RGEN - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Repligen Corporation's Year-End and Fourth Quarter of 2019 Earnings Conference Call. My name is Rocco, and I will be your coordinator. [Operator Instructions]. Please note, today's event is being recorded.

I would now like to turn the call over to your host for today's call, Sondra Newman, Global Head of Investor Relations for Repligen. ahead. go Please

Sondra Newman

XXXX, everyone. this morning, business joining call full our for for financial Great. year the we'll Thanks cover On XXXX. year and quarter call, fourth and we'll our today. provide Repligen's guidance Good fiscal for and financial highlights results

and financial and guidance. results CEO, updates will Snodgres, Jon cover Hunt, President CFO, will and Our business Tony our cover our

for during may business and reminder, a the expectations performance As goals call, our to those regarding uncertainties events that company make forward-looking the results including this we risks and are cause financial of to differ. or statements subject actual that

to and reflect a as Additional or Securities otherwise. in Today's the could company our current does events other as result of our we information make itself XX-K, and included forward-looking X-K, which the is current obligate report Form or risk comments concerning information, annual future on Exchange required report today by And which update change Commission. not filings law. with factors statements, that the on except views, Form filed new we commit

viewed against to peers. but financial to measures of enable and benchmark per EBITDA. gross revenue call, are at that adjusted and this website in financial income of investors non-GAAP not GAAP expense, press operating intended we performance growth gross measures and sec.gov. The including results as share historical be SG&A, posted current margin, on tax and earnings income as guidance. net and expenses, today's non-GAAP morning, income the are include to constant and well in as are During results release adjusted GAAP operating which this and report EBITDA we Repligen's better Reconciliations Repligen's margin, alternative R&D issued performance the and These is to included measures, providing to an should profit figures non-GAAP operating currency,

Hunt. to the Now I'll over turn Tony call

Anthony Hunt

morning, everyone, Good XXXX Sondra. update. you, to our year-end and Thank welcome

scaling growth delighted the fourth year off XX% We X growth way organic at and implementing as organic company, especially in gene mAb the we for with many we XX% therapy, today XXXX full in accelerated benefited new coming are finished the on All we quarter, greater significant up customers area XX%. processes growth the the franchises with in and overall and our than as from the customers in customers year where just technologies, now for have smaller customers. XX XXXX of

long-term success. analytics. our the R&D growth year, core remaining we vertical and C of the acquisition completed an the of Throughout important team new Technologies, strategy to on our company in establishing for with execute at M&A our continued In XXXX, our process

TFDF seen over delivered an last us at years. XXXX, positions investments and in to for innovation million with future. we in completed filtration $XXX XX our Supporting a harvest XX technology, that little team series R&D well year-end clarification, game-changing that leave cash Our has over of strategy financings and area us technology growth the the operational a and

key X growth. were drivers Looking there back at of the year,

accounting filtration accounts help XX% approximately First, developers really fairly therapy saw we our positioned as of in base split and yield we products gene XXXX to of are and even the gene XX% CDMO XX% of And with accounts. we chromatography of I XX% overall technology, of into these a core at mentioned, differentiated for growth in well Gene revenue, therapy. represented vector therapy for between sales and gene strong customers viral XX% therapy adoption revenue strong manufacturing. respectively. deliver We saw accounting efficiency improvements and with for and where products

is expansion of a increased both key seed perfusion long-term fed-batch processes N-X in saw train, for north it catalyst for application. applications products a sustained of ATF traditional XX%. driver adoption is growth of we growth us The as Second, into our the XCell ATF

of our building portfolio. decision also focus upstream out only on months team systems applications, where more We technology saw portfolio UF/DF downstream and tying and on significant more made development TFF Third, fed-batch harvest TFF TFDF we the and And for of on we not to but our systems has XX systems uptick applications. this ago traditional they've consumables and the delivered put delivered focus launch into clarification. targeted on

therapy and we comps OPUS new in to our to delivered CDMOs ensure with customers comps expand. Fourth, a strong in With significant we years market, capacity ahead To the and at we again in stay XXXX. ahead. of and our expand for over scale in gene the and of XXXX just strength our columns in for here investments the demand, biological high biologics where candidates, in X,XXX production. OPUS X,XXX drugs to XXXX prepacked in customer the saw base approved up U.S. XXXX, approximately of made were therapy, to rich continue pharma accelerated gene ability adoption finally, are resources Combined of growth as our demand XXXX. and XXX OPUS and drug overall alone, XX mAbs And X pipeline new from expectations the

in in of Technologies, also process accomplishments the some which acquisition quarter, into to was Before I our our first Starting wanted XXXX. analytics. C key jumping with highlight

our in C processes team R&D company of financial Tech. months implementing and the we ownership expansion, XXXX, commercial focused our efforts building C at and public Tech During out X acceleration on

team. with built the the successfully we next-gen dedicated accelerating R&D commercial finance we We of completed our XX efforts and on reps, team focused build-out FlowVPE,

