cash. in opportunities see our endeavor will multiple to some where responsibly deploy strategic those of

out first, introduction our to growth. continuing let's close first the we innovations focused support innovation, focus finally, and ways in manufacturing year, leadership to product turn base and of quarter market first the our remain in support while mRNA Slide the To now accelerating invest needs evolving in to our scientific on business product second, rapidly advancing expanding space; on of customers' our As the our that portfolio; we X. and expansion point operations, portfolio the people on:

a know, you capping but product, rather of not of CleanCap portfolio As a analogs. many single is

product the the we about. Scientific to CleanCap the significant we we capping a versions portfolio, is efficient TIDES synthesis in Chief fact both seen RNA. are analog USA to Innovation Officer, in analog date innovative capping newest the excited messenger which market, represents Dr. strategy of have novel now vivo CleanCap several Meeting extremely Yesterday, represent capping the and capping. at for in RNA robust developed our produces the be next introduced available and have it protein of addition advancement the in San Broderick, MX will CleanCap CleanCap most Kate generation most believe MX, the of Diego, We CleanCap We highest analog here RNA held have self-amplifying believe field to this we mRNA our note for messenger particular for that any Of expression so it that caps. far. is and messenger

enzymatic our a protein drugs. process higher or naturally higher-yield In Similar our potency methods. manufacturing in consistently with CleanCap CleanCap of to co-transcriptional X XX% messenger CleanCap can via of effective our other studies, a produced RNA comparable leads benefit the structure to which MX customers expression occurring a generates time, capping products, economics manufacturing Higher messenger and comparison MX greater expression more plus than shorter result production. RNA provides Cap with and capping. mRNA This better simplified dosing

know the capping and associated methods CleanCap needs. favorable analog; stands We QC study economically testing. X CleanCap. inherent instability, synthesis need of of high including Due which consulting vitro the The of the be CleanCap to a is ARCA, the around and capping, considered stringent of cap mRNA purity can actual to quick Slide customer costs attributes reaction, provides costs a process the biochemical for for picture experiences, purification anti-reverse manufacturing three a the already We studied and in necessitates the recap messenger challenging with economic market. recently complete mRNA MX. mRNA future commissioned most enzymatic; RNA's strategic and favorable on firm capping:

purification expertise, with enzymatic can mRNA processes As we cap overall with use the ranging expected been evaluations from just analogs. CleanCap I'm And even back the very in And our equipment, technology. newer of some improvements one study, excited saw of yield and of performance greatly, from MX depending the hands. of XX% user who they're being has customers vary in capping recent associated to seen visiting XX% technology, the of own our conducting on the and premarket about their downstream capping

initial take to begun product. already for new this we've orders fact, In

X mRNA figure This shows yield and and messenger demonstrates lead additional total the the to the the An demonstrates reagent capping enzymatic costs costs estimated direct product It how using total amount quantity for to on both for enzymatic is of reaction methods. recovery CleanCap enzymatic; mRNA: require for ARCA reagent RNA three how of X $XXX,XXX reagent higher reaction. rate capping produced due reduced ARCA; costs. estimated capping their reagent GMP each and technologies gram same yields for that This the cost technology. $XXX,XXX ARCA manufacturing Slide per per for of of influential or is data of $XXX,XXX outlined

advantages the process purification a reduced savings and time including and are there producing products additional to savings. costs, this, with labor CleanCap, Beyond simpler manufacturing

enzymatic XX of capping. Slide compares versus ARCA CleanCap cost total and the manufacturing

can CleanCap less see, As than than is capping XX% enzymatic less and ARCA. you XX%

to analog vaccines. messenger with use for capping protein amount As of selling and CleanCap methods. to a the result of these business of commercial developed have expression game-changing higher that third-party more MX benefits RNA we teams is manufacturing economic analog tools additional mRNA. our a help share this development versus the gain robust therapeutics potent analysis, from The for this drive think CleanCap for and enhancement adds to we Together, enzymatic the especially equivalent portfolio,

to fluorophores, this product modifiers synthesis to high-quality Scientific new a Report synthesis. Research, theme, week, provider and Report or let's constant of oligonucleotide Four Also Glen labels XX.X. the products. RNA new for published with expand DNA in since quenchers, our consistent the Sticking resource and issue, this turn well-regarded oligonucleotide its Glen continues many XXXX publication Slide The research has XX. a innovation and of the Meeting been Glen in for latest announced oligonucleotide at serves products TIDES and as our engaged Glen breadth scientists as synthesis were

