MRVI - Earnings call transcript Q2 2024 | Maravai LifeSciences Holdings, Inc.

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Operator

Thank you for standing by, and welcome to the Maravai LifeSciences Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you. I'd now like to turn the call over to Debra Hart, Head of Investor Relations.

You may begin.

Debra Hart

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

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

session Slide on and Buzzeo, update will our the and will President review following and Officer, for can of a results Kevin our join financial Chief for Drew you will provide Commercial see today As the remarks. the Becky on guidance. X, our Nucleic Trey business Production, question-and-answer agenda prepared call Burch, Acid

During management measures our generally financial uncertainties non-GAAP available posted most that this to during reconciliation impact on on of call, not section measures in accounting financial We from will and also for financial the SEC today's detail It additional risks make accordance Also, our certain GAAP. press or principles, you information may filing comparable is is actual management's call, prepared in to release condition. forward-looking we the of possible A Slide refer accepted differ more to performance statements. and also and statements. X refer will for to results results, with be website. GAAP Investor could measures forward-looking operating Maravai's to that expectations. the these Please the referring directly

Now I'll turn the call over to Trey.

William Martin

for joining Thank everyone. you, afternoon, Deb, our call today. us good appreciate you We and

highlight Flanders the a briefly an innovative recap few new turning updates on facilities, products some business to call before me we Let the Kevin. share and additional quarter, new our over introduced provide update

adjusted and quarter. for million in diluted fully X. Slide results $X million $XX in our the revenue in reported with adjusted $XX start Let's quarter we on second for EBITDA QX, total EPS Today,

detail quarter thus, was pursuing hand cash revenue QX. fund of $XX up more $XXX Our remain Nucleic QX. at will the M&A. investments net revenue of end million in partnerships million The shows $XXX the strategy our the million $XX Biologic our gross, maintain financial on external million was to X call. Slide Production we go $XX later in second into Testing Kevin great We on results Safety growth million, simultaneously segment quarter. $XX in long-term Acid million the from organic the through position a position. while about and/or a in Debt is cash had

we at completed our recently On engineering includes was to produce X of Regarding in we organic EMPQ, initial complete operational our and MX. facilities. include milestones I'm environmental achieved certification. Flanders monitoring significant mitigates hit CleanCap XXXX the or to the on X. Flanders our production. This to investments, you'll engineering continued April, key analogs rNTPs grade other as to inputs like acid capacity nucleic CleanCap are clinical chemistries needed mRNA now we've facility qualification, risk multi-site our which States. in NX-Methylpseudouridine, GMP ISO Other the well X and molecules cGMP and as have as for small also United for process scale of X see run manufacture adds our as to Flanders has and our started update U.S. facilities me share alive. excited commitments Flanders X let are runs to truly ensure the team and an all government. provide taken during Flanders This coming that photo Flanders BARDA milestones Slide X our cleanrooms X, X a the

Slide to X. Turning

processes RNA batch the customers. II teams the internal the in X bring TriLink's and facility Phase to our mRNA successful first best-in-class run, mRNA manufacturing demonstrating produced of III Phase our ability to TriLink service Our engineering Flanders through

our to This our data and an is late that an completed But facility their regulatory constructs use not manufacturing our XX on step X manufacturing commercial Flanders investments meets in easy have ensure any customers X EMPQs and TriLink new manufacturing second TriLink phase addition, review regulatory work concerns. GMP for experienced of cGMP additional with teams for consultations clinical different can I'm the batches over important CDMO for customer customer in facilities over requirements design, manufacturing is for customer enable the late of pivotal needs. Being the In the compliance with environments life-changing primary campaigns. the has their vX XXXX. eased the medicines facility also already we've the manufacturing also plant RUO initial phase services their patients for in the in suites RFP to a decision. RFPs for pipeline This have advancement whose manufactured by mRNA and phase commercial at on needed our we stringent to in and One very our for brand a beginning the have start combining innovation clinical products first marks really in stated half in committed is of worldwide. our the how winning team's with intent the their for XX,XXX of pleased Flanders of material. TriLink success of trial builds and service early has commercial of a XXX to made combination clients. over manufacturing. constructs, requirements thousands

customers their strategic a our We journey. a unique position are in any value to at of to stage be

manufacturing. or our Center commitment to through solutions Analytical to elements including the the our for discovery and commercial customers serve Group, new mRNA test of through trust a providing redundancies state-of-the-art The established linked innovative of that to with early will at from manufacturing phase Excellence, facilities, customers. development analytical can new tests manufacturing as service Flanders and assays late hub products. TriLink The Our innovation. with development drug associated ASCE our with site these will product expertise, our and mRNA with committed and to for equipment in now business and product testing. reinforcing ASCE is ASCE winning complement expands new TriLink's nucleic is every closely its to also Services ASCE, site, where preclinicals of Sciences transferred continue the the capacity has also easily in possibility TriLink along be analytics, deals. our opening our methods the be so and available in acid the occurs Analytical mRNA release are plant to key

the move priority developed bringing enzymes to commercial into our introductions, ecosystem. rNTP offerings or Slide key expansion chemistry TriLink product X to catalog market. Production Let's GMP portfolio enhanced team NPIs, The new and Acid products I'll highlight us, our our and offerings, and our on we've launched Nucleic to a the mRNA new our IVT are I'm pleased with strategic for product focus segment. custom and services, for date. progress seen repositioned TriLink catalog platform these