$XX.X $XX where impact For in our We to forward revenue. to million approximately $XX to in look in the with million line of contributed seeing Technologies in million to $XX close revenue, year, commercial new C the projection. we right team Tech expect generate million our C products XXXX,

launch did systems, develop QX. which launched the was product launch a year then our to now in with key and was us made systems scale team development production year September, the technology. where technical progress. will to Moving benched-up of and We A be XXXX R&D. entering we successful followed up very for goal in and of here TFDF the significant a

We also next-gen early scheduled progress which QX, QX. launch is made controller, our ATF late in with to

addition, stages key capacity and capacity place programs standpoint, infrastructure CS was office huge of gamma product reaching next-gen have like us. a in expand again to XXXX. available and for their and a increased and products dedicated soon ligands in We the development are From final be will fivefold In our in marketplace. XXXX year

close net and of through a also SAP. to putting of in us convertible equity I debt Phase a $XXX and team centralized of financings, completed M&A. expanded Financially, operations to and XCell million position the for series future in were implementation able Marlborough raise ATF Our manufacturing strong again, we

QX to results XXXX and full now moving performance. year So our

Each As performance a our had comps. against quarter was growth today, and delivered difficult filtration quarter franchises organic plus with XX% and our reported year. respectively, together and quarter the $XX.X great XX%, growth, XX% XX% million we the and the chromatography performed in growth of proteins, sales. in story of organic for The well organic

product filtration, year. line a XCell record had In our ATF

Single-use broader in continued we and late application N-X Our up ATF processes. with ATF well saw trials, revenue a train to into of use fed-batch and reflecting applications, of seed stage perform of customers the XX%. XXXX, technology into increased scaled growth

around up business continues quarter and key wins accounts be therapy had gene over XX%. applications. strong cassette a TFF sheet flat also story The to CS year, and new in Our very

hollow good modules had for in and also XX% a demand systems. fiber Europe, Our the hollow fiber KrosFlo single-use portfolio paths, quarter robust with flow

XX%. have another will business fiber hollow filtration our overall our And strong grow that approximately expect will We in XXXX. year franchise

X for gene to in which technology our OPUS the of in prepacked over new able our times the XX% for parallel, quarter year. now for the XX% significantly adoption was improve of continued lead and XX% story in In column by the finished Moving accounts, chromatography and CDMOs therapy up production to business our The online suites revenue. our OPUS December. we for were account bringing quarter

ATF late-stage processes. accelerating put into customers and technology also columns, our We to saw focus commercial as adoption

customers for XXXX We expect our continued expand. momentum as and OPUS scale in

at grow XX% overall We above or chromatography in expect at franchise in XX% our OPUS XXXX. to

year, growth OEM with proteins QX well business the up and factors performed by ligands. growth XX% XX% full led for Our from in was strengthened

we XXXX, a $XX manufacturing X% to or in million $XX X% creating company. million ligand to in-house XXXX, to to throughout here GE mentioned, As transition headwind expect for the

continue traction the We gain this A in trials. will ligand clinical to as customers implement expect technology that NGL-Impact marketplace in early-stage

range. company expect in So growth XX% overall, the the XX% organic to with in to grow to XX% we at XX% XXXX,

in coronavirus more some the be in be XXXX. to HX other HX scale-up a projects long-term expect company stronger companies, from take performance understand on as half might in months it of overall year the fiscal the of to second is than will We the Unlike what impact XXXX. few larger China

based in there some QX X, be may quarter on customer shift For into timing. revenue

to new the a our our for applications As into operating M&A in our move we expansion organic the and following: our clarification and and with TFDF broadening product and our implementing chromatography Technologies; on strategic gene launches filtration will opportunities XXXX, further with growth. presence TFDF focus expanding market controllers, in and priorities therapy base market expanding evaluating franchises; through supplement C ATF presence harvest customer on programs; applications finally, margin technology, capacity center improvement

over the over be the out over technology year the the In launches. investments of a R&D in Also, by well further gain that believe our M&As years, XXXX supplementing positioned based in summary, product in to around put building with the for team, and we've believe the share expect us technologies a for to disruptive catalyst world-class be will X bringing commercial we made to last place X base are terms years we last We on we growth processing. years. select coming milestone we've blueprint market