glass to bio-conjugation as and and with mixed, set a other Most to the our an Chemistry. over is group. one group product the discoverers and is easy awarded entities Click use support Nobel will oligonucleotide method may popular imports. the use Serinol with its three facilitate prime now method continued an this has for CPG of molecule use the proprietary that linkage people our in or oligonucleotides. highlight Azido-Modifier has for Serinol launch like new alkyne this labeled to approaches, controlled application conjugation and advantages I'd two of When it excellent today preparing in were label click. another Click One, Research results. The produces is labeled Chemistry feel formed of Prize most Chemistry. of Azido-Modifier expansion Glen the prime the Due popular really with azide possible three XXXX to line Serinol become simple its can products azide CPG pore expanded and a of between as

a is part we key our in for see, of that believe as can business new you in creating investing innovation product well. value this driver As

to position both win exceptional early product and an in customers technology for are adoption. We

winning raw later-stage with developments. is our to materials When earlier discovery needs commercial when to exactly early both stages the then Turning other process, we NTPs depending with for what move choose and cross-sell technology, and stages and grow to customers the with materials RUO raw their to our at the in commercial strategy. supporting tasked on the that cross-sell and especially inputs. and This GMP include of support our clinical is with our other of able materials, pipeline. pipeline, first at to earliest are NTPs to And clinical team CleanCap NAP By with higher-grade them do. them CleanCap, can their they

me you first XXX progress XX-month to the adoption. customers XX, on Let's rolling Slide turn a reagent now basis. and customer of with 'XX, with data on ago some we our One had in year CleanCap quarter share let

clinical activities, their development that manufacturing QX they RNA a These use number in or product. our order contract preferred We with offering, research as own XXX it to and capping them RNA. messenger of This this that are customers now analogs manufacturer, customers, messenger and for shipped up we closed is discovery then XX%. their be manufacturing reagent preclinical and, of CleanCap GMP year, could our stand-alone As processes.

customers CleanCap TriLink their the are using as assay today, to manufacture track stages in vitro cell to CleanCap customers messenger over also models. capping look activities method. and research We up identification customers our roughly year early of their including and who customers. mRNA target behalf last to XXX XXX group discovery, programs This are RNA from grown at X%. has These mostly development, discovery Their on very for their of early

their of appropriate GMP would take elevation support development customers our manufacturing which and an mRNA As through products, discovery continue top their to many includes process work, mature larger will scale, saves expect would IND a that into these methods filing. documentation we services candidates GMP they of where into collecting early several

Our GMP mRNA the over to customers have grown year, XX XX XX%. from up last

who customers advanced in mRNA And the lastly, is have GMP the number programs. XX clinic of our now

So means from now a examples let what of share customer this of a to revenue couple Maravai me time journey over standpoint.

working shows revenue contributor. for Methylpseudouridine-triphosphate. a This currently early customer a a XX They several customer their By customer to particular ordered XXXX, $X nearly Alphazyme years Slide products were programs of medicine. they genetic This and million using and example In they in were $X uses started than is with to ago us. also trial and I few N-X Phase now ready XXXX, a we underway CleanCap evaluating have from discovery enzymes. an move million less our phase. precision

selection customer example that in This services. represented Their our in This was have revenue journey to of began cancer XXXX with of We their over million worked manufacturing and is an closely customer and is and a GMP development screening. facilitate personalized construct XX $X nucleic with with CleanCap acid mRNA R&D XXXX, worked different their in $XXX,XXX us them product uses various construct customer target on vaccine. manufacturing initial GMP we during Slide batches. a their customer.

their phase customers invested why preclinical our later-stage support GMP work, we to we want clinical development, these progressed through also As with new which is in services them early through our facility. and Flanders

in improve can and growing their drive base, critical opportunity programs. GMP as mRNA transcription providing materials grow inclusion across see, to CleanCap our advance customer we while they you unique have vitro raw a customers reactions with our own So to other

turning Slide testing safety and Now to business. XX biologic our

clearance vaccine the and ensure Our this therapy, their bio-pharmaceutical along and with innovative purity manufacturing customers viral services our by prediction that providing products offering solutions drug the gene of and business help in support analytics, process safety products. biologics markets and cell related

to market to continue We products customers. bring to here innovate to improved support our

biopharmaceutical Hamster manufacturing. Late the we strong this Ovary the and companies the CHO to during or technology RVLP year, MockV CDMOs. to major uptake kit Chinese announced several biopharma removal retrovirus report by or RVLPs produced Today, cells, and kit Kit. like This last bioprocess launch quantify by of happy enables particles, of we endogenously scientists are in market

