Earnings call transcript Q2 2023

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Operator

Thank you for standing by. I would like to welcome everyone to the Quarter Two 2023 Maravai LifeSciences' Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now turn the conference over to Debra Hart. ahead. go please Deb,

Debra Hart

Thanks call. us everyone. quarter our XXXX earnings for afternoon, on joining second Good

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

today Officer, see on the CEO, on joining our As you Hull, are Chief Executive our Martin, Financial can Trey Herde, Board. Carl Slide agenda X, me and Kevin of new Chairman join President Acid Chief Vice Executive remarks. and call will Products, Commercial Becky Burch, of prepared Nucleic General question-and-answer Drew our the our and Buzzeo, Officer, the session the for Manager following

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

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

call to turn the over I'll Carl. Now

Carl Hull

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

last details guidance. officially we his on this provide During Martin, took for our Trey welcome who Maravai's our and July But over introduce role and the will results financial the first, call, I to XX. quarter updated of want new CEO,

and life with seasoned ideal track his many an He executive As strategic, to time Danaher. Trey combined and an record. global highly of sciences IDT brings relevant mix acumen, operational know, a is experience operational at of with outstanding industry from you scientific Maravai

strategic integrated aligned and has his of of and global he Maravai's growth the execution particularly to well plan. Over long-term experiences operations acquisitions, the built led multiple complex lead course career, successfully

high culture its Maravai and I motivate he right He Trey performance. I ability within of guide a integrity a know cultural seen to Maravai. and to firsthand is is growth. teams with through is take at next already leader and that of high excellent phase fit an results-oriented the the have CEO innovation

Before every with our each observation can could extend you confident the across and to most dedicated my we world team we more I day. has career. proud I to the excited that customers Maravai I'm deliver who employees been the to future, that turn objectives. I leadership thanks experience long-term want rewarding the the are have about single of not achieve accomplished have serve the communities over I together. Trey, it and we the share in our my and we on enthusiastically to of what and the needed our be where team, company's their I'm going leading sincere what to technology talent together.

Trey now If we'll many and to you'll to ask Trey? himself Slide other better. turn some Over time, I'll share to introduce get have X, know early him to opportunities observations.

Trey Martin

of have become company this as while for It's immense company. Carl. tools the I scientific customers elevating potential communities and an science and privilege at the further choice. provider to you, we Maravai deepen CEO for our serve juncture with me Thank believe important the a the connections the and our to of life biopharma honor

experience that nucleic technologies our strong qPCR the acid During mRNA, gene believe gives Maravai overlapping opportunity history field believe to to several mRNA expertise broad the us the in health. What the my in needle of this the human sequencing, mRNA has is I of in a the with many the leverages now participate XX-year waves career also in and the biology position in and convergence synthetic for with had to driving is strongly recent I've opportunities long CRISPR a fortune therapeutics to a pandemic editing. from conversion rapid technologies, of I that particularly of and learnings chemistry. good growth genomics, move unique see I next-gen field. from from technology

I'm focused the deeper This I levers to leading the value to work to base to with a and the at unique business the and the is understand be the to rapidly as the to transition our time serving into the growth expanding support that where on President insights at excited and to customers. new the gene mRNA, it business and our we in months unlock company forward the business. across to focus Maravai. look leave needs my innovating of as been work we evolving a company as for post-pandemic enabled opportunity, here seven I future a transition full part team, and help potential past to over Biologics opportunities navigate of bringing role many genomics, me fantastic the Testing gained I Maravai It's of have the therapy Safety to cell as we're

have learning first the Production most sessions members to labs, Acid time In and hold strong meet technologies services. the the leadership with with XX team a value-added I'm a I've customers standard spend our innovation starting Slide and base what Maravai, Across and CEO, only many gold X. of me begun, customers' Nucleic employee excited already motivated team needs and through segment, partners. about, my had tools with opportunity will as of but on strategy and commercial share has let with My products just the and days our meet to meet in and determination we highly

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over Our the approved CleanCap alone, franchise in meaningful flagship differentiator with billions patients in is the incorporated eight the reagents of technology brand CleanCap XXX in years, worldwide. in a three over been strong XXXX dosed products marketplace. and cited publications in and in including clinically XXX last have

MX newest few provide minutes. and the in a continue science, on We advancing analog I'll our an update CleanCap

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time in We've to late turnaround through in RUO, turnaround accelerate time demand. dramatically programs suffered XXXX. our our the engaged First, since pandemic

has enhanced streamlined able the efforts, for expertise. ordering XX% turnaround to we these Additionally, our added and Through processes added in been time manufacturing automation six analytics through team commercial our our and and more training teams a sustain months. than past for in-house reduction

proactive meeting saw increase to our off. customers' demands. services, experience Our June, in In we're customer an for are commitments RUO indicating efforts improve paying we

recognition GMP XXXX. we in saw for strong to QX, signed of support manufacturing growth as our expected in well services, GMP Second, in services doubling funnel a versus as QX contracts revenue