Before look the concluding, and in for shareholders globe I for loyal commitment I strong for and leadership XXXX. their want the to wish Repligen's success thank forward company employees another our their and to and parts around customers in year we our to bioprocessing. also recognize

financial a With the turn report. over that, detailed Jon to call for I'll more

Jon Snodgres

full Today, financial well for Thank our measures all financial quarter as good are financial we reflect guidance morning, for providing you, XXXX, reporting our otherwise year as and mentioned, results fourth XXXX. the the measures. Tony, everyone. Unless and non-GAAP year discussed

of $XX.X morning, performance both for quarter full with the As press strong million, growth. reported representing this strong our organic financial growth another revenues delivered had quarter fourth and release We year XX% XXXX. you've XX% we seen and in

year C our we $XX full increase X and including our XX% $XXX.X overall growth of revenue was million The X% revenue foreign or headwind currency XX% of million of of acquisition growth, points $XX reported represents Technologies. XXXX, to XXXX million. June year-over-year attributed of growth, For record organic

we areas that technologies, half launched in revenue supported produce of key X% In prioritize to programs like investments continue that we disruptive TFDF of our R&D new year. XXXX, to the second company. the the Operationally, platform of in continue

investments our expanding significant We systems with our made our sites, increasing to important and also in spend capacity IT capital and overall infrastructure. upgrading manufacturing dedicated a and portion production of

into insights more provide our overall to financial Now performance.

As continue mentioned our Tony earlier, to perform franchises well. direct-to-customer

quarter products fairly consistent compared year represented regional full the the regions, across in XX% with direct approximately Europe revenue to direct for On North XX% year XX% Our the the pro and in growth product basis, Asia. XXXX. and revenue XX% a for company's forma full full of was total year, America, fourth for growth

year respectively. North America for while and XXXX, direct and of full the Asia XX% XX%, XX% Europe For represented revenue, accounted

fourth Fourth quarter Now $XX.X was profit representing moving statement. of to an adjusted million the increase our $XX.X gross million, XX% or of XXXX. quarter over income

product increased was adjusted margin growth for our in of The year factor the of to compared overall to our resin year XX.X% C mix XXXX, by driven XXXX. XX.X% proteins improvement in our column our capacity mix, compared increase, the OPUS profit in to gross franchise. by the adjusted fourth year basis was sales product operations. $XX.X XX% and margin Our was for line Adjusted demand new leverage period $XXX.X driven gross XXXX reflects XXXX. franchise of the an XX.X% XX% in point chromatography and in XXX of or partially compared XXX by same volume investments to favorable with for for Technologies favorable increase by XXXX million for million full offset the factories, point XXXX and products full gross quarter Full basis

the were million for to of fourth Adjusted the costs quarter to With million compared for respect XXXX. development of research operating quarter XXXX expenses. $X.X $X and fourth

million investments $XX.X as For drivers expenses continued full in acquisition, programs. filtration adjusted ligand year in $XX.X to the the increase year-over-year technologies, R&D as timing our were our in XXXX, were of compared C of Key XXXX. Technologies our well million the next-generation investments

XXXX. Adjusted for revenue. XXXX XXXX. of $XX.X was $XX.X The timing fourth of X% million quarter of at and year SG&A Technologies million our of the Full related process team, and enhancements compared year the of million XXXX for and the increase SG&A the finished the in well team. expenses as in was R&D million to build-out $XX.X Overall, adjusted adjusted of analytics facilities, C commercial SG&A to as quarter year-over-year was expansions compared systems IT our fourth to commercial our $XX.X acquisition in

fourth adjusted earnings million of XXXX, to compared to operating EPS. the million, XXXX. income of reported and moving In quarter was a fourth quarter in increase our $XX.X Now the adjusted $XX.X XX%

margin Our for XX.X% operating was XX.X% of to the adjusted quarter XXXX. compared fourth

expenses, quarter in of costs IT the during mostly included Our fourth of operating recruiting. million XXXX nonrecurring and $X approximately

for $XX.X year was For million XX% the of the XXXX, to million, increase a full full year compared XXXX. adjusted $XX.X of operating income our

operating year growth was business. XXXX a strong XX.X%, full margin reflecting to a point XX.X% our XXX operational execution the basis year of XXXX adjusted for compared period, Our in improvement and

XXXX for compared net to net was million, XXXX increase same Full income in $XX.X fourth XX% of $X.X quarter XX% year income XXXX. XXXX. year adjusted period Adjusted $XX.X the the $XX.X in million was an the for of of million compared an full to million, increase

Adjusted EPS per to diluted for share quarter the fully XXXX. $X.XX fourth quarter of XXXX for fourth increased from the of $X.XX

$X.XX up XXXX. of For year the adjusted increased full XX% XXXX, to EPS $X.XX, from in

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

million we of projects IT facility flow, our investments. cash primarily million, of and and XXXX, $XX.X generated of less expansion to million operating $XX.X capital For inclusive investments cash full $XX.X of flow year related capacity free systems

year moving to Now XXXX full guidance.