or tailwind recently origin. which on recommended a animal closely business. considers cell are viral for endogenous evaluation on we biotechnology the CHO-derived Conference Harmonization, human addition, viral published In this published in from could the the monitoring guideline derived RVLP, ICH, of the International This draft final is If a products or lines the safety for of revision very of positive particles, clearance use be experiments. guideline, BST entire of viral

and -- and March, solidifies can purification as cell expression product quality and me, therapy. BST kit expansion use PGXX Kit. excuse we launched as platform release team process our ELISA testing. In our well The PGXX customers provide HCP development supporting to this represents during gene the control kit for XXth commitment in Bioanalytic the analytics and

and in highest to and to quality offerings most we As innovate technical of the to our support, continue offerings the needs. services customers' comprehensive in products meet scale superior our DST NAP, catalog and ensure

moving XX Now Slide updates. to and on organizational some

of First, Acid we're welcome to Products. us Drew Burch Vice as President team. Nucleic Drew our in joined leadership to April Executive happy

us sciences those has team him to operational, supplier strategic Drew, Maravai life on provide an with on of of over division years our products industry. our life continue important customers. important of industry. of and trusted help as For commercial best-in-class the experiences incredibly in support for of NAP I'm scale a and to momentum XX not to acid as itself products the operating role differentiate forward familiar nucleic and he financial playing chemistry I he continues will and the that look you confident build work the the sciences

the Second, the acquisition is going Alphazyme very of integration well.

decided qualifying addition workflow adjacent are Alphazyme of enthusiastic We've Alphazyme the support acid to nucleic incredibly about commercial provide We the to facility capabilities actively in within feet that acceptable combined with to our production scalable and enzymes universally of building an and manufacturing also infrastructure, add their extends the into their X,XXX services remain flexible space. expanded square footprint R&D and team. enzymes an our critical a opportunities. our we

and announce inorganic opportunities look active to also pursuing We in to other in acquisitions remain growth forward additional being XXXX. able

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

is Environmental, business to before covers an I making examples report evolving how look ESG are positioning page to I'd impact report our Kevin, that culmination and This but over and the some scaling comprehensive Now key the March, during you responsible website. on stakeholders governance the deliver socially we to you progress I value fiscal of turn quarter know I like fourth and highlighted rapidly the into our on with growth. we enterprise-wide effort report managing the The late growth of environmentally holistic let call program, while rapid provides section to year in a XX in to Social review positive our operations our published of sustainable tangible aspects our XXXX for and our call, our Investor stakeholders a our encourage report. manner. of second and expansive

of Slide report. On from some find the the XX, highlights you'll

a apprised being work We We to on strong team's keeping committed are to are and proud very the look date of forward to you journey. citizen. corporate our

Kevin details projects. to an and Kevin? our more quarter multiple ask update now provide on facilities our I'll on performance first cover expansion

Kevin Herde

way. financial I'm and happy the in Carl, good an review update the and we you, on facilities have provide quarter our results to our expansions for everyone. multiple first to Thank afternoon,

XX. Slide on Starting

in revenues seen QX press XXXX afternoon, were million. As release you've $XX this our our

million, QX was As we our consistent XXXX XXXX we of anticipated range high performance between $XX $XX earnings and million stated to in with QX in thus, quarter the of range and call, for anticipated in the was end our expectations. our revenues the our be to

shares. fully We weighted basic our EPS. A EPS diluted net as Basic income shares EPS, to Class adjusted the and divided A diluted fully present average attributable by EPS Class

interest line are Class net both shares Class adjusted divided per Class in EPS of was EPS also income EPS income our fully weighted was for share. and while average non quarter diluted internal with B prior Class and to Both securities equals the quarter. diluted were dilutive extent by fully dilutive. our And and A EPS B adjusted weighted dilutive other $X.XX securities. by expectations Our the basic both This and for diluted the for and the $X.XX adjusted A they diluted equals fully average other noncontrolling to net the divided

to Our acquisition-related million of first the attributable for GAAP-based lower loss net reflecting of impact $X.X the the XXXX, before was quarter and amount interest the non-controlling revenues costs.