Let's take in those of order. each

call, and catalog quarter's new our discovery have most we're launched CleanScript expectations upgraded the products As group we existing these we so launch, completed products, recently up-to-date TriLink our catalog that for response. using the our process. CleanCap catalog touched now new with exceeded We've last mRNA with by NX-Methylpseudouridine. refresh sales MX on very IVT and the our Since market pleased

our support few custom get with they great customers materials offering customers QX, discovery, and The start quickly tackled acids being mRNA key RUO we cash our important it's them our both with process raw and here improve a they and the to to enable that custom NTPs. areas, for discoveries. In as produced customers quote custom launched them and that the the to molecules. scale have or move notable effort us for how clinic. Our repositioned we and a turnaround just triphosphates choose GMP to a with to materials need. improvements most they has GMP we our time, advance nucleic us can capabilities standard team know the as This interact continue their experience nucleotide chemistry the to us When Overall, and and that easily both their them GMP-grade into U.S. in half. cutting help come platform to can new showcases to believe existing been for do

confidence customers and we advance support of move customers in these the our can scaling expertise. Flanders in potential medicine. production productivity materials the quality us high of and Wateridge unlock development, portfolio to our across our enables to with their and production better genomic them, Expanding As with our from

unmodified easier sale with to of NTPs, a we've and production June, week the By differentiated our an offering greater it customers to launched we our our both TriLink the mRNA production CleanScript Alphazyme. last and and TriLink important a of extended for these We've enzyme to wallet. and TriLink modified our single access IVT point of gain brand, enzymes effort already enzymes workflow for enzymes us have share made technology, customers. at CleanCap into under the now across the During Alphazyme of with offering inputs breadth our mRNA product incorporated along

inputs TriLink process, As facilities. key you all mRNA the for able U.S.-based all production our IVT on to supply see can is produced XX, Slide in the

have X we We starting GMP and this input. will offer MX options, as CleanCap quarter, a

franchise CleanCap is in to franchise to we're continuing with innovate R&D patent and capping the CleanCap markets analogs major all new protected protect materials on continuing patent Our with while applications. methods for world. continuing And in the new mRNA and

and we a are mentioned, in finally, wild-type other process. we production. the NX-Methylpseudouridine, that scaling GMP modified I rNTPs NTPs offer into as used have and process have the now for the enzymes We just And up

workflow business for simplicity process We IVT, So with transcription doing the support can production itself. the the IVT full and inputs key with the innovation by to improvement across having continuous all we vitro in inputs enhance the TriLink. of

and X XXth I includes Glen These by that industry-leading SNA expanding molecular RNA commitment Glen in and This with for other customer options Research for beacons XX. and feedback modifications. to Slide to used excellence. nuclease and Research's to DNA for promptness, our Turning backbone oligos also tools continue will new our serinol responsiveness, our in Glen CRISPR, as hybridize have regarding oligos and are products well nucleic Report, genomic RNA acids diagnostics. quality as research expand applications. resistant SNA, been guide X new be strands DNA. impressed launched

Turning to XX. Slide

collaboration space strategic our our University a and new the researchers use announced vitro to innovation bolster market transcription includes TriLink's CleanScript. collaborations partnership the to CleanCap In establish in Johns through in center center. funding investment enables to continue Hopkins leadership for partnerships. We mRNA Hopkins we QX, in and and mRNA the technology, a with

lowering one further barriers and supplies, access application medicine, will RNA biotechnology TriLink to under genetic Additionally, of delivery The and provide and will discovery biology, Hopkins discovery and expertise mRNA. experts to Johns bring the together critical drug roof. other in manufacturing center technical

is We serve expect for training and next network. the of RNA generation as investigators hub the RNA a researchers Hopkins across a it will for center

are and products. technology key latest of enhance helping partnerships Our our to designed continued innovation academic to and are market adoption accelerate

collaboration structure with the creating DNA's breakthroughs production. partners investing with we Houston Institute. We product the partnering recently and XX% to top Applied and the manufacturing, manufacturing the Linea fully support In which We critical key platform Linea project, allowed for development was process quantity developed DNA addition in and academic last process that competitive. We research our sufficient enables manufacture Applied enabling Linea that including Methodist agreement, and new Research long-term for full costs to anticipated a product in believe material to the that scale-up the during academic DNA collaborations quality you for JHU enzyme the reduction RNA call is X They active starting a a market driver the with tier innovation highly polymerase completed workflow for with industry and institutions, shared a be of leading in Alphazyme cost to value. enter with a new polymerase. have in collaborating manufacturing with of resulted the demand the Applied over enzyme compliant RNA that production have

exceptionally early and positioned to for are customers win technology adoption. product We

the let's Slide our to brand. under Now Biologic and business, turn Testing Safety technology updates XX Cygnus