are tables in non-GAAP included to guidance GAAP the press Our in reconciliations earnings reconciliation release. our today's financial for XXXX

fluctuations a acquisitions discussed net Please that of mentioned, previously include that otherwise mind As be zero sales new foreign pursue. also our non-GAAP. keep impact current may full on company XXXX beyond guidance financial by not impact exchange in and does be XXXX unless of rates the in noted, will potential all may our year guidance impacted the any projection

we Today, the and a growth million, million $XXX reported XX% setting guidance, revenue an GAAP XX% at on of XXXX our full to reflecting XX% organic $XXX range to are in metric to basis. year XX% as

facilities, lighter $XX the demand of the and impacts long-term support overall Our XX% margins adjusted expected GE staffing in growth. gross with income which market of XXXX XX% XX% of reflects year. operating to capacity, for and adjusted of is is to headwinds to and in guidance expected Adjusted be in and revenue expected margin range $XX volumes the the to investments million, XX%, from range our million strength IT systems operating to for

Europe growth from approximately We tax of which are expecting XXXX revenue pretax countries adjusted XX% of expense impacts anticipates income adjusted income, strong international in tax higher Asia. in rate and

in to guidance note due the to $X.XX per income adjusted in EPS related adjusted our the diluted $X.XX adjusted dilution for Please reflects We and are $XX of that range expecting share range year XXXX share. $XX fully net XXXX increases, XXXX the our EPS million a impact primarily financing to of to activities. count year, million full $X.XX

and million Our of estimated shares to for million $XX Adjusted million outstanding million, of $XX.X now the is range full $XX.X respectively. year guidance $XX million. an to depreciation in XX.X full be diluted reflects intangible to year, approximately expense be with for the expected and X million expected an XXXX, EBITDA fully is increase approximately the amortization

in our SAP. Massachusetts facility continued XXXX with million planned invest to an again estimated OPUS million expenditures facilities proceed California in The we build-out in Breda, our for manufacturing with and capacity and capital investments expects of $XX as in to expansions $XX our company

a range our We to the fully year-end operations. with being and million of expect funded investments cash cash from to $XXX cash by XXXX equivalents, GAAP metric generation be million, in our CapEx $XXX

substantial in including XXXX, for As we've to plan executed our of year investments performance see, company prepare you growth. two the long-term another strong as continued in part making us year can of on

the completes open call lines I This to now and will for to our the report, back operator the turn financial questions.

Operator

Today's Instructions]. comes Arias from first Dan [Operator of Stifel. question

Daniel Arias

to organic year. a on guidance. is pretty just XX% Maybe start big

the you terms believe, just have though, you're outlook last not at conservative? the of you can you When And obviously, I look you year guided the about to So to, exiting of shape there. the XX% XX% relative talk drivers how then to being a feel in momentum this with the approach just you about comp you tough time XXXX business XXXX organic the to growth. conservative and that have or that when

ended than up half you less of doing? what So

Anthony Hunt

Thanks, general, good year. half off We Yes. of Dan. second through the finished had the think momentum year. in I Yes, we the

guidance, each we to what it on was businesses, I divisions. as XXXX us in each of going for important at of I gauge think looked the really think was in the right,

filtration, and chromatography good about within So feel we it. pretty

came business big a line year, a OPUS last year. product also filtration And off massive our really over XX%. up really, had year Our

So we've comps really difficult got XXXX. in

will expect filtration grow that franchise XX% We our that our will XX%. franchise OPUS We plus. grow think

is headwind X% and a to going business the that we main have probably we we X% proteins Our have know XXXX. into headwind so

And our didn't - to take really to you XX% we that XX we be if doing XX%. XX% headwind, would have So guidance. XX%

realistic. the actually, out think, there right is guidance we So putting we're now very

for this really businesses, feel good about good we While is our about the products, our really right guidance we us. think

mid-teens, part your came year question at of we your XX%. To last and about we guided second where in

last that really, had guided the and in strong. right? X%, down year business, piece we us it And came really think really surprised proteins I was the

overall the you organic really it of take out pretty that down growth if equation, significantly. So would drop the

was So factor. a I that big think

really going gene market how to all that year missed of I think the a is the in we fast factor grow. that therapy industry last think bit. was predicted And no one little other I kind the

so And year. explanation for that's last of the kind

Daniel Arias

Yes.

Okay. my second That's actually question.

give how some new our then go this Just things you scale II, went of et XXXX lines, the field. and feel I of a year that on of the of last stay doesn't about one in sounded grounded the that the on you activity to in trying that like And And that, market Phase was mean, and is things can in there always work. I don't along evolution you of just gene that lot were terms project on therapy, color always those right I Phase expansion guess, it that to cetera. happen, idea

sitting I that question year, you So looking they at into things new would have way would the guess is are to XX the X hoped how have been X months that ago? the months relative you to

Anthony Hunt

Yes.

see we think how shipments, terms earlier half know, gene as in We second seen base QX, are in terms strong will year. XX% in I my that gene any in - in in again of the for much beyond in prepared and at significant us as in the programs some remarks difficult the haven't expecting about us us of grow it's year. said finished we I we to therapy, happening when the of slowdown there know - are half XXXX. was you for of look will for scale-up first therapy therapy gene customer orders general, But we the drive that we're