EBITDA, million adjusted margin we resulting margin while Certainly, in in Our base. for of XX% as of revenue EBITDA have seen an QX, in than result EBITDA XXXX. the $XX was non-GAAP a lower a QX measure, a lower our was

even our including seen is in However, to in being the companies years, strong we've most base our larger still three compared much almost our revenue lowest margin with when mature and space, very companies.

overall that growth. even quarter in XX% of group is compares adjusted when fact, of six infrastructure at investments Avantor, alphabetical a look Fisher, support have and to in order: margin companies future to Thermo QX here Bio-Techne, of ongoing This the Sartorius Danaher, In well and with that substantial of our of revenue six low including, XX%. reported we Repligen, our already and our EBITDA, the in average companies EBITDA true XXXX had selection in

capabilities. We on continue strategic investment require our which laser focused in and objectives, continued to long-term overall stay invest our the

XX. Slide to move Let's

sheet we Carl mentioned, cash strong flows. continue a As to balance and have

the quarter XXXX, acquisition cash collections million based $XXX well flow as quarter, our cash the in million at a allowed our GAAP the first we XXXX. as strong March from capital generated on to and quarter. flow equivalents metrics Alphazyme from us in and strong as fund operations This $XX cash the XX, totaled AR QX the operating cash Our in both in expenditures mostly

actively $XX million allows M&A Our with opportunities. quarter was debt million structure debt adjusted evaluate capital Adjusted ended long-term as free define to flow non-GAAP additional the to cash This adjusted flexibility expenditures. and less in and cash. as million. for $XXX $XXX cash we QX and We maximum EBITDA free continue measure cash us in flow

As we our managing been treasury tightly operations, look cash. we've at our

cap interest expense place, And With we below is in at excess overnight our contract capped activities X%. overall cash sweep effectively our on have our nice gross the expense liquid investments, X.X%. is net interest with interest yields and

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

segment a As Carl approximately of for represented for represents the quarter were quarter. expectations of the Production million Nucleic margin for in quarter the first total Nucleic XXXX, Acid Production the business from CleanCap in line of company's million quarter. $XX generated XX%. in our and our million with $XX EBITDA mentioned in Acid COVID-XX adjusted customers the in vaccine quarter revenues our first $XX earlier, XX% in revenues revenue the

shipped We orders Now of about quarter guidance this going of we revenues. our million our total up and to full to in percentage demand year million see second down our to CleanCap XXXX and or full COVID-related committed in total the estimate. did have maintain see $XX contributions our the total brought additional here for XXXX XX% of of year $XXX about

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

of the in Our revenues adjusted a Biologics business in $XX margin EBITDA and Safety $XX nearly million quarter, of million XX%. Testing the delivered in quarter

late We highest the the since will Our from was of and XXXX we impact return the QX normal believe the believe Biologics level see leveling of the hit of in the Safety last quarter and out quarter here region we're China in to seeing XX% revenue QX to up shutdowns, business mid- XXXX. of XXXX. a we China Testing business second

with of were the our year first recently the fourth These XXXX. million in the the prior expenses slightly quarter EBITDA from segment are associated $XX totals adjusted above not completed in continued increases expense build-out our from of shared quarter quarter, Corporate are increasing functions. that included and services both most

Slide to XX expansion facility update moving an Now on and our project.

We expect Flanders taken and have and for completed in same we X building the X Flanders the quarter. occupancy, second construction of

for also our working our We building Biologics out began Safety business. of new Testing

enthusiastic from our as customers teams freely footprint. our the we Our expanding offer remain about capabilities facility unique can

and Slide Turning XX to our guidance.

million our we half the the adjusted total revenues, COVID anticipate $X.XX CleanCap growth which in $X.XX million We year, of QX or results came in remaining With likely the to full that projections of normal estimate mentioned broader are at $XXX anticipated, most million base $XXX million business acknowledge year. with $XX more a the quarter QX. and revenue $XXX of $XX XXXX a we updating CleanCap our year million. EPS This had the in revenues gating from million of second adjusted so, growth range previously regards around and the $XXX as the of to down includes million impact will in EBITDA of the a contribution to first range then midpoint $XX between is biotech we likely the original and Our sluggish market the million. to of puts range diluted yet see approximately Thus, $XXX We for to million. contribution fully our guidance $XXX in overall COVID demand. occurring our

shares million $XX Our a an as as $XX $XX XX%. $XX GAAP million. compensation, rate million as EBITDA on the This of expectations count guidance effective to and between out which on also net item converted be is share fully an tax $XX $XX show of Interest and million to million to reconciling a also million; includes listed adjusted non-GAAP from between XXX interest following based and amortization million; of we Slide income expense depreciation XX: stock-based

of Thank and for you for today support time your your Maravai.

for the to Carl some Now back turn I'll final call remarks.