as the adoption Protein our launched used strain on market coli for cell this ELISA nucleic recombinant expression, specific expression market. the fungal the protein used Mix-N-Go There host market and a for well recombinant will strength. The FDA antigens, affordability stages. bring the kit is our of adoption International. to fungal E. expected development, protein The kit the we to role facilitating variant proteins. diseases. has cell help host developed play protein early bispecific bispecific residual production antibodies, Kit, kit bispecific Protein XXX to future, Dyadic XX, to for CX improved for only other efficient specific segment, bispecific first products coli are accelerate production will believe an fragment partnership XXXX, aiming or The most will on over diagnose E. with be and developed on in the in new platform, which antigen-binding in the of kit and highlighted in coli of second for to and therapeutic acid customers. be line assay In partnership Slide with to monoclonal Cygnus on innovate in spectrum continue L Protein low-cost FDA the purification first broad CX and there ultimately Technologies hematologic developed protein this We line the E. enhance or as antibodies, antibodies which L support kit for rapid enables health the Fabs. treat was antibodies our affinity care of HCP important of and antibodies, X our patients to L including As for is and used recently ocular including the diseases. the was BLXX countries. The and protein a prevent, cell Dyadic of tri-specific platform, products, approved marketing applications to kit, developing cancer developed antibodies clinical anticipates the next-generation Since is access X treat antibodies

XXXX, antibodies. monoclonal over are For resins. mAbs resins. are Full-length full-length FDA A XXX with the as purified L with comparison, since purified approved Bispecific Protein protein antibodies

there's Given pleased the ELISA Protein the to L potential L assay, antibodies we thus, L bispecific Protein quantification our for residual development, resin, Protein high in number introduce believe Kit. of Mix-N-Go and we're growth

development to anniversary announce with areas space of continuously service development, completion products. square Leland we're is of broaden detection manufacturing for and portfolio of best-in-class new the segregated new capabilities X-year DNA cell new cold our and provides line lab laboratory. our compliant full to our improve storage. DNA the commitment new dedicated This This celebrate facility, XXX occupancy and the we proud our in As foot kits, BSL-X of demonstrating of detection space host our for our

featured in for that our edge pleased cutting we're recently antibody Cygnus method. Finally, affinity extraction was BioPharm International

As in superior ensure products and to differentiated and our continuously customers' BST improve services meet catalog the most technical the quality comprehensive to our to NAP segment, highest plan we needs. in offerings support, the offerings of solutions,

TriLink, as really was and hear and certification team auditors site. our about Cygnus, every quality complementary system, adherence Alphazyme XX and and person process, zero always to successful hosted and the others Slide to is tremendous our to our the standards. ISO major each on instrument a moving quality feedback Now positive members successful audits. the quality. Glen as from and ISO is to all commitment These was deliver unquestionable how testament well Quality site, from standards involved. the many require to central recently I effort a to of in Maravai observations high objective, pleased audits

the advancements and with goes find environmental, our This include in achieving emissions. into to call look tangible the to over examples to will X positioning our social highlights impact year and look section accumulation third support citizen. gas team we to quality Slide our the journey. we to strong of emissions expanding and transparency like turn date, you'll Kevin, manner. Along we're reductions report being with business evaluate know early you stakeholders you strategy on the greenhouse advancements our to and some I our work of evolving strategic our how to report our you deliver objectives. ESG hand-in-hand future. sustainable new Maravai an commitment covers enterprise-wide to These stakeholders to XX, advancement to of from key and corporate report to are report. products, in done scaling published XXXX a Investors environmental working long-term while keeping our necessary We fiscal comprehensive ESG responsible growth. A sustainable forward to the the and This safety review ESG website. select disclosures value better for increase has holistic the to XX-page I of socially ESG our the apprised On was proud our growth a meticulously question, operations of build are report. with of important growth. the are long-term making our we provides our expansive is effort how program and Without to Before The to and Scope committed our our I'd that let in in make meaningful encourage and positive enable infrastructure return executing governance July, company's environmentally a

Moving I'll of to our performance ask balance Kevin? on second for XX. Kevin expectations our details Slide the the and to provide more quarter now year.

Kevin Herde

it delivering Certainly, not as broaden the for Maravai accomplishments offerings. operational of demonstrate for only we our but deepen continued numerous Trey. in employees. commitment it, our efforts the also to very $XX want in revenues team strength quarter, of million I over recognize entire in Appreciate and the quarter quarter the busy and capabilities a the our and was to and which R&D overall

dig QX Now was Slide the into the let's XX. quarter million. results, Revenue starting financial for $XX on

for GAAP $XX loss $XX second compares million measure, quarter of non-controlling XXXX. Adjusted net interests for QX This net of quarter to was non-GAAP QX was million to XXXX XXXX. a the EBITDA, before Our of compared $XX XXXX. the for second million a loss $X for million