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addressing our those X are Flanders that complete. nearly with facility opportunities expansion We is

transfer Phase I late our programs and will mRNA tech continue With Flanders be to able X state-of-the-art site, phase manufacturing facility. the customers their manufacturing post GMP into

This successful been substances. our key manufacturing to with optimized customers for chain. is manufacturing a is capabilities processes for and/or scale-up, building each use direct analytics we're and GMP process supply our with of customers differentiator partners our develop late-phase in years give Flanders need to we've manufacturing and program to and reliable what path making customers from The that drug and commercial team validation, line mRNA to should provide qualification XX a experienced Our X over seamless capabilities.

year. there On you'll during these there and continues new customers. clinical entries the mRNA pipeline X, see accelerate, the are of number growing XXXX, clinical to XX were In Slide

end to non-COVID pre-pandemic from of well commercialization. XX the discovery indicating first this our XXXX, larger four be seen mRNA than velocity are positioned moving into times already pipeline the have We customers' first enter This by clinical through be choice demonstrates the year. to of in investments stands phases clinic our the drugs half programs of levels

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to Let's Slide X. turn

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our very products believe like choice production the makes from customers edge in the acid NX-Methyl-Pseudouridine, manufacturing to us NTPs looking other Cap analogs work to common our for It's of of expertise need on leading We to nucleic to long-standing supplier enzymes. multiple to when oligo oligonucleotides, technology.

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agreements. formal continue supply under and We license add new to customers

are customers used we've for as newest customers in of the partnership manufacturing see studies. their in delivery for critical mRNA The of Similarly, produced frequently the vaccines multiple of new and Top in encapsulation developers mRNA systems looking quality to and drug in of for provide developers novel gene and of and of half use CleanCap product. our the manufacturers editing their agreements. as year, of the first and and region. include for the members standard class innovators executed as lipid infectious of from guidance this enable Pacific diseases During their drug value key Asia technologies. three LNP reliability this many substance development is discovery substance The drug progression mRNA the to well

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XX. Slide to Moving

will Our exceptionally organic us additional to allow strong, which balance our to pursue initiatives. augment sheet M&A remains growth

are efforts differentiated on focused customers acquiring serve and our to Our them additional help succeed. technologies here

for with future, base of prepare the and to growing expanding As improving on make revenue our impact ahead leverage. our excited we and what the health. we and that our confident long-term have I'm about human remain completion objectives. together margins XXXX, talent I'm deliver team, look can technologies to to we capabilities focused achieve the XXXX we business a on and our meaningful

inventory with $XX results strong million, QX turn me at in in call let sluggishness came biotech the the QX we earnings NAP we XXXX services headwinds in discussed 'XX market line headwinds XX. to we we the last our earnings our so for roughly dynamics QX our and during mentioned $XX Slide products revenue and as include million or the QX quarter. discussed as that broader to Those in Now on calls. our call quarter's in rebalancing navigated

are priorities seeing changing of lower the we in customers venture private broader wake equity-backed of Industry-wide, uncertainty their levels and economic investment. spending and

and which efforts, to become programs. stage capital their development conservation a leading As is research more budgets key and prioritize customers result, focused customers process, causing has to on constrained decision-making have and strategically longer

levels in the inventory industries. bioprocessing leading players encouraged positive several this customers we to services quarter. We From all see CleanCap near-term approach. up performance the affected highly the continue to business-as-usual for Despite demand can a to our built of products the what lower has the pockets as business return some slightly during were pandemic, inventory by they we up XX% gather, clearly situation including and softer-than-expected during CDMO QX, performance, saw which in I'm sales year-over-year in non-COVID utilize

smaller been I We non-vaccine innovation We CleanCap been higher MX from to customers companies. from call alternate mRNA opportunity believe innovators encouraging. that lower saw more QX efficacy, come for many both. vaccine share pharma especially yield received we product its announced the higher a mRNA-focused feedback and orders This manufacturing and as product for that from game-changing this us have has a from MX is approximately already interest has and protein from customers group broad leaders capping or our and may methods. vaccines XX from repeat new is dosing product the on that And offer of positions potent differentiated large gain encouraging uptake Early has and a different truly think therapeutics orders.

continue plus approval Safety XX CAR-T therapy Within Cygnus and segment, Testing approved of China. CAR-T to in we and the out XX now supports our presence Biologics cell in first-ever gene the space. products, therapy gene the expand cell all

interest MockV product our early within positive continued in line seeing also are BST. We

Additionally, flow we operations half $XX quarter million, cash from bringing cash a second the to of solid flow the total of realized operations first million. during from $XXX