Carl Hull

Kevin. Thanks,

as business right opportunities So areas. leadership high-value to with innovate build we continue our messenger other adjacent wrap in up and in target and positions base product markets on growth playing portfolio the Slide are RNA for exceptional to XX, strong in we

our putting organic product capital We are and to innovation. human flow in strong work our cash investments with facilities,

to We for for will bolster provide opportunities solutions. market and investment position our also with additional continue our inorganic to customers look

We of pillars. business, continue excellence operational growth are foundation strong people, to a on and our our as committed to sustainable strategic for and three we'll building base focus long-term innovation

I turn would questions. like to back for to your the call to the now over open Rob Rob? line

Operator

Your [Operator Instructions] the McNamara of question from first line Capital Markets. from comes Conor RBC

Conor McNamara

all the it. Thanks for I taking question. cost. on the CleanCap And the color thanks appreciate for

Some of those slides are very helpful on Thank the CleanCap cost for you and total production that. cost.

one got I've business one of kind question. financial question and

So $XX kind -- can and and is release some inventory the hit, of where coming maybe will slowdown. some stop did where from? out normalization revenue Because you on customers first in impact there. call I about parse just million you the out But that press what biotech Kevin, falls? which talked that you

Kevin Herde

was I quarter be we going first Yes. we businesses, the more currently second to thought say I contained the here Thanks, of softness to say, Conor. would are in would quarter. the has sort sort in seeing what trickled probably to both of

I we more our more the see think base now in NAP digits in the growth year, probably mid-single Biologics then business, business probably Testing the Safety in mid-teens. and the for

call. as ones and those seeing expectations both our XXX original shared we're you're coming points points on opposed think just of of reflecting what a in really kind our last I basis of being we current the here seeing to few up the kind QX basis and full years quarter hundred So of to out

Conor McNamara

QX help then time higher. Got on the the customers. you just the I think customer was it. last -- I GMP clarify XXXX, that just you was shared number Can And remember

that programs you know of should just don't falling Or progresses comment the from can about how we and XX went just XX. on think that? how clinic? that's I You out if So number to

than think number the I that. was higher

Carl Hull

don't you, some Kevin, don't of front in anything there. I I if color Deb, would give honestly you or know that have recall. us

Conor McNamara

as maybe just if and curious net come clinic customers programs because you that I'm the that customers don't assuming go bet that's out next have I'm into customers No, like endpoint.

And progression just a to of I that? if about of think was if curious seasonal like So the anything there's that. kind or it's way

Carl Hull

Kevin?

Kevin Herde

XX. Yes. ago. we a mRNA CleanCap were Look, up where I customers GMP think from are the year That is

I the number XX at tracking. think in And quarters it was for have that roughly we we're in it's that a currently clinic, been now. closer time. then That's the to point XX few same

And seen one in preclinical too really phase, people again, many out least into the as phase the move people on our don't because of we still not then haven't exit and just at really too pipeline have market. I -- product clinical many you just obviously,

not really slow of it's say in of I'd right there churn now. a of there's sort So lot a just X progression those pipelines.

Conor McNamara

Okay. And in, one can I more I'm sneak sorry.

after that customers? call the competitive a MX, on the potential you more make that Does does just on expand on Just go the you to as TAM? markets that give market you lot more in the

Carl Hull

share CleanCap users gains easy they've in the directly that, capping mRNA, with protein increase think right the of production on long using for that methods. the the enzymatic And that we will but time yield and capability will or effectively is equivalent we're for now, even stay to of go with an MX. relatively reason focused was attention, And that the against competitive original it And think get methods I line, enzymatic everybody's enzymes. and Well, were if that bottom enzymatic been amounts them of methods. close,

I substantially this they have will a than improved much think might at it take and them with before. CleanCap more look serious make performance,

Operator

from the from question Catherine Baird. Schulte line comes of next your And

Catherine Schulte

base U.S. way of couple for X-year But much involved examples driver of you're customer of your NAP we that ramping a being by program at highlighted up? new a sales that look meaningful over already terms a guidance are progress. I starts programs if ramp year, you to first, was this think how period, is in guess, of wondering I clearly the a versus for programs about and for is driven guidance, in there that's

Carl Hull

Well, Catherine, it's a good question.

I comment his also on what view afterwards. on think and Kevin can

Kevin Herde

the customers, as our I the we is focus. well migration wallet existing customer growing that as perspective in what say, pace really most as to well and stage, can that's Yes. the Catherine. early goes we're as our as these would with of a really base locking at from and that seeing really perspective, as of really progression, then this of GMP a the both products, technology level to strategy Thanks, share from RUO and say base, I'd

customer So meaningful haven't our additional embedded guidance is really part picking of incorporate customer family up existing customers that in thus been does not our It far. really that base.