EBITDA the our Our adjusted and EBITDA our first of adjusted expectations. was EBITDA margin trailed the XXXX XX%. it while of was second XX% the in QX XXXX, XX% from margin in quarter in up from Overall, QX solid, margin quarter up XXXX's

have our and of we quarters, fair As revenues, million to shown a ranged XX%, both have which past X to over from XX% which adjusted $XX seen amount EBITDA our million, the ranged variability. have have margins, $XX from

revenues adjusted million. $XXX at XX% EBITDA XX stands on For months, our margin of the trailing

of focused questions many discussing reckon margins, I will me XX. spend let some on topic time your Slide While on this be

we this look only revenues current exact, which than and our dynamics. revenues have this our was back XX.X% data to look which spend that we points As we XXXX to to profitability level, reconciling XX% broadly to be some -- achieved were XXX back, last when of XXXX adjusted $XX.X discussing I million moments QX in was EBITDA point higher near basis QX performance. few will a and

variance the and the largest mix in product overall our the this First, expectations. related was item contribution to our primary frankly, contributor internal and bridge, to

variance, business, XXXX from performance, $X to at to combined compared than expected QX. in our quarter more impact. with absorption QX declined adjusted BST BST at lower ending or to million million its basis QX That is which facility, million, decline roughly lower manufacturing about XXXX. This Our million led strong $XX about we XXX as below anticipated, a EBITDA the point $X $X

This item incremental totaled third-party quarter, was in QX XXXX. QX our our detail to preparedness tied second new million higher XXXX. start-up from costs $X.X Flanders that in $X.X the million XXXX facility. The This impacted in $X represents and costs work. These to of expenses the expense QX EBITDA to approximately their have margin versus million completed points basis XXX consultants primarily by most tied up

total, basis roughly contained of XXXX costs QX R&D XXX efforts Hopkins expenses points items These in about or were associated Johns our with in $X our collaboration. impact. incremental million Lastly, and

up levels. total impact to XXX XXXX So margin QX items, sum points around those versus of they basis

of XXXX bit. margins. other XXXX benefit walk-down benefit, all items speak of the which margin the and updated dilutive in aforementioned points our The XXX net impact QX items, our the of impact I more some total section guidance of was to completing provide point EBITDA in will XXX of from a offsetting saving cost basis Now the our actions. basis that

and Moving QX was of second with per a quarter. to for for EPS. loss share, as the X EPS second consistent same also quarter the the diluted prior EPS XXXX. Adjusted quarter, XX Slide $X.XX Basic and was the year

Slide balance year-end and other flow financial the metrics to forward Moving sheet, cash XX. on

quarter million from $XXX million $XXX up the resulting net and million mentioned, Trey position. long-term million QX cash, $XX in a XXXX, ended cash with debt, in the As in of $XX end we

were operations a the and quarter, for our non-cash annualized lighter interest by the amortization net income bit our on million provided compensation which million. quarter, with buildings. Depreciation cash $XX was million in charge of XXXX, in was line Stock-based expenditures, $X Flanders $XX outfitting the expectations our and quarter, based Capital with of million line some BARDA consistent guidance. was of the is reimbursements, was QX in expectations. with with $XX stage the net the Interest anticipated and quarter, in million our than For expense also timing $X of in final expectations.

A B our fully Class the million QX we million outstanding total XXX shares count shares in and year-to-date XXX a outstanding Class basis. million ended total total shares shares XXX EPS quarter shares The share metrics impacting Now outstanding. XXX for with diluted a and million XXX of on was million adjusted

quarter. Slide to Next of performance segment discussion the the and XX in

which brands, Production Nucleic Glen Our margin in Alphazyme million, adjusted our includes XX%. Acid and $XX both EBITDA and services GMP and segment, of million $XX second Research a products TriLink, our quarter under of the had marketed discovery of and revenues

the Biologics which a XX%, products margin second mentioned. line quarter EBITDA our of trends, sheet few impacting million quarter of balance service brand, the as cash specific revenue $XX and $XX quarter, segment, XXXX. Overall, had a of revenues million, slightly as solid solid a Testing shared comparable Our expectations, adjusted Safety than from previously in expenses in the performance. as of lower continued down from EBITDA $X an our flow in below adjusted recent of with totaled million million second QX Corporate adjusted and was EBITDA result with Cygnus second discussed items $X.X over and margins includes

revenue we assessment of outcomes our $XXX the expectations range range existing to in books, of for now revenues QX full $XXX with XX. Based with the comfortable likely XXXX being XXXX the line million Slide on total about now let the of in detail year, half how million. year me thinking are we our current of with and revenue So remain the of XXXX on

at segments. the Looking

followed a in the in a strong $XX the Safety lingering the Based but China. in BST for by see and the some half expected XXXX. After for QX Testing based taking segment Our was $XXX million at quarter be this uncertainty single midpoint XXXX, first mostly now will this than segment the guidance business outlook estimated second first we low upon and discovery weaker half, performance around timing our digits up printed Biologics NAP of of the around roughly TriLink-branded for million performance our the service XXXX. with the business, to second expense the of the GMP-related half the midpoint sensitivities BST revenue and of for the business revenues in the on