Kevin discuss moment, which Our detail revised of results into modest for expectation year. more in the half account XXXX, greater a the second market for the will and in outlook QX takes

weakness approximately anticipated improvement full trends the reducing funding and $XX is expectations for million second biotech revised We result for and this industry accounts shortfall of as previously of the of activity in half. the mitigates spending of the the and market outlook a as to lack are discussed business properly all economic pressuring economic stance and the business. base year believe our in China, the in and which customers' relative due for priorities revenue changes We risk ongoing our to removing of uncertainties the current to to COVID-related the in improvement slower-than-anticipated early-stage broader a

investments Although the innovation, superior that company. relentless cross-selling from revenue challenging these CleanCap, driving taking new pressures long-term emerge operations, to expansion market gains uniquely macro longer-term stronger business a as laid helm belief strategic and previously have focus on products through out base product the has during enable and the a with unchanged. us company growth time commercial that and our and Strengthening share all not I'm short-term my portfolio wavered. a priorities of are will customer and and innovation environment, priorities, enthusiasm remain for our team experience Carl the in The

in to a innovation, excited day, Slide And an on we'll that Investor hosting move deeper our XX. share XX. we'll in company-wide York September I'm let's to New Day That dive be speaking R&D initiatives of into provide showcase person. of sustainable registration details be a our Deb team. long-term to I deliver many and and to as closer, you providing forward growth meeting we look little information more leadership get will and

quarter Kevin Kevin? performance now and on our to I'll provide our guidance. ask details second updated

Kevin Herde

and the for Trey, afternoon, Thanks everyone. handoff, good

XXXX. dive and As outlook our mentioned, financial and year-to-date Trey updated into our will I deeper results discuss QX for

Slide on XX. Starting

expectations $XX this with As in were afternoon, roughly our QX million, quarter. XXXX the for release line per our our press revenues

$X.XX share EPS EPS $X.XX read for adjusted share a diluted our As both XXXX. for was quarter while and GAAP-based per share $X.XX the half the loss, first fully per basic for and earnings per diluted share, was per of

resulting million before for loss interest non-controlling quarter XXXX. net was EBITDA, million based EBITDA the measure, a attributable for GAAP amount for XX% $X.X second the was non-GAAP QX, to adjusted margin Our quarter. of of the an Adjusted in $XX.X

XX%. organic quarter six also our cost in expenses In portion throughput of depreciation revenues the associated inorganic incremental the labor in adjusted margin that For our our the lower and the assessment with These It lower margin the quarter, revenues. overall resulting EBITDA, the second turns we levels. combined structure offset quarter reflect expenses, led The was of in versus in lower and adjusted with non-GAAP first manufacturing variable direct these projections higher of of related investments lower overhead higher inventory saw for cost amortization XXXX, to material measure, the million, EBITDA of the second XXXX. quarter. months and lower light expense was and the first a over of $XX.X the

in have to We outlook. also actively our we managing on markets. remain our focused for to best we our needs solution us future addressable labor This facilities opportunity balancing best our be to the for see to capabilities ourselves our customers' expense best structure critical and the and in for long-term while and investments ensure address revenue position right position is balance resources our the capacity, our current

Overall, cost in revenue meet exemplified with approximately correlate our continue certain margin given This our quarter within we in levels, When we'll low we cost fluctuations dynamic of recent performance the EBITDA was variable saw our that of see we the as $XX our month expect margin revenues leverage by to XX% an good see structure. in revenue. adjusted million June to performance. revenues, of

XX. Turning to Slide

have a Trey mentioned, strong we continue As to sheet. balance

capabilities, offset earlier inorganic by additional this cash capabilities $XXX million organic QX the overall as approximately and and strong generation capital acquire up to such year investments the unique Alphazyme acquisition $XX cash both year. our our used of outlays reflective last for months, cash equivalents at Our million, cash from ago, a and over XX ended

of Our quarter non-GAAP that negative to expenditures. Flanders negative and the safety for now which both we quarter adjusted is a acid flow components The free have free facility $XX cash of adjusted reflected of of full free build-out testing occupancy less for business million as EBITDA million. measure Leland in expenditures flow our that was tied completion Adjusted our capital the define the new the in the biologics flow a $XX nucleic we for net cash building. capital cash production

debt gross cash additional M&A does debt actively in interest debt gross an the of So cash we and which cash efforts of $XXX our half continues $XXX for very year. have sit XXXX to with this today and years. here over maturing effective below a million, maximum to and This of four which allow million, in opportunities. million expense team's of We had structure flexibility term us rate a evaluate net net is annualized am of management X%. I first over treasury proud not $X

some of for to in vaccine moment. COVID-XX more the the company's provide first remaining revenues Now a the was insights acid of of to from of XXXX. the total second our financial adjusted Nucleic $XX estimate is a XX. and the margin million, expectations segment first million the segment our a production acid I'll production half generated XXXX EBITDA basis, million business year-to-date of adjusted turning will more for segment $XX $XX.X This in the The acid touch quarter XX% million. for this quarter $XX margin On CleanCap this the I represented in nucleic our for quarter. the quarter. revenues nucleic Included $XXX EBITDA quarter million. for second of total into revenue customers segment large for XX% this brings the million a in of Slide in performance production XX%. results business half on were the $XX.X of on for revenues