Carl Hull

just from as their would in you I to And programs with they process, both less us road. customer as through see in orders of examples. of grow are customers the down growth simply the can initial those Yes. than go that of year Catherine, the discovery add, those the relatively they significant And size or that us given those two

Catherine Schulte

Yes.

got for to more about a 'XX? midpoint the half then reach that we is you're if on And in guide, for way if starting ramp? -- Okay, margin, back think think And of expecting like at way a the EBITDA about the anticipate should year XX% the exiting mid-XXs, fair the about year it. to the to full we the point

Kevin Herde

of potentially the level be XX% would is given here up that Yes. additional imply. just the in that in -- back assumption at to higher COVID in We what guidance end the particular Certainly, XX% quarter. the would revenues fourth the

assembled of infrastructure. we over it's sitting, a from are really revenue facility our and contribution where workforce Frankly, kind

in You'll quarter. a see low here even

which XX% went some margin, slightly detail. had average our as I is think peer into above we I

to control have of margin nice really here the base that as we and that revenue rapidly have about enable cost, increases. great we well-defined will certainly our inputs facilities is what thing the But us expand a

revenue business of really that certainly, to is that modeling our that function And go is what margin part of be when into number XXXX. as long going big model we a term, a we expansion that's exercise. So

Operator

your line And from of comes Goldman next question Matt Sykes Sachs. the from

Matthew Sykes

Maybe kind softness of one into could dig questions just just QX. seeing previous I that you're into if the about of the

modeling bit make both, probably the given a biotech couple other of there's inventory number -- headwinds, we a the additional to just of a our or it? it's understanding want obviously emerging sure little that of softness dynamics duration so that the that frame or -- of of love Just kind Would help can sort it's one spend or of have get both overhang. finite of we and and color we're if just to a just these whether

Carl Hull

anything don't quarter. the XX to guys have really already this that add we've think or reported I eight to got Matt,

I think differences our are experience the is the slight different same. business. There parts in of

-- So vaccine has been the you on reflected, knows, have some definitely everybody build the have the COVID business, who's involved production. some of you had side which in might inventory

or rates places, softness to recovery. see the other CDMO growth then And you China more might related

all that? things I a the of shot those than call at want other one can't know it. part So out I that's you to take of are more if don't significant. Kevin,

Kevin Herde

that's Carl. think No, spot I on

in I'm on contributors seeing a think individual I at based we out China each. rolling parse the at off being and But the our see impact obviously, half certainly here this temporal. the factors. inventory guidance. we're multitude of off the And stage, to of very think hard first It's least I as some burn

and second it's into into kind as at the and ability we to programs the the additional good how customer as come growing, the have continue going half And we demand capabilities, that's number to down to from subside as the our I 'XX. certainly, From look that's base and and build of the underlying existing -- we products once that those then, about customers. how well of feel think growing, headwinds going to

Matthew Sykes

the transition them. one second you who And been able the Got GMP customers my at been with look there's we just complete. been if have to to transition you've appreciate the build to next or I just out, And it. it. X Flanders that some then other know not in then complete is question able in not . the quarter, past I Phase

In those production for that what those gap closing you we of issues Flanders lot might being terms have get feel you'll past in of that GMP fully of customers? able that have you to of some in do you're once doing through with RUO, solve the alleviated sort had complete that the facility, a and for

Carl Hull

don't dual from roles on of the as we well side. to ask services comment why the that Becky? the business Buzzeo both commercial Well, Becky as side her on

Becky Buzzeo

Yes. Thanks, Carl.

of want that have to needs Flanders that go to the a strong only both addition the into of who and then tech late-stage customer late-stage journey intent road is transfer up be really X we today, those our building into do is a X our to it's believe the molecule to manufacturing and manufacturing. meet manufacturing Phase So Phase miles be do of with the X our to the have the we the to And RUO facility and able go the X. ability MSA And do team mRNA. transfer follow facility Flanders very able here, clients over, couple beyond of and of that That easily. we'll

Operator

Dan comes Suisse. And question the next from Credit of line from Leonard your

Daniel Leonard

So change EBITDA Or clarify is there steep. Can to your $XX dropping on taking question, accurate any in forecast? that's parts the margins sales forecast the sales through. you're are revenue forecast response in million It that fully the to are my the not reduction first in consider? other whether pretty you moving and decremental that in change suggests countermeasures

Kevin Herde

Yes. Thanks, Dan.

midpoint think about $XX guidance I about believe, the midpoint decline $XX specifically, I was revenue is adjusted the of the million, million. EBITDA of the