Daniel Arias

in just it's these TFDF, like days. I'll more of the given that meaningful portfolio take the here, Maybe three Okay. like questions opportunity. sounds one on It so sounds the products you've the

benefit the the and dual that or year what So ramp and around and you're that be might beyond My for then about And year filtration if there. the that X take industry X that, just to look look Is this you what a is to thought thinking sense XXXX just contributor. to wanted into on coming you does is XXXX? get material like runway that it? way the the that

Anthony Hunt

take Yes, a here but number it's of you QX. for The a we've got lined off, of up in trials I think couple significant - TFDF have take spot it years to to on. going

forward, We expect But every will expect in for that $X revenue it we generate year. will revenue year, million $X going this million, double. us

of one And so grow to those XX%, it's lines that we expect XX%, at XX%. product not

over the we're the said, a wouldn't far, to We the we've But I technology be get basis, a think us. years, key product got through that so confident technology rest We've obviously, limited That this technology few expect to going this next market but and on is trials, of we're done very we've that bringing underestimate the scale technology. for going quickly. a approved the that's that the to I launches that year. is to

next-generation year CS We've really technology of ATF. launches the ligands out product in up for beyond. the year. of for this well are gamma. XXXX got set We're and us innovation in in terms through. a So bringing bringing got key feel FlowVPE second new the Really next-generation, half that we will coming We've really year us is

Operator

of And our comes Souda Leerink. question next today from SVB Puneet

Puneet Souda

the question. for thanks Tony,

business, we So of one expectation force. given can conservative first number the than after - business? it? the Tech acceleration touch efforts on, in realistically of and the sales going a number bit C little the growth on we second piece sort in C you're that the Tech already force if of why for the increase that in When I when provided your see understand seeing acceleration? behind of is at Just terms the of help that you of light half sort of And for XXXX of in the that what and XXXX in see the to look could us sales product you're

Anthony Hunt

Yes.

just let's Tech, - step back. C a take So to maybe

the they seen not as did and had in they million, going prior $XX point pretty we years. it salesperson we with team able at that the conversations of Long second the was $XX.X we to to and growth Craig really where did the million. $XX be that and in one X that the Bridgewater, and were somewhere felt deal we ownership, between that the be half at or in year was million around world when the acquisition, would just drive So clear months distributors of came that inflection the we down and

first year. So they of had a fairly slow the half

projection in XXXX So the for growth. $XX us million is XX%

a So growth really I number meaningful really that's it's Tech. C for - think

product stronger be Now can definitely than all of deployment years. a down I'm of sold especially Tech have where end really X to we predominantly by the first we line year that half really and getting expect second year going SoloVPE now how sense of the board a will And forward. terms half last C XXXX. and technology the been and potential, much over to of which XXXX, in XX% up we lot that the of in got adoption is salespeople can not the years the which grow, to when XX totally additional but that's we version later it's expect outside only running, of think we America, able the just get the thrilled we've And get the plus of - on we'll North grower the of XXXX how They're I think it fast revenue. in FlowVPE, a accelerate in fast is year, rapid bullish better out of few being next-generation or also this we technology and are on, comes

Puneet Souda

next was of couple changes? first comments But And How China, China? quarter. that ask, if quarters? on your I I I then in And your what's on for exposure supply the chain Okay. what's appreciate your expectation wondering there could

Anthony Hunt

Yes.

We that's that lot minimal On in our China. are for products have the made it's of side, coming us. a chain don't supply supply chain pretty into

it's So some, in there small the are grand scheme things. of but

continue we to obviously, that. manage So

QX China of QX. our it in On the X% as revenue shift side, really we million our just about on into quarter. exposure quarters, about general, it's in average which, just a revenue, you X go with it's And $X over finish dealing and if is potential out

Puneet Souda

you. then last if strong for a could Okay. therapy. Obviously, gene ask on I one, business And

overall You mentioned mix. XX%

that I being that the here. portfolio and hardware scale-up grab you could but So growth scale right still in here those looking have serving product up us gene continue the maybe can the Repligen expansion segment? serve at Just end to market? if Are new XXXX it's do cell the when early, of you think bit a number you or to products optimal help going therapy important phase, year market? a to an in from the understand And talk products little, launches? and that's seize happening needed about know the how

Anthony Hunt

Yes.

So to We play cell predominantly vector this. and therapy definitely in maybe clarify manufacturing. on in gene both are viral

So area for of us. the that's kind focus

gene vector us. In almost all at we portfolio, bit last year, over has terms the of Obviously, the years, a a antibodies and our our monoclonal and on investor an for been and X I element current little think positioned. very actually the well for X, conversations are level has last always therapy vaccines around become clearly, product important for us

from coming through obviously, targeted the gamma gamma customer And CS look sheet that this therapy radiated going that's technology the that gene filtration to I at do we customers. from That the and the our is XX% base. filtration products, have benefit gene us year, coming to on for right products filtration anything probably our flat are as going is therapy tell if revenue impact can of at the be our an therapy cassette portfolio. you So to gene

Operator

question next our of JP today Tycho from And Peterson comes Morgan.