biologics our of testing $XX revenues in quarter, total the safety million revenues. second Our business were contributing XX%

included biologics in million the QX the are Corporate safety $X EBITDA totals contributed of million EBITDA to, in $XX testing XX%. adjusted I that in levels. Our margin $XX of segment decreasing business expenses, were million just the spoke a not adjusted quarter, quarter, from

financial updated for to XX and our Slide XXXX. guidance Turning

year noted Trey noted touched in broader improvements spending many changes customer of my and call what on budgetary market our was full are transitional the our to a reflecting our stringent more that in changes be appears the do have negatively recently, best priorities impacting for and guidance. XXXX Maravai. already anticipated, than it the will our QX year As slower sluggishness that to I practices the in biotech peers discuss may

lower LSA, we customers license we product repeat This, Since many purchases CleanCap. raw of customers acid foregoing our delaying, agreement, decreasing chemistry last our that and resulted and materials, for nucleic COVID-related technology this and than our in anticipated, particularly segment. of combined resulted received call, and with have updates mostly our large supply for in products, or services, canceling, demand less products polygos expectations for overall from

our Additionally, and the this industry, customers' capacity decision-making, project with across combined of slower the for increased rationalization revenues XXXX impacted business. the has services part

is Now of overall, to this $XXX slightly the for total revenues million million. our a million expected revenues we to the in midpoint, $XXX range over between XXXX for year. reduction lowering $XXX At are

break me Let this view more in detail. reduced out

under are million all levels. million estimate on this ship has for $XX $XX QX and from recognized with agreement for The CleanCap from $XX in million our of $XXX zero of between decline XXXX. million chain million first non-cancelable half, $XX Pfizer XXXX will portion the million purchase We million our remaining million QX. a for and $XX implies the in $XX BioNTech is The revenues million. XXXX in revenues XX% roughly in to $XX This XXXX related the With XXXX, down orders. split is second for supply COVID-related $XX half reducing

for COVID to continue XXXX. out of the will CleanCap break related We remainder to revenue

part CleanCap broadly, post-pandemic, more vaccines this business and consider for our combination adopted beyond. be we including to However, of respiratory for likely as XXXX base continues as will

our to business we This is per ranges $XX million of leveling have in see safety testing This seen $XX since that million million $XX currently guidance. This acid revenues that to production for the of to our about lower XXXX. million. nucleic QX not overall business. the for We $XX of reduction the a The of remainder range has revenue business it to tied of accounts considers in in $X a biologics quarter for been is as our to this expect prior lower in guidance growth this million demand million region our is $XX year seeing business lower range expectations years. a China

of any challenges impact seen nucleic last a acid customers is challenges $XXX in which quarter of of which recover this our COVID excludes and that Our macroeconomic segment, XX% the about and XXXX now be development of ongoing the view reduction production XX% demand from but has CleanCap of softness demand, research XXXX. to from in levels. and annual would the our versus business, frankly the anticipated expectation at views decline estimated from reflective budgets. product-related midpoint, range revenue customers million that a in half an from to over This existing This XXXX $XXX XXXX, in represents second segment a to million, is for is those growth reflects their extended CAGR our an demand the on lowered of disappointing

the contracts spend, and service slowed capacity, customers at business, This later companies dynamics combination has program in rate programs a is the service year services this mostly but has overall expansion as contracts for which dates and more decline fruition anticipated. been that than to led of at the timing in expected in to of rationalizing of a fewer competing to is to XXXX, recent due XXXX earlier commitments. our which faster shifting years, the which anticipated factors, have now industry-wide segment not has come also opportunities overall from we achievable growing to to Further, CAGR

believe reflected products, Overall, support and is qualities drivers. XXXX, But overall smaller and growth opportunity, a and Trey revenue we that market combination technologies, we of very a unique updated mentioned, a in capabilities as we needs with our a long-term exciting least to have market seeing in are in guidance. at customers best-in-class

that future, manage year we for will set a in. ourselves this through we We believe the challenging future up strongly while

we range revenues. quarter implies scheduled With remaining COVID-related a our of regards $XX quarter the the to of to This gating estimate million includes revenues of $XX XXXX third fourth the $XX which in CleanCap million, revenues, will be total million partially to from COVID total the in of about $XX $XX in in range revenues, higher $X slightly should sequentially due CleanCap higher roughly million revenues, million the to or in QX. up which $XX million million QX, total

As result now diluted have range expectations the per updated XXXX, earnings adjusted metrics. and a fully lower to per the share share for $X.XX between million. million of EPS of revenue $X.XX adjusted we our in anticipate $XX We estimated and EBITDA $XX

expect on additional following financial we Additionally, XX. the as listed expectations Slide