As with in per for $XXX million and at $XX revenue, that to second half quarter, our see and midpoint, about of this $XX million likely $XXX million $XXX the of first gating the half million million sets range, $XX $XX in we or revenues to midpoint range. million at QX a million

our to are higher expenses the initiatives after per XXXX the Now the believe an including we $X.XX our we deals Johns our and now margin funding from and product associated business the EBITDA to our the unit. left initially recent likely than basis EBITDA mix, in enzyme full unchanged business, point adjusted mostly range stems costs the start-up license right initial Flanders adjusted moves reduction anticipated loss that loss for in QX. than of margin in we for EPS XX% estimated and see see the of the with more Hopkins the $X.XX a This We our guidance lower profitability share. that XX% adjusted XXX expectations metrics year

implies, costs step-up control the around of performance, the first cost given results efforts this revenues QX operating EBITDA XX%, half and a NAP from in levels, As in overall BST half adjusted this consistent completion resulting the performance, start-up margin expenses. Flanders from and a second

between of guidance expectations between from a following and operations our the holds our $XX improvement shares fully lack compensation, slight Interest Depreciation interest count previous million as between item and of and interest guidance for show million; in and and converted XXXX. equity-based million, share cuts. amortization our given adjusted the XX%. to the $XX as million to million; EBITDA, Our year we to million effective tight $XX treasury and tax a $XX $XX benefit net be given the cap XXX a from also rate $XX from which be contracts, million of rate continued expense, income, rate non-GAAP GAAP of and an reconciling

capital million for around Finally, XXXX. total we $XX see net expenditures of

the thanks your now today. over turn So Trey. back time to call I'll for

William Martin

Thanks, Kevin.

So we to had range a we and against XX, half communicated the Slide guidance you on first wrap the revenue solid March. are of up to year tracking in originally

We return extend to innovations well areas. to production year-to-date at Flanders X to and as new TriLink facilities strategy our introduced capacity have Flanders and significant are leadership our increasing executing market workflow on growth as further our X the the our in across entire mRNA manufacturing these high-value

Our Cygnus team continues to technologies. innovate with new market-expanding product introductions and

for things passionate the to amazing human health. opportunity and and do incredible have Maravai teams We across

our your fundamental for are position confident the inorganic provide sheet we solutions. we and customers well strong, to innovative end remain strength and both on investments to bolster We provide remains and balance markets and our life-changing sustainable and value open building the customers We now market growth the execute positioned our vaccines. with Our of the therapies, drug organic operator opportunities our diagnostics our in and for you. back for over to to questions. like long-term, diversified remain strong a of for for up committed to turn line businesses. I to Thank novel would the the development call foundation

Operator

first Your Schulte of Instructions] line Baird. from question from comes Catherine the [Operator

Catherine Ramsey

quarter? see the here expect back on to quarter. third get the sequential Is there in or BST? see in one-timers any should digit or in Were then that you the growth a to NAP double side to great decline saw why in we revenue the lumpy orders First, that second NAP primarily And quarter?

Kevin Herde

it the in Yes, year that to -- NAP beginning see to Yes, segment, that the we scheduled we it at as segment. be gating of slight the take in say the I'm the of Catherine. relates I do would sequential would NAP that And way. happy decline that, that in had orders some

CleanCap orders, saw volume result some to enacting [Audio point and and low BST that step second that third a sequentially the Gap] We're there hopeful those down little of high quarter in from certainly that in that the Gap] in quarter of from [Audio So recover is quarter we going second contains bit can water kind the

William Martin

discussed bit. dynamic little We've a that

the GMP about products there's while to come some having within or quarter, services of the that tend unfortunately out and GMP move can month. in if GMP and will GMP sometimes cases go One movement, the in things services out interesting within products is

little slid bit you as identified, of here products the did, we in GMP that have that a were Catherine, So that QX helpful. that in

Catherine Ramsey

Got And maybe of for China? much just And you that how is how it. of your BST, outside is China? then in us business performing business Okay. can remind

William Martin

you The That's really results exposure. had we place any with XX% over explain Yes. specifically. -- a the can only China where the drop China BST of

the honestly, As China that took down half you steady during in had the the period, leg BST and COVID we've growth know, we of second then, of XXXX/XXXX XXXX. very came in then, Since course, quarters. X

teens QX distribution specifically let's I China the to for the us here So out exposure, that partners, we've BST. our a it's drop was now don't and at, in carved think specifically BST to surprise actually. happened say, in in that but

Operator

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

Unknown Analyst

on Matt. for [ ] This Evie is

later discovery The first look maintain cut from talk within through a stage seeing to projects? what spend in their you costs seen of pharma projects? spend reprioritization versus stage to some their customers you investment companies you're can one, as later R&D Have

William Martin

Sure.