Ruizhi Qin

on for Tycho. Julia is This

the seasonality XXXX. off, half the of to some year. last business obviously, in So protein of maybe, the into you Tony, first regarding year, pull the forward had know, just heavy start I

of mirror the XXXX? do we ramp expect you should a that Or given the XXXX, seasonality for to So different down? GE pattern expect

Anthony Hunt

similar a Typically, been That's Yes, stronger for than of is reduction, we done. to QX And will the change. it expect by to difference I headwind would last volume see seeing is I be $XX say, QX that that the we believe we're is seeing of obviously, years. in it's QX, are to still The will in to don't QX right? that the way And that's GE that, general, expect on that's maybe - be $XX a the up - is, year would on year. that going and time is how the break light, and million QX, through seeing quarters. million right? the QX, number to you continue

Ruizhi Qin

regarding the ramp, what up you is be the us could capacity of margin And in sales? of give cadence new as capacity sense then added in sort the a should And expected new gross ramp capacity Okay. quickly OPUS XXXX? how will

Anthony Hunt

Yes.

I in columns right? now, side, can really good - of it for and So XXXX. Our output doubled news us customers for is on our the in number you that capacity think the of we terms see

And knew versus as comps move we X,XXX needed we we through were to XXXX, So XXX. going quickly.

us so were in online. capacity X essentially That OPUS gives as into XXXX. QX, we move additional suites brought And

times We're come a over ago. a much down - a significantly. say, were, now little than less lead a than in position Our we year have little better

big resins I on customers, where particular, have think has in us. North really shift in us that the to thing the XXXX started America, chromatography saw been to margin for we send in

And so our XXXX. OPUS margins definitely improved in

that expect up a QX, XXXX. real We were QX bump that, what trend saw the ended we Probably combined that's we continue should a that in up. in

probably that's going that to I the we're level think see.

QX. will XXXX late the that expecting in And come really that we're so QX building capacity we're new out online into until not

build of we're what the out end second year. the really really Waltham doing the So half start-up suites is to in in going that additional we're year, of here Europe is

on make XXXX with capacity an needed So not XXXX, in XXXX what's really to on eye success. plans a our XXXX are we're and expansion really

Ruizhi Qin

pricing on end? sort translating given supply then therapy. significant a and mean, of industry, very a actually a between on to are Got follow-up there's it. I that increased you gap seeing this gene leverage in your demand helpful. That's And lastly,

Anthony Hunt

Yes.

whether the price it's Our our much in you tends we at look if products, products, gene it mAbs same. to very be we're therapy, how or -

whole that of seeing So lot a point. not there's at least really we're leverage pricing this at

Operator

next Paul Montgomery our at Scott. And question comes from Knight Janney

Paul Knight

Jon, I that XXXX? number didn't catch for CapEx

Jon Snodgres

million million. $XX to $XX

Paul Knight

Okay. And then Tony...

Jon Snodgres

sorry. That's totally -

Paul Knight

Sorry. ahead, Go Jon

Jon Snodgres

capacity two program. it's No, really expansion I say of year our

normal return in the then XXXX. So back we go levels CapEx XXXX. down expect through more higher And to to

Paul Knight

does How chunkier Is a help make And predictive that analytics it in XX commercial market predictability? order? up, your it OPUS then the XX does a larger Tony, easier? regarding OPUS order? your Is opening standby

Anthony Hunt

Yes.

to of So the I XX you jump say, need XX And column. in OPUS get product. tracked launch, has and a the first you year larger that the yes, very customers OPUS handful similarly

us was III significant opportunities. year XX done So some has up for and has bump opened last Phase a commercial And OPUS up. actually really what

So of out of OPUS running would that XX while revenue for are would than the in, for see these not cycles. year expect more the XX, is number order get repeatability columns definitely column an an OPUS what that large for or now year because you XX something to you a customers is

that really about So XX really replacing columns be used OPUS or think Phase the it's last would processes. is columns - commercial III our in

normal of and expectation like the column you time, the it would that just lasting. - behave last So is length to last they'll expect see

be to in. So great

some go, processes, I way times I've at least think prepacked through this to III over think changed because they for the commercial. about the think and in know few said a XX XXXX, has all Phase having can into our people they OPUS I way portfolio now columns

Paul Knight

Okay. Purolite. you And that tell? lastly, Can relationship the for getting is in busy factory England then Purolite