GAAP the as-if year. million count capital rate we million share includes an of range This we to adjusted shares million EBITDA, million. and between also expenditures Interest a effective see converted item $XX net of show interest to million non-GAAP reconciling $XX million $XX and in which of XX%. million. tax between $XX be XXX $XX to fully of and expense, this from net Depreciation Further, income compensation, amortization to $XX million $XX an $XX as and Stock-based million. be

a role May be out investments and have personally turn where to critical the Gen-Probe of years. our Now the played being his a miracles part rock sincerely days I Maravai, PANTHER, to ensure and sale six-plus part with in arguably for you the years the And screening our journey. you safety molecular to collaboration that the diagnostic letting before meaningful mRNA to Trey, undoubtedly working to life honor to past global thank left complex a small me the enabled your of Carl, to a XX I lust instrument of for through it of Carl launch blood ever for development successful successful pandemic. mark back technologies of want Hologic. global diagnostics, continue building I financial science over most global together the history helping From and tools the the and over thank early by in life the for supply wingman better blood of of end on. a donated

to Trey. Trey? back Now

Trey Martin

Thanks, Kevin.

XX, leading So wrap to I Slide pleased on be to up Maravai. be more couldn't

and headwinds, While we're in and product resiliency high-value our as build mRNA areas. facing I'm other opportunities our our confident in continue longer-term to portfolio some near-term innovate we in

these company still solid and we're a at low cash Even levels, profitable flow. post-pandemic generating

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

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

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

now Becky, are happy Kevin, questions. and Carl, Drew your answer to I

So I'll operator, back open Q&A. and turn to we over will the call for the line the

Operator

[Operator from Instructions] Your is Sykes from line open. line of Goldman Matt, your the Matt question first Sachs. comes

Matt Sykes

good of afternoon. demand taking Maybe in questions. one, first weakness sort the industry. on my Thanks for just the Hey, the in

been that sort witnessing demand demand another of throughout You have a Any emerging industry. we've inventory in about customer lot of some obviously, it on I'm any terms were the levels of guys sort the biotech front? talked the in Or of issues where the is and you would side, sector? commentary inventory in curious on that's China. dynamic issues in weakness just the just that really

Carl Hull

the of sector. Well, the more I across general demand it's that think, the Matt, It's latter. weakness

XXXX reorder You CleanCap burning really -- sorry, can not we're we seeing. our they I just about But for been having customers -- largest that customers the that factor think XXXX off inventory. see that during talked by that headwinds is during the combined bigger clearly the COVID-XX have I'm us large fact

Matt Sykes

how how of volatility a seen would BST? help one fixed declines, the given Got dynamics there's rather down, on should sort we normalized high costs. of focused margins? how this we've think normalized acid for revenue margins you Understanding from thinking it. And just But for lot Kevin, then, the business, just perspective, mean, the here in also margins, mostly nucleic about about modeling with but stepped kind than of I it you. a us be

Kevin Herde

in Yeah, a I mean, pretty and bounced around margins to Yeah. Thanks, much you're Matt. right. the bit changes have tied revenues. certainly, are

quarter, first [$XX or then things margin to really XX%, down decline (ph) the $X what roughly range at look XX% and EBITDA a in you two million the XX% If in about and we margin million] did there.

north high tied our contribution are of revenues, the have XX%. to which variable You

half we then and of hasn't transparent the acid that's as And levels inventory that seen million I nucleic as levels, the within because segment just lower production of haven't $XX of revenue. end referenced. dynamics revenue or manufacturing on throughput the been impact So on roughly been one has high of the our

manufacturing of outputs there have a as up had been inventory in million $X.X we $X.X in quarter the variance We manufacturing million. first second had the there, levels favorable unfavorable went and quarter variance absorption

So there the that of saw. EBITDA in combined impact remainder drop you the about $X and was the quarter-over-quarter, million that

prospectively that levels They and those of the little revenue see increase revenues as margin the super last the little and but we better on to over say months, had would as a or for the high XX masked see leverage EBITDA costs We variations. I sort the throughout should around proxy by last that we've that continue a we'll over apparent more we down over So levels control up that's I quarters base. were seen so, a as go bit bit margin. XX% some think you'll what XX manufacturing year. see

Operator

question is McNamara next from your of open. Your Capital line Conor, RBC line comes Conor of the Markets.

Conor McNamara

guys. the the congrats off, for first Great. And Thanks questions, on Carl, taking retirement.

CleanCap the to job -- and the great global Kevin's pandemic. fantastic years, been PANTHER Just you of iterate point, done it's a working you've and reiterate with combating over between

So thank you and best of luck.