Drew. I one I'll to think that hand

Andrew Burch

Sure. a statement. fair Thanks, think I that's Trey. Yes,

sector. companies seen publicly, have some reprioritization we the that been there's saw and We across

of in we've little a one it's to but starts. mRNA of it program another fair company, there's tough So amount seen Overall, portfolio a dynamics or company tie moves. terms positive to

backdrop think each move is reprioritizing positive, company we so may fundamental be the And as forward. given they but

Unknown Analyst

And helpful. this broad is question more strategy. your a of That's Okay. then on

players So shifting clinical winning move will move GMP try they focus the -- understand discovery their then from they is from to the in and to programs you poach on clinical from to discovery as it or customers like to doing pipelines. as internally? along But

William Martin

Yes.

probably in market opportunity early days it's I think the that's biggest mRNA. still because

last the a and are it production saw from billions of play, mile the excited everyone still in-house We're mRNA of or at really started programs the many think I and of people But in-house. knows the process that perform that. the them to doses vaccines. quickly all ecosystem how because go of many we concept

-- of we for we make workflow, the talk well-traveled, to have programs hear into done internally, what our is that our the trouble do the or at we've phases. you call who often, times through already point, seen, and the is hundreds One us gone so transferring CleanScript workflow program, about CleanScript your which things And we've bolt the hundreds which very many here. people go process, we of we tech the run having different do just choice, has programs of

opportunities have probably actually the biggest bring efficiency opportunity programs as we have modernize to that those of to uptake for as the programs. So see we as one conversion and we

Operator

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

Tejas Savant

A couple of to quick things kick off. you, Trey, ones for

this had morning large of a on earlier as up I back the in biopharma biotech just preclinical mean question side. numbers CRO half, dramatically biotech, on pretty as we that well on the take side the global weakness down Sort following on citing right? cap SMid

comment Are you what do to little needing can early you're assuming stage space? more are biotech of Is in contributions? you you any your on terms back this be helpful. so pricing bit that then a negotiations? seeing on environment the half And Just would here? in discounting tougher across guide And color broadly that the sort of the

William Martin

few come orders GMP pharma. products we top for Sure. -- did have, that Thank a large you. for We discussed, a in were big large as well,

lowered bit. in And to we from we little you're [Audio moderate expect expecting well, in the substantially But that quarter. the what as rest Tejas, -- low so I rather this that's a not high within if the was like a SMid, And it teens It teens. to say, extreme move are guidance, to typical you our quarter, of think Gap] out this year's to grow the that

Tejas Savant

then, Got the pricing? Trey, it. And on

William Martin

program. Pricing is a function of each individual

that throw price would year. not it rest quite can, price the that where the are simple the this way. in also company X% target a every catalog opportunities year. see to model So to we type -- take we of achieve opportunities X% -- we that would in jeopardy when number take to put we're be But needing for it's they I'll as not specifically But not as a there's

Tejas Savant

margin Got the little A it. in on to half. in pieces of bit And cadence a back Kevin, EBITDA here. couple dig moving want

a high then jumping the then out got XQ? other potentially called sort dynamics which steady off each sort volume in next sequential see off we step-down BST number year? you a of increases point and that step-up versus in You've X we of good offset And as those that CleanCap is about of the of a little can bit well. XQ think as XQ Do essentially

Kevin Herde

than part Yes, going question, the certainly, be more ultimately of revenue thanks. dependent latter to anything else. To that's your

versus see done our that our pretty going that next into tied the of to year, facilities structure stable margin we'll to cost given footprint. hits directly we've all be work will revenue So very complete the

tail in quarterly as of hopefully of migration of as Then sequential in half the As up a here, mentioned a it year. our relates I to drag really yes, costs that start first margin normalization NAP kind the the margin to from it sort NAP, say, seeing the EBITDA the of on in and I first a picking of remarks, same were relatively the off. would the some BST of was margin. improving lot the half prepared

higher that Gap] cost of items of second slightly as are Gap] what things in So saving the the [Audio are Gap] Most it model, half. that Gap] as guide [Audio some that [Audio related. [Audio well the margin

Operator

of line question the comes Craig-Hallum. next Your Matt from Hewitt from

Matthew Hewitt

the here customers? customers U.S. are first there's starting you of that during guess, quite remarks really you of kind that words. NTPs that? bad. cutting end, on repatritization pretty I some How you in to between pauses our Just a of your in from regarding I are bit important hearing guys up, a fruit? out seeing is it's this but your what don't heads obviously know prepared Are you manufactured to up, And noted if just bear

Kevin Herde

Yes.

first us over F-XXs think, flying of a couple sound was of I the think I all, here in Diego. San

can clearly enzyme manufacturing where and the has we're become being of in I smiling such supply those could interest RUO one and noted our I've it time GMP can the a would us result So think hear It interested would level San it I the manufacturing in advantage the necessarily hopefully strategic not story. question. from find of chain, thank looks people only And seeing deep in started you chemistry become now. thought business similarly, but happens advantage. the chain like significant come Jupiter, to supply a tremendous that have have facts. be we first in deep And an California, I'm have and Florida. for grew just out amount the it for asking But in to you not Diego, up, but how they origin because

think I yes, going become forward for pretty actually advantage here. us moving it's So to a appreciable

Operator

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

Justin Bowers

Can you're the adding in versus of from give us -- of you number give Flanders capacity? X, And well, when still engineering or generation revenue you time like just it, additional us out start versus building equipment actually cleanroom phase? line now initially you you that are for when runs have that one, with built then could a what a do you sense out sense where want capacity is you