Anthony Hunt

of NGL And days Yes, that busy in I growth the terms A expect early NGL-Impact in of the on the the customers XXXX, is good, really of process. in be that foreseeable using have I strong. going a I feedback market future. a impact that versus resins. the see in their how happen it's going field expect XXXX really but the we say revenue activity is. has terms has good overnight, in the resin factory from doesn't the long think the insight still be - ligand of think terms in but we'll and ligand I will protein been we in of in that's It combined kind evaluations don't A it's been resin the that's Purolite and to for with ligand to market is a this really the

Operator

question next Our William comes with Blair. John from Kreger

John Kreger

of your cell and therapy, the at bioprocessing in that digits? growth? changed for has overall all given Are thoughts Tony, pipeline high you all gene viewing still expansion the single kind market on

Anthony Hunt

I or just think it's in XX%, X% whether year view an on we - is XX% year. a depends Yes, And given the I right? anywhere and it's XX%, think year, year still X% between it any it

to points kind So That's to on I assessment. think probably X added the X it's market. overall our of

John Kreger

you about maybe you into into are you full your guys thinking Are QX of that Are for or to the and year? any Great. way the clarify assuming QX? China. from Thank assuming factoring you. hit sort QX And just guidance really a maybe shift

Anthony Hunt

of But is now, place long Yes. the this going same really I hasn't to no everybody is one our in the how knows think changed It right which last. sort year. is for guidance

earnings So I half. idea think I a the we when will the is what going have to think much the to be better people first in impact of May call, get

orders full We've see more for where and up we getting were clearly in as that not at companies It's think speed it canceled. no I shift. they QX. around a seen are running us, versus

basically QX that it's happen to few that versus first will I happen on of for of half the year or next shift depending probably little second months, delay so what And a tell us. think to half from potential year. more how And bit going this we'll this of QX happens what's over

John Kreger

great. these We monoclonal production that are hear production one. then days. therapy yields one below where And gene is final way Okay, for

with agree view, clients, that when do you products a on sit to front? that have you have there improvements you you do with allow will you that role in plug Assuming play down could that

Anthony Hunt

of talk they're top are close customer, parameters processes, you is purity to yields years manufacturing - been optimizing poor gone optimization. versus to the gene are unfair almost yield It's when when any - that's have people well-understood at. It's really really the it's to and and mAbs little looking Yes, at looking around XXXXs, through yield are therapy especially a a mAbs. X that - XX process. probably say since

as So and technologies And the the really expectation on. work at be from but over next can are today. if out you the will that went gene now, therapy the XXXX see sure are then yield gene And predictable no mAb the is few need that you Repligen, therapy yields improvement we have. things improved are as surprise, XX yields happening fact years. with we, yields I'm years that out just will is that there, my in They technologies clients manufacturing

Operator

Capital Our next Group. question comes Craig-Hallum from Matthew Hewitt,

Matthew Hewitt

have of questions follow-up have margins. one on Most do but I been my gross answered,

to were I little talking about get resins you've bit the a think, the now just as to expansion maybe similar Tony, you what And how necessarily an that but completed something margins, not in be customers America, to opportunity I'm look this year, sending you. in could directly mean the you wondering, there? got there we Europe? XXXX? Will gross do North at as

Anthony Hunt

for be little I that think that's - is what build if manufacturing. for a or it'll once happen Yes. will out in-manufacturing but exactly OPUS easier to We're today, transport get have resins. or it's ship either in versus Europe will I manufacturer, challenging in-country we much more mean, it's - you doing logistically, bit simply in-region customers it

So that will definitely improve margins.

GE. that I dealing is, the course, contrary volume think lost of from with we're to coming that's that

depression. has that margin some So

from something OPUS. the any least at goodness GE more coming on like is through than offsetting it's - impact in So XXXX, probably that's

Operator

H.C. next comes our And Selvaraju Wainwright. from question of Raghuram

Edward Marks

on been just well. on sort on to reach our Marks expect guidance Most Ram. for your one long-term of as Edward then Do have based is of answered based in your questions you've for that follow-up. growth this And seen organic But still revenue you XXXX? objectives This XXXX?

Anthony Hunt

our growth, it with revenue but also on being M&A. XX% long-term to XX% in projections our that based organic supplementing mean, I are growth, Yes. definitely

So we to to believe few be where for the additional require is get over next going us need M&A years. we to to

as products our will were M&A XXXX, us XXXX, products XX% as XXXX. were to long-term that We And expectation growth $XX doing grow very reliant developing, organic But through we're saying going the launching select And remind, million also on up. and believe in that new at by of of to M&As especially blueprint not that to as to go to just to execute here $XXX were XX% we're and few on maybe we out We're getting in we focused products technology the the range. we're this XXXX. we when Great our we're ahead products million then the on pace. that years. million XXXX, continue allow higher in we end in that marketplace, the to next $XXX innovation, is

Operator

And our comes of question from Johnson today Jacob next Stephens.