Carl Hull

Conor. Thanks,

Conor McNamara

think then So what guide is, think Longer do on questions, financial go? end right And the markets question one much Thanks nucleic talking were market. there's could demand view term, the of about XXXX anything for a for market just about the question out just to this Trey, on long-term of the that's XX% on six a growth for given now? down was has we the how right growth acid market, industry the that's all you of within push of just XXXX months that going in guys. kind more the you side, from challenges on revenue ago, going if conservative Kevin, versus where views Trey, once long-term Kevin. impacted now

Trey Martin

Yeah. thanks, Conor.

a that very definitely in the all believe right turbulent technologies. with right is we are in This think segments the I we firmly the time marketplace generally.

though return target mid to would to so a believe they that not to impact that But double-digit a growth, long seen have heard or customers navigate growth great be of we matter markets. but this trying we deal high the haven't term faith to our a to from in leads just rates off again. us long-term anything markets. the turbulence at We this those time before if are of anything It's of when taking far, and

Kevin Herde

from your Conor, the natural and segment, between revenue that's in what potentially It's of $XXX line, And see parse to to get making timing in budget prioritizations, a the programs And of million $XX that second forecasting magnitude the question, to to really and little of than this of that leads we're out. of decline you million around push-up $XX services attributable further and what on we timing more taking some some that was we're million into more other which hard is previously is prioritization of that, guide, slightly Then certainly, Yeah. periods. we're pushouts slower that but where our are business. now to about that that decision forecasting services little companies factors decline resulted seeing. certainly decline sort pushed XX% the within

Conor McNamara

guys. Appreciate for that Thanks Great. it.

Carl Hull

Thank you.

Operator

Suisse. comes line Dan, next Dan your from of open. Your line Credit Leonard of question the is

Dan Leonard

And you. well, to as Carl, congrats able to Great. Thank be retire.

Carl Hull

Thanks, it. Daniel. Appreciate

Dan Leonard

So a questions. couple of

sounds still COVID it's second merely I orders a the First that forecast updated appreciate forecast. big is the of into new appreciate -- in the forecast. CleanCap year reflecting the the the it problem? reasons XXXX? enforcing wouldn't half. obligations, a why continue like that these to be inventory And there obligations. are first is these going take-or-pay by for overhang the CleanCap COVID Or at into that are you I compared ramp off, worry hand, to your Do all on half all firm but CleanCap

Kevin Herde

I we're to support regions. products really These programs. other with And year. the are think Yeah, don't and our these is specifically other not Dan, actually This their obligations and the here this BioNTech. forcing to them finalization customers launch and these are program is related of of Pfizer this their specifically, scheduled --

$XX So what had seasonal. the I uptake is customers it going as be to this related we I expected customer to this this these the think more what a end year year, of consider at specific stocking of tied as to And needs, year. the I relates that But the our would quarter and really goes them at percent] end are you think the million or programs little very (ph). usage specific our tied is never exactly the [per to know and

Dan Leonard

then mRNA? my you fully clarification. funnel the for to able Flanders Understood. speak helpful how That's X more be to are drug integrated And for opportunity is follow-up, substance building

Trey Martin

Yes, I the think we has this period. And gained we here, Flanders are. occupancy released building X as

Becky get specific that to are little to think a but continue funnel, I the in out, more being We work on fitting commitments about it bit and that. to worked pass their I'll

Becky Buzzeo

Yeah.

lot of good I reception Flanders think activities. we've a X on our gotten

as our and be That's objective. continue some their milestones I in line midway occupancy clinical which us for June really be and material said, to we that Phase to Trey continue able our puts XXXX, make construction. servicing at the programs the now advance of meet to our We'll continue of through on As end of then those the programs GMP-ready trials. they we and building took clients

Operator

from comes is of the Baird. question next your Catherine, Catherine of open. line Schulte line Your

Catherine Schulte

customers? MX? thanks the customer interest existing guys, And mix any just interest you for give been the new first, I initial of Hey, and seen questions. guess, have you feedback on between CleanCap customers? What's can enzymatic from

Trey Martin

thank Yeah, you.

it thrilled again, to response few MX, really specifics. launched are the to a I'll early one CleanCap hand just last for quarter. having that with Drew We more

Drew Burch

been applications Yeah. Catherine, large mRNA-focused an really gamut interested pursuing smaller that large us. uptake companies. pharmaceutical Customers exciting been the have for from that and are it's quite to non-vaccine companies vaccine runs companies to

after across And So a it's purchase. of customers piece. initial back reorders lot been for we've pretty had much come the

So we're far. what about excited so pretty seen we've

Catherine Schulte

little Great. right. a talked you All bit. Kevin, your And cost about structure

production expanding capacity investments the of a you at not lot of time for frame nucleic that time acid filled expected You've be investments. made might the those in

actions So any the are down to fixed lighter need any and taking? cost that rationalizations that other costs facility line bring happen to you're given top there

Kevin Herde

I that right term. are And footprint we revenue multiyear structure, our the incredibly our that solutions long steadfast say, our and best expense comes right Yes, as we certainly. have will is obviously it to would thing, to capabilities these -- I mean, I -- see think to, that our remains facility how investments the commitment it's revenue. matching to because customers how say important. we're think are from is for facilities demand. structure And of think the resource facilities we the finalize manage. new I as we to the existing to labor, up actively move continue I Flanders based spoke something we we people development, would that ramp be how going mix as to upon we building late-stage that will the Becky our

opportunity we very taking be at how to and we at supporting our overall very commercial backfill certainly, the the business, footprint. discretionary already spend, to to with same labor and but yeah, are base continues And excited that that structure, balancing And our time, with actions right we the are see about. selective relates when mean it need still cost of we minimize the look and

doing group need also because We right innovation work. the it’s amazing

life that And amongst and with a would per you I define employee, that, even I cost facilities, back highest science at at but efficiency you head say you would you people very nearly still and labor $X.X contribution. million it the step metrics, diagnostics of when tools them look as our know, revenue in structure, and of say, lot when per our as is are

also to that's attribute favorable sensitive are we but something business it's something it's our So look to a and of balance, model.