William Martin

Yes.

costs, I other as end EBITDA of mentioned, had the comments the the one-time rolling. here get tail bridge, we facility cycle. in truly some really have And capital professional things think Kevin mentioned the really as we are to the start-up at fees and about

multiple perspective at same the turn to factory. do the to But suites labor there's we time, a are, let's fill rooftop open, obviously. But so overhead more has say, at this. scaling -- and we no to perspective total substantial are in from that whole as however We a CapEx on the

suites, this but job have we've we shared think now we've right parallel manufacturing our fill and X them -- been it's to I up. previously,

Justin Bowers

quick the Any committed some of change then that have you the follow-up. And programs? in commercial orders for Understood. larger

William Martin

bulk changes. orders? No the No. For

Operator

Your Capital next line question of Markets. comes McNamara Conor RBC from from the

Conor Noel McNamara

the quarter, Congrats and a for thanks nice questions.

We'll X. or Just Flanders the guidance as incorporated II start Phase Phase year? your there. program a III starts into on Have this any follow-up you

William Martin

Yes.

II/III first of One commitments our pivotal. Phase was a

So, yes.

Conor Noel McNamara

shared this potential of know Okay. then I programs? for should can from have when the programs, you benefit kind just about preclinical opportunity big you Is new a in big as there past, -- programs any or goes each think step-up. we -- of Great. guys you trial these quantify the are way clinic, that tell of the the a you see but how in And us pretty an can how advances to add something you -- new what's trial

William Martin

for for cases. delivery so -- be significantly But going from well, all use programs with, what it and we is the expressed we're you're and and would where different could. And of have tools use that on understand seeing editing therapy gene cell infectious broadening replacement for about and sizes if I mRNA to we're gene as protein vaccine of message part of CRISPR Conor, to and be the of those excited the disease forth. good actually so

the an on. customer results blend that the II in and different Well, that's happy I a that it bulk CleanCap. When and It for in bulk targets. these these happens service, uses historically, RUO CleanCap -- see GMP makes goes mRNA stage. what good the a shared So CleanCap will to difficult the we've have preclinical GMP therapeutic been what and so to different it's each progress Phase more be. now we're predict step-up again, know and to We at unfortunately just you

Conor Noel McNamara

that of Great. in And QX It half year? OpEx one the of like second Kevin, quantify to there's there costs repeat. won't okay. sneak the in -- couple let from you just the if me sounds for you can a Kevin, that's million did change

that assume on from current So basis levels? should goes down we an OpEx absolute

Kevin Herde

Yes.

an EBITDA impacting I adjusted think basis, that's on correct, Conor.

Operator

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

Michael Ryskin

you little the this, and apologize was a the margin audio provided on it. was so But the have earlier, answered if must just Yes, that in and year, I helpful. for bit bridge revision I guide you out, missed

up little other then I of coming initiatives, those that's same want model the into the bit that just out Flanders that how starting again, of mix, going product have transient in cost to Or start-up collaborations. provide in imagine So going sense, product collaboration. the in rate could that's relatively terms is BST, forward? other the something Just lot called you right? of dive bit nature initiatives. facility, You makes the start-up some transient. and more things are run a on cost relatively be if dig if factors, some little operating Flanders and up in of Johns to one-time Hopkins higher. actual color is in mix sort And thing should starting those a of a that's into. just which on -- What the or cost, that that's The costs a the I

Kevin Herde

going used incremental the Yes, documentation, inventoriable Flanders costs, to. not facility incurred to forward. items gosh, quality we've would stock systems, have therefore sure. now validation, almost are to, on Yes, say, over Happy the million the up really certainly year-to-date costs have are close bring the with that of, $X the I things manufacturing periods our that

pushed in just included expense exclude start-up So and through but we've just companies ahead our P&L. I burdens. costs, gone to choose pre-revenue we've our those those those as some know

period will the the be then prospectively. not half on revenue to to generate see an and drag isolated those first that and of be as incremental we'll year, of and starting most markets So

of prospectively. the we that we about things that were our as Hopkins you the go our forward some look be the Johns it first as for all license smaller we enzyme it about of the talked kind on collaboration and at think deals those rest different out behind we of start-up As will division, us the basically specifically, of of other the couple overall, year. relates will half they expenses in haven't some and our quarters come of predominantly But well with all drags publicly to as a with as mentioned certainly costs, in when

Michael Ryskin

Okay.

some a I then And as helpful. and of ramp small you're new revenues gradually product the as belief they're over will That's far time. Okay. projections to is now relatively mean, my highlighting, contributor

to BST essentially, We relative just want How should wrong. existing? these incremental historical they CleanCap also and contribution more about that's from them in margin, about that? should if me correct to with EBITDA line I those. products then new to the So as margins. or we know think But think ask Are about your incremental we