XX% dropping it's that So through. of about

things to I of And mentioned that previously. goes just some the really,

variable We have have painful have don't as up. margin. the a down, below a sort We we That's of when here. the of margin lot line. go that's a what go It's very gross more nature costs of things but great of high sort things variable little just contribution

of continue to investing lot what going and a we're in perspective, so. our we're do is to the from really And for future,

which saw in a of the with MX. of look at you lot here investments which some our fruits if you innovation, were So of

which and build-out, us, CleanCap commercial sure and important and making driving we're far our seeking growth is using as products to investment can, that by the adopting and we as globally services rate to. all Additionally, long-term and as a customers committed realizing incredibly we commitment the get

started finish Again, then ago, couple our years as something lastly, we footprint. a critical facilities up to we move forward. to of of strategy the And and is we think

lack see the costs. see revenue adjusted as going of So just below-the-line impact our to high you're the variable proportion that of a EBITDA move, you because of line

Daniel Leonard

phasing COVID phasing And around year QX I on CleanCap case, that. my on the the And then is implications Did margin the hear million? of appreciate that's the margins. Kevin, $XX both correctly expectation revenue is throughout the question, I and for that if follow-up year? for the what are

Kevin Herde

in quarter. not $XX COVID-related anticipate second No, what CleanCap contributions we so of said, That the was we do not said another million what I about is we or here believe.

imply also million, have is between we of that shipped XX% quarter? would book. be likely in We fourth the the what would mentioned guidance and remainder, what And our is in which committed, roughly $XX about the million $XXX then

Daniel Leonard

So QX, minusing in taking million expectation million million of I and was QX. the the $XX in $XX $XXX and

remainder, that were what seeing? So $XX million not plugging into you that is QX,

Carl Hull

half. the In half. back would the It in be back

Kevin Herde

Yes, which and it the million, in that say anticipating would million quarter year. the that committed be in shipping referring we then back between XX% quarter was in up of the the I half. delta roughly some fourth to would more would is $XXX in the be as that the of $XX I part third spike would the well.

Operator

Dan question Arias next comes of line the Stifel. from from Your

Daniel Arias

that a that the the that there in for are you the in now Just about if anything these people. appreciate you Thanks emerging increase the the customers on trying things of big obviously can tracking update focus just mix maybe Is are get even for questions. have I out non-COVID we for Carl, vaccine say here. number entirely? sense which some the a the areas or in way accounts accounts of to separate

Carl Hull

seeing existing would we're along we've are been the that seeing at obviously we stages servicing way. Well, COVID thing that But for I the continued that's say players not the only sure. new is various accounts, activity from

is but are there others biggest the program, Pfizer-BioNTech the . number beneath of obviously, a that. So

in for truly hard versus application. the many us cases, It's what vaccine separate though, application therapeutic to is a

you So is look and right? we've is is doing reason at -- most spent same the company All that both, the the do pipeline. for can

technology guys see CureVac, shots the goal. multiple they So Pfizer, across BioNTech, platform you'll leverage are different that trying others, like to and

time spent assessing is us We've to that, of a that imprecision it So but and COVID, we've are got a lot feeling hard some still think with in those good doing those for certainty numbers. for there's just know there. we

Daniel Arias

for in that of to back-end better Biologics that some to Okay, safety And in about some is you I it a year? is believe, of we then talked in that maybe back normalization the to mean okay. Or that, Does quarters? number digit think Safety China the Testing. the on mentioned acceleration should across Kevin, expecting order testing, to half. loading get mid-single you think sort steady BST for

Carl Hull

the -- the then ask Kevin, you don't we Trey on Trey ask numbers. you to Why up can comment don't commercial back side, why it with

Trey Martin

Yes, Carl. Thanks, sure.

that. generally -- in are as encouraging out here softness some But softness many 'XX. customers the started so signs We of see the we the reported from that China climb second a have of others half We've getting are we'll been industry seeing geos. really across that

our for the rates to that to the would optimistic mid-single Kevin in the half, what expected be we're when, to definitely market out. recovery in So consider out mind, but which it's of second called back not a growth we and matter if digits averages

Carl Hull

Kevin, anything to there? add

Kevin Herde

No, agree. I

perfectly. it up Trey summed I think

Operator

your And Sourbeer next of line UBS. from comes the question John from

John Sourbeer

it's on And break that those within segment. guess you've could pre-revenue the base wondering was it the little I where even of bit has acid there are down guidance? for nucleic slowness? percentage that, biotech. on Or a been the just customers I more really broad-based updated if more you is seen what

Carl Hull

to focus customers focus down any some resources would runaway times the on away. in the pre-revenue going completely couple have, of manage cases, as don't pre-revenue shutting it's -- commented, we mRNA, running the we're the programs just a of reprioritize I their They biotech programs programs John, not think But companies and from on I just say there's Yes, number reduce biotech past, see in of we been phase. a their that if down internal after focus. or those shut that's seeing numbers of fewer they're like that