Operator

next Deutsche from of Justin Bowers comes line the question Bank. from Your

Justin, your is line open.

Justin Bowers

everyone. afternoon, good Hey,

provide us are then an where your just turnaround for can with And year? RUO you total So now CleanCap with updated time? the number for you

Kevin Herde

Thank you. Yeah.

that I'm to down second six of to the programs try really was as And and turnaround the cut mRNA part enable that quickly active funnel question? usually to what possible RUO sorry, time four space. entire weeks, So continue we weeks, to as in -- have discovery to the in is now the

Justin Bowers

year? for what -- if CleanCap total just outlook Yeah, is the

Kevin Herde

outlook… CleanCap Total

Justin Bowers

revenue. CleanCap

Kevin Herde

piece about bit a million, this in over the and past. sitting a $XX little that On I’ve at $XX million COVID revenue a talked little there. CleanCap is basis, is year-to-date

mentioned, strong very So CleanCap non-COVID as Drew basis, XX%. year-to-date the growth XX%. a roughly grown quarter of has On in

CleanCap on support franchise growth related our that to COVID. indications So really the strong don’t

Justin Bowers

terms of can and Got a follow-up from seeing landscape and talk benefiting any here if it. competitive throughput you're in what all domestically -- difference improved you at the then competition then APAC? times And from in and bit from just you're about little a the

Trey Martin

in as say APAC you well? Did

Justin Bowers

Yes.

Trey Martin

discussed is Yeah, that. have more the parts domestic have at -- so many same I GMP say likely you space market as there as is And mRNA are there a rationalizing to programs, people RUO in competition would many couple the of is know, built times. time, Domestic players, competitive. significant as we've the facilities.

in the more previous China, is discussed. competitively, GMP think environment, market I as say -- has I from marketing But the later-phase there specifically, And So think that in is don't changed different. updates. we've I anything would weakening competition don't we've seen APAC, space. particularly

Operator

question next the your of Savant Morgan from Tejas is comes Stanley. open. line Your from Tejas, line

Tejas Savant

Maybe here. assumptions Hey, the terms dynamic like assuming of baked continuing you're China retirement in the budget to I current in things things guide, for want you guys, fourth into the good evening. just to ask that And the about Carl, the on congrats Kevin, weakness off, quarter. and kick flush

that of work, air is it frequency have point check-ins guys this customers else mean, address the in that of to, to near-term and of enhance that truly what you cuts can is up? sort here gone Anything drives have? demand visibility I pocket your you confidence with of we've outlook repeated your had Given sort the just de-risked? through magnitude supported bottom-up by now the 'XX, the

Kevin Herde

being happy half roughly think I'm range at to year the up business from half anywhere of Yeah, X% we our frankly, base down XX%. numbers, that. Sir, back back on the are the that to Yeah. incorporates look being the I of take such the the as roughly year,

X% year half, the And about so it's million second half the at higher the than a first of midpoint, about growth. I so maybe $X that's a think,

seeing around testing certainly I level has think out we're our this leveling a for business, been safety biologics -- while.

first We to half starting the that order are for old year the reorder. of didn't some seeing customers

So that's a positive sign.

seeing with that's what we starting are book than an We quarter. order into pretty were the seen we've before and second consistent in quarter the higher where coming much

positive another that's So sign.

So that second range half of right that gives us some comfort the is for this the the year.

obviously that assuming a China, for to not And we've going of (ph) a business testing It's $XX-ish and million safety substantially of million overall kind year take here XXXX. it bit. Maravai that that's be in business, I business, in down, second most we're the to overall of a been a as than relates little see seeing quarter growing the we Specific about growth as less since region was of across from probably to the that's that in us [$XX] magnitude anymore. that impact a mean, our last year. biologics the

Tejas Savant

Got it. helpful. That's follow-up. quick And one then

bump up revenue on biotech. a guide question you just basis? XX%. in on mean, about SMID exposure sort Can really the XX% a is at is The I margin, assuming about first around then, range of Kevin, customers part you a current on And for The EBITDA think to I clocked your you Cap biotech talk really. similar here. to

mentioned and bridge us the XX% variances half. Just from that swing through with know -- manufacturing XX% cetera. et Thank walk a build just associated the I in there. help to puts and you. But back that of us that, somewhat you takes the