Kevin Herde

I game We be within some predominantly, overall, incremental we channel our on of this But more us, of based the a lot think do that. continues to revenue different. the discovery for than costs Yes, products, I of this mean, especially to margins little trying solutions and best is, for revenues our and that to The customer a have -- as in the is have. again, a that see overall those aren't drive incremental business We're burying products variable bit different relates we are put drive much margin it for really us revenues, that customers infrastructure us. place. an expansion that together for units

these strategic again, drive to by established revenue All have workforce. beneficial for financially just our numbers. and us, it's facilities and already mostly high and the again, generated total variable overall products margins, So

Operator

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

Matthew Larew

product a stick just of production filling Maybe quite the sort new mRNA Trey, new number now the you what out side. on highlighted suite. of is products

approach, service more workflow product CleanCap, and drive your is you your one the obviously you Perhaps that I feel you're like access new in with of of more products the differentiated markets products? see And to view the to some offering of of offering, to size You and growth? if where particular that might there are access any able relative particularly the be reference that wallet. other part could new you the characterize technology,

William Martin

Yes, absolutely.

manifest there IVT chemicals and obviously framework bulk themselves the service there that methods differentiated enzymes, which products, are themselves workflow mRNA differentiated technologies workflow, excuse are our commodity -- or technologies, are are CleanCap. manifest in me, the and materials business, certainly chemicals, there of Within that or like

to blend you've acquisition cover quality, the bring internally, Alphazyme, had and are the think the innovation TriLink of generation workflow. Thanks for of workflows enzymes market. space. to elements position part for just a both customers to I already we looking the But big sure We of that around chemistry very to fundamental all is access to lift make with within differentiated acid definitely this organic MyChem high identified next that the purity of IVT to stellar high we our now have nucleic the solutions

yet, so haven't on And of about differentiated overall. many you've CleanCap. customers. up the generation to think to to like released the of down focused through workflow you're and hearing but we what for we're is And bring cost as wallet can't is inputs bring within solutions those Overall, yield inputs places pretty different workflow. next a IVT is is industry a here but one-stop purity course and with going the intent the possible, continue the to the forward from on that can that perspective innovation make with aggregation of that our said, our I'm there to excited flash commenting all I what are performance of more the I mRNA share our we So ways driving shop, innovation framework. bring within within that improve and mRNA -- we that up, can finding

Matthew Larew

on half. what maybe is wins X, level how sort RFPs behind And to to kind those the just those RFPs Flanders what being size customers? starting second building just of from perspective? speak maybe a then basis. initial who just are And a of in phase quarter-to-quarter or you're some many Could customers How mentioned builds and mix for of a of you winning the the seeing customer Okay. and funnel you is on activity or potential related CleanCap then

William Martin

little I talk bookings, question. you Becky to want GMP because for lonely. timed you phasing, Thank well Becky, progression, do that? was It's think that customer getting a about all

Becky Buzzeo

additions then seen to from a year on side, manufacture services -- to side building We've across technical made GMP quite a We've our of we in funnel really both to be for mRNA strong us drug indications. strong our doubling on seller interest it's and have our And this it's funnel. our continued substance. has commercial the had QX. in And that Sure. the different team, and QX nice CleanCap to

protein we've that activity. places seen those the therapy, replacement, gene So and the are most cell

Debra Hart

one Rob, here. time I think last have question for we

Operator

you. Thank

[ from Your line from the Cruz of final comes question Kyle UBS. ]

Unknown Analyst

Could note, distributors, with a it forward? describe And up, and CleanCap your with CDMOs on you announced influencing partners about please if third-party do similar you're recently or going agreements you supplying view going agreements how with as margins the of you EBITDA have forward? supply opening think you is work for large CDMOs competitors Flanders how X adjusted some

William Martin

part first hand I'll Yes, to every then part that the and first technology molecule. to Kevin. the -- latter look, is make take We want we in sure our

we to make we mRNA, sure that we to with Fuji, try part that help why announced. X to like every front Kevin, key every idea of with would And program. that, whether it's us. realize hold not to about have do partnerships service we customer tight CDMOs Flanders we that Lonza It's product that's help key satisfy the that the side. in course, continent. differentiated the want And everything of we just And products. if have have So we a of or like our you need service. and the the we That's that business, these specced to unlikely but next the hand have with it's too we've of and obviously product love generation bring I'll whether We with leading

Kevin Herde

and their CleanCap important. portfolio strategic really best give customers large relationship here to technologies with to about and them access certainly symbiotic are the into the help relationships end to that best these these mean, a I throwing CDMOs product, Yes. help getting is incredibly

considerations, volume economic still here. of boils underlying embedded it really there's we down type volume-based far really about that -- program stay pricing. to the nature that of anything is, standalone as what pretty As program, and This not is This really the to pricing or is distributor volume. disciplined

the drive see So margins incremental economically, historical from margins. underlying not through I differ channels, much we as volumes these would

Operator

And that turn over closing remarks. Hart for our will to question-and-answer concludes now call the I session. Debra

Debra Hart

in hope conferences you weeks, to questions, Well, you can with one we you connect We'll events. financial any evening. we free for at we want to of today. to try further great and out those be us several have joining Feel with the so reach thank a coming attending just

Operator

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

now may disconnect. You

Maravai LifeSciences (MRVI) 7 Aug 242024 Q2 Earnings call transcript