John Sourbeer

quantified revenues would you have what percentage of be? And it. that Got

Carl Hull

it. couple at We of cuts have a

a own better bit some to our say actually work bit I to quarter. little give research. not insights do might seen only numbers we you off have would to date I our imagine, book I wanted on primary more a and comfortable have hold the to And As immature. little with you are into the next

for that. think something we you we'll have by So

John Sourbeer

one just And here. one Great. then last

You the of in, fill looking couple last kind some remarks, of where you in year? to prepared of on the should be that tuck-in opportunities color think, to something I mentioned Any a something -- there's over inorganic. deals done additional think the to times, just do you've similar

Carl Hull

mean, organization. have part of super happy the to as Alphazyme Look, Yes. I the delighted them and with team we're

I of hits exceptionally Maravai that the historical model well. think

them. that look for I then may will businesses of or And to we're be at currently bit be on in that the other we number there more find It not a can complex. at those be a market prices continue the think would businesses to consider reasonable control creative slightly for when look gems of we us. when companies can unique trying to some to carve-out little of more structures deals we might that be assets involve and/or

be bit in still Hopefully, size in but they'll little revenue in of remains pot. immediate contribution, more terms creativeness think larger bit deals. in may a see you I sweet Alphazyme So of sample little a our

Operator

Savant Tejas the And your of Stanley. next from line question comes . Morgan from

Tejas Savant

on want Carl, those call, to the top I of to an within around go GMP right NAP. customers earlier actually, the question back Kevin,

that basically XX. you've XX XQ, I think is shown about question of Today, So the in you had them.

So you ahead of business you've of customers of bridge of for fall? in loss number last having a just important lot an of perhaps, metric not today the It's the have can highlighted earlier GMP investors Flanders. versus light us you

any be or . bridge So you helpful. provide would color could context, just

Carl Hull

in the As I numbers so of me, can't. front have don't I said I Tejas,

Tejas Savant

it. Got

change. perhaps Okay. to do goes safety international to you testing, frame plan? harmonization highlighted time meaningful business what for -- that if all on Over this biologics be the conference guideline Then you and your

it on of And of how who that is alternatives? sort sort disruptive as the update, we really guideline I using be other for already not are of this about could of sort that, think mean, customers side consideration? Or a

Carl Hull

way that viral with testing Well, think and very it because mainly risks associated disruptive late-stage look, of the it's be currently clearance can costs the practiced. I

to everything end it have way you at go the processes a development back test your going that if looking And of that months, at to program. remediates the around your not to that. of then day, to test, it a So get you you fail development of in bet on such problems final could saw a years,

utilizing kit gold about discussion along marker incented surrogate of standard might they should not very in that customers the availability road. way a of are So coupled final guideline be certainly clearance the interested to the even immediately as the perfect testing, the product time. have for the they the whether a at the we if think end a with changes really And change product, comes their at historical

Tejas Savant

center mentioned know your That's helpful. I as their any in want Carl. raising And the salespeople, on then many on base, how -- something customer so, biotech your on off radars? XX front that's next you you your last and exposure. for here anecdotally, quarter money these, But just or to one months you share is talk it. of for until SMID-Cap can next me, color the to you hold existing Got

But around just the a of conversations given know excitement I mRNA. these lot lot helpful. those be the talked raised money customers you've of that in past updates a the would pandemic around during any

Carl Hull

it last new at that you're XX seen certainly So of from we months. factors, obvious looking in, over thinking, because perspective money way have that the if out the come Tejas, not

a seeing that about. period amount that companies during So of capital demand the raised here from pre-established I is we of we're think talked significant who time

certainly that husbanding round? That were? about more lot a yes. they to less they be certain capital get are ability than yes. Probably another they And their Are would

of have open us. gene that's So that's I may different bit And wide than like be XXXX, window. there different but timeframe, we a cell think particularly you're the therapy for and small sustaining trajectory about still were to biologics mix, that appears world. sort And thinking of as XXXX and Others exposure. was a little a it's fortunate very molecules, that

of today. timing think about Okay. terms that's it Rob, in I our

you'd So to over call to turn Deb? perhaps like if the

Operator

final turn to the Deb call now will I remarks. for Hart closing Certainly, some over

Deb Hart

just and a we time We wanted to today contact anybody Feel evening. all nice very you of much. your still additional to in that to. Thank time questions to with joining get any thank out didn't to was free me and you queue have us apologies that taking for Have the day.

Operator

you concludes call. This participation. your conference for today's Thank

You may now disconnect.

Maravai LifeSciences (MRVI) 8 May 232023 Q1 Earnings call transcript