Kevin Herde

I'll -- that question. second part of certainly the Yeah, this handle

second the second negative in incremental margin the spoke than we really, overhead flushed year, and in As of guiding see the risk the we're the out of high very margin which to first second that second the a the to see half months, I proxy half mean, I is the And quarter, good of we're higher of to, revenue think bit our the a little year that revenues higher I of in here six deal the these or variable assumes which to now, the right at full levels for XX%, to sort going bit little on the some around of a in increase half to of COVID I think, year so. as variances being XX% the of year. minimize is that

I full ranges, comfortable revenue I I'll you the so to to us that, for back emerging along match discretionary could now. we for be Trey think that think year. biotech, to hit the will on it to spend exposure margin extent So the a pass certainly the costs levels, these Circling managing take that for controlling and we're these with

Trey Martin

out more we of XX% being directly, about the right way significant that. It's from programs you biotech that Yeah, prioritization seeing said to size – It's the those of not monitor -- issue are continuing the to mid obviously revenue question pulled at are that can we cap. draw just there. to answer But of XX%, emerging classify for to how we’re -- funding answer small necessarily. the come we're we Sure. is be and your depending question lines. That on approximately said,

Operator

line comes of open. next the is your William Matt, Your from Blair. Larew question Matt of line

Madeline Mollman

services coming in I revenue. for versus the million Can guidance revenue the $XX this the was think Hi, about large a profile in the a I decline services all of at for actually wondering, just is I on Madeline talk portion, you Matt. was products think that said margin cut revenue? you difference from

Kevin Herde

we Yeah, into structure the always this bit and and services on have from some do hard is supporting a product-by-product our specific to just builds little product a side fungible. fixed basis. of to cost It's we move this get little a on do people don't of do builds things, margins bit a other really because and

product don't else. at a portfolio, revenues, say are across margins the consistent to we But overall is than positive. of variable segment One, more would guide that to which the an seen that. strong anything look specifically overall on and when I We kind continue our see things pricing -- So we've at basis, look it we two distinct.

out do on competitive our services into account those we're a On of believe point to cost we maintain, portfolio, and our that we and bid at the that there when products the price those services calculators take competition structure current versus margins still have and looking to out margin ensure today. solutions products and we run we're our we sort

Madeline Mollman

And is large Great. one pharma? conservative to this you've that of as I have Thank that now that that that of that well? we've heard emerging rationalization, like Is think from some headwinds the then something more in you. quarter peers confined are biotech to now originally expanding spend, were pipeline experienced thing terms like things

Trey Martin

one. that take I'll

-- a Why? in players a the well industry. saw than profile either speculation on And the sciences got is it players our think other I for later to different very my just of of hinge capital think that the was that of the happened could part be funding little I to the little competitors suppliers. of large saw We bit the we a with therapeutic part, resulting apparent bit the customers. but the It think lot desire what were and some life we on I customer mRNA a biotech conserve on funded. pure

emerging this there that among few it past I biotech saw was market point once names coming customers a of think funding of then our But apparent in in our became seen the accelerated. this paper we quarter of customers the of the hadn't the from in trend We broader that kind view, a before. winter

that business. million, like speaking, running on and in revenues. questions relatively smaller headwinds think do was places immune not from I part a $XXX the that. we're so And it And China our We're then $XXX broader of million there,

obvious. it more Now becomes

Operator

line Sourbeer. your Your comes from of the question John, open. is next John line

John Sourbeer

retirement and, Carl, best role. of on CEO Thanks. on congrats Trey, luck assuming the

amount quarter of of kind to around Just cancellations any and prioritization, the would dollar percentage you at delays, bucket just what willing year-to-date? kind capitalization, the or you've be you to the or demand across you about of talked when quantify way that in seen you some a down bucketed further look headwinds there,

Trey Martin

had I'm don't is would the Well, seen the to biggest head quarter They've we've to So got in specific the that you. for positively. was to in surprised quarters and shaking seen it willingness us. around you their impact call happened great And of refer any against us think an I look, business. will, anybody clearly services that their last looking biogenics cancellations a outsized prior that have change we see if or out. or that table answer we [indiscernible] forecast we I the the for think the think patterns if two impact, spend. in I probably That emerging our spending significantly

if looking you so were Becky, what slightly I what's would And one don't for different. be see there, if call that driver it would I know, you major out. the

Becky Buzzeo

game are five playing less think, it. Phase through their those phased and and what a to forward Yeah, It's just that people investment had and both risk X where our that that in folks resources. offering multiple an that maybe And part things and later are mainly there, insurance because is their their that back. instead which pausing taking taking has of to of -- their X molecules Phase Phase more funding put candidates we've X, come a as profile X, a life have and seen that plan, in they're advancing I I instead take of pipeline, X they today is GMP spread-out the that keeping Phase services their have candidates will and is pipeline, paused

Trey Martin

Okay.

actually that perfectly Jenny. it for I to takes everybody think and will to I pass Thanks, time. your back us questions,

Operator

This concludes call. conference today's

disconnect. now may You

Maravai LifeSciences (MRVI) 7 Aug 232023 Q2 Earnings call transcript