Jacob Johnson

handle the seeing investments next couple over future? additional the in coming Or the what years? current of you're in growth Are and making capacity. cell kind you of lot OPUS a investments look out gene you're near Clearly, in on expect therapy, we to here at enough should as of just and filtration

Anthony Hunt

X we're in X - step back to back do last that's we expansion a year what - of really think X A I needed a lot that goes over with plan we year, No, happening place QX took to and is this real put year at out horizon. we and towards looked in the years. a capacity geared

lines think we've we grow feel to going which they're think us in the we're think like expansion on now we I based It's product pace the So to plan, obviously. But well keep the general, capacity right to and grow right going they're of is market got where demand. doing ahead at. we and going grow what will

Jacob Johnson

is factor And year? more. growth just And how in about it. think today? large your one how In should growth this business we then Got the within proteins, that business proteins

Anthony Hunt

about business proteins been Jacob, growth. it's And low growth traditionally hasn't it X/X Kind our more of matching business, much. high and the to foreseeable changed expect that in we that Yes, market of for double-digit future. with single-digit really up,

Operator

Our of Analysis. next Munda First Joe question from today comes

Joseph Munda

one gene a But lot focus was I area questions of touch here. therapy. quick, to wanted answered of Real on

significant today. customers new coming customers about XX stands where on, talked it You

First, give If us can then define big? new talk you how there? customer, versus existing? the can what you you a And a bit color significant little is can growth, some perhaps about

Anthony Hunt

Yes.

in customers, are at look our who product one buying we that multiple portfolio. a the or they when fairly Joe, customers either are have ones general, in our significant scaling, at amount significant line So products are

haven't We exactly Repligen. given out is. and that revenue for definitely significant But it's meaningful what

revenue last little Obviously, of when year, puts you us $XX over look million. at our at total revenue a XX%

are customers XX those a that get what significant $XX towards of contributing you sense million. So

We right we good gene really a the working about customers of excited folks. have think We're we're therapy. So it. base in with

also about landscape, when the at we're in the market. look penetrated We believe we that XX%

the to bit I also So a start the from is to about to Phase therapy in and as potential what II. preclinical more move future it tells you more Phase gene little companies

So We've sort right we're XX% good mix gene of from million position. products, coming therapy and CDMOs of year a and developers. the gene got in in last over customers $XX good therapy sales penetrated, got

Joseph Munda

China, it. then doing all But products I have a of China, And Okay. is the great. focus there a that in clarity area, particular be Or potentially a been questions Any that in is know type it particular could there the board? business across curious, would you're on And helpful. that's I'm business touching couple of line be impacted?

Anthony Hunt

So we don't that products. our China. sell portfolio we our one all sell in isn't There into

of our I pretty other has China clear. very significantly all revenue similar think filtration is businesses. portfolio Asia, it's than any our to of where more

very over business, board. comp and business open continuing That our said, is bring I well doing there get C that our we while think that's and the Asia, seen harder prepacked in to traction pretty a America Europe North - with have that we've analytics and little - Tech We've been been Asia customers on in business. the and the comp probably good business prepacked that in China to and

So portfolio exposure. filtration a it's mainly

Joseph Munda

a acquire And long-term there. assets? the degree know going to a then those potentially what the little the far the for about M&A, you're space? mean, can I mean, last play it as takes to role assets it, M&A the a especially goal, this assets just driver seeing Though as you been year. is talk question. obviously, has of talk particularly about focus this in talk availability space, multiples but about did you you, to nice bit you in And areas, my in analytics and can I

Anthony Hunt

Yes.

not in XXXX than there. assets is different XXXX much is - that of what not are out terms So

in that we I anyone for forming the the right who the bioprocessing targets plays knows are all Repligen. about after and are. going It's relationships believe who think targets players

one We're focus So in of no us. for started analytics. clearly there's area just

will stopped not - time over we not something we're the So obviously, that's definitely filtration looking in that build chromatography we've space. out. But

are us for areas important. X all So

be of right? technology small multiple. depends, the you're type got to just product you've a on paying If are it's then a of companies going of line, - are technology, then type depending high multiples, for In low a much me-too the terms lower. in innovation, it's that revenue, then if probably So it more multiples

So to the with have good in multiples been in general, a margins that company X good for and range scaling. XXx

XXx is range, expectation our that's that for be it's we're going So - X in revenue. that types to at, the of to companies looking

Operator

to and this like to over back ladies remarks. conference the And turn the gentlemen, final the team concludes any question-and-answer management session. for I'd

Anthony Hunt

Great.

us like Look up Just today. you. everybody to stop thank forward here. joining for to and we'll everybody catching Thank May, with in

Operator

concluded. conference you, attending We all thank has for presentation. Today's now And today's thank you sir.

You have lines, day. wonderful may and a your disconnect now

Repligen (RGEN) 20 Feb 202019 Q4 Earnings call